The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) auctioned 1,000 MW of solar photovoltaic (PV) projects in which ₹3.48 (~$0.050)/kWh emerged as the lowest (L1) tariff quoted by the developers.
In this auction, developers could submit multiple bids based on the location of the project. Mahoba Solar (UP) Private Limited (Adani) quoted the L1 tariff of ₹3.48 (~$0.050)/kWh to develop 250 MW of projects. Adani quoted a single tariff for all of the project locations.
Maheshwari Mining & Energy Private Limited (MMEPL) quoted ₹3.48 (~$0.050)/kWh to develop 20 MW. ACME Solar Holdings bid ₹3.54 (~$0.0515)/kWh to develop 150 MW of solar PV projects and ₹3.55/kWh to develop another 150 MW of solar PV projects.
Feynman (Canadian Solar) bid ₹3.54 (~$0.0515)/kWh to develop 50 MW. Sukhbir Agro Energy bid ₹3.54 (~$0.0515)/kWh to develop 50 MW of projects.
Rays Power Infra and EDEN Renewables bid ₹3.55 (~$0.0516)/kWh to develop 50 MW each. Azure Power bid ₹3.55 (~$0.0516)/kWh to develop 160 MW. Hero Solar bid ₹3.55 (~$0.0516)/kWh to develop 50 MW.
Feynman (Canadian Solar) also bid ₹3.55 (~$0.0516)/kWh to develop another 50 MW but was awarded only 20 MW.
The tariffs quoted in this auction are way higher than the tariffs quoted in the past two auctions in India. When contacted, a high-ranking executive at one of the major bidders in this auction gave the following three reasons behind the high tariffs:
- The Capacity utilization factor (CUF) in Uttar Pradesh is at least 20 percent lower than that in Rajasthan and other sunny states. For instance, if you achieve 25 percent CUF in Rajasthan, it will go down to 20 percent in Uttar Pradesh.
- As compared to 24 months extended timeline for project completion, these projects have a 13-month deadline.
- The rating of the distribution company (DISCOM), UPPCL in this case is very poor, therefore the cost of borrowing will be high for us, the developers.
The L1 tariff in this auction is ₹0.78 (~$0.011)/kWh, more than the recently quoted low tariff of ₹2.70 (~$0.039)/kWh in Solar Energy Corporation of India (SECI)’s recently concluded 750 MW solar PV auction.