Sprng Energy, Ayana Renewable Power, and SB Energy were winners in the recently conducted auction by the National Thermal Corporation of India (NTPC) for 750 MW of solar projects in Ananthapuramu solar park.
The Ananthapuramu Ultra Mega Solar Park is spread over a total area of 7,924.76 acres in Nambulapulakunta mandal located in the Ananthapur district of Andhra Pradesh. NTPC had tendered the 750 MW capacity in March 2018. The entire capacity was split into three blocks of 250 MW each.
SB Energy, which had placed the bid for 750 MW, managed to win only 250 MW at a bid of ₹2.73 (~$0.0404).
When contacted, Mercom’s source at NTPC confirmed that Sprng Energy and Ayana have won the capacities for one block (250 MW each) at tariffs of ₹2.72 and ₹2.73. “SB Energy had bid for 3 blocks of 250 MW but will be awarded one block of 250 MW at ₹2.73,” the source said.
Another NTPC official added, “Initially, during the pre-bid meeting, developers were unsure about the tariffs due to prevailing uncertainties and even we thought that the auction may be called off, but the tariff discovered are good”.
An official at Andhra Pradesh Southern Power Distribution Company (APSPDCL) told Mercom, “The tariffs of ₹2.72 and 2.73 are comfortable for us. We are willing to sign these PPAs without any delay or hassle”.
Fortum Solar, Shapoorji Pallonji, ReNew, Hero, Mahindra, Azure, and Tata Power are some of the other large players which had participated in the auction but could not win the bids.
As observed in a recent Mercom analysis, established players with financial backing are continuing to dominate larger auctions. Sprng Energy is backed by the investment group Actis; Ayana Renewable is backed by the UK government’s development finance institution CDC Group; and SB Energy is a joint venture between Softbank, Bharti Enterprises and Foxconn.
“The upward trajectory of the winning bids is evident with the auction results reflecting higher module prices, even with NTPC as the off-taker. Winning bids are up 12 percent since May of last year and this auction gives a taste of things to come if a safeguard duty is imposed in the future,” said Raj Prabhu, CEO of Mercom Capital Group.
In March, The lowest (L1) tariff of ₹2.91 (~$0.044)/kWh was quoted in the auction to develop 550 MW of grid-connected solar projects, conducted by Karnataka Renewable Energy Development Limited (KREDL).
The Gujarat Urja Vikas Nigam Limited (GUVNL) has scrapped the recently conducted auction for the development of 500 MW of grid-connected solar projects in the state. When contacted again, a GUVNL official told Mercom, “We cannot be signing PPAs at these rates, these tariffs are too high. Plus, even the developer interest had dimmed and when the board sat down and discussed we thought it is better to scrap this auction and wait for some clarity on the impending safeguard duty order.”
“The upward trajectory of tariffs is just a reflection of the current market conditions. This is how the markets are supposed to work. Hopefully this will send a clear signal to policy makers that uncertainty is expensive,” added Prabhu.