Solar and Wind Power Procurement Situation is a Mess

In the first mega solar-wind hybrid auction conducted in the country by the Solar Energy Corporation of India (SECI), a tariff of ₹2.67 (~$0.03794)/kWh emerged as the lowest (L1) one.

SECI had initially tendered 2,500 MW of ISTS-connected wind-solar hybrid power projects (tranche-I). Later, the capacity of ISTS-connected wind-solar hybrid power project was reduced to 1,200 MW. Since the tender was undersubscribed by 150 MW, SECI auctioned only 80 percent of the bid capacity (1,050 MW), which is 840 MW.

Sanjay Sharma, SECI’s general manager (Contracts and procurement, solar), informed Mercom, “SB Energy quoted the L1 tariff to develop 450 MW of wind solar hybrid projects and Adani Green quoted ₹2.69 (~$0.03822)/kWh to develop 390 MW of wind solar hybrid projects.”

Sharma elaborated, “This auction is a success. Only two bidders participated, yet there was competition. You also have to consider that other developers stayed away from this tender thinking ₹2.70 (~$0.03836)/kWh was unviable, but we have proved them otherwise. You also have to consider that in wind, after the first few batches were allocated, the tariff was supposed to go up as the areas with maximum potential have already been auctioned. Under these circumstances, the tariffs discovered are good.”

India’s First Solar-Wind Hybrid Auction for 1.2 GW Sees Lowest Tariff of ₹2.67/kWh

Adani Green had initially bid to develop 600 MW, but in the financial round later, it reduced the bid size to 390 MW. According to a market insider, “The upper tariff ceiling of ₹2.70 (~$0.03836)/kWh in itself was very aggressive. It would have been difficult for any developer to develop 500 MW or more at such a tariff. This led to Adani Green reducing the capacity bid.”

Recently, the tender underwent a few modifications and the maximum bid capacity was increased from 500 MW to 600 MW. The minimum bid capacity remained the same at 200 MW with at least 50 MW of project capacity being proposed at each project site. Moreover, the ceiling tariff had been reduced from ₹2.93/kWh (~$0.04163/kWh) to ₹2.60/kWh (~$0.03694)/kWh) which was later raised to ₹2.70 (~$ 0.03836/kWh).

Saumy Prateek Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.