In an aim to replicate the success of the recently concluded Bhadla Phase-III and Phase-IV Solar Park auctions, the government of Uttar Pradesh is also considering setting up 750 MW of solar at Bhadla. Solar tariffs reached an all-time low of Rs.2.44 (~$0.037)/kWh in the recently concluded Bhadla Phase-III Solar Park auction and the government of Uttar Pradesh is planning to set up the projects in Rajasthan in order to procure power at similar competitive and low rates.
At a meeting in New Delhi, officials from the Ministry of New and Renewable Energy (MNRE), Solar Energy Corporation of India (SECI), and representatives from the Uttar Pradesh and Rajasthan governments laid out a roadmap to carry out the reverse auction and award the projects by August 31, 2017 – with a target to start generation from October 2018.
An official at the Rajasthan Renewable Energy Corporation (RRECL) told Mercom that a request for selection (RfS) will be issued at the end of May 2017 for 750 MW projects. Since the Central Transmission Utility (CTU) will undertake the transmission of power, no transmission charges or fees will be levied. Mercom had previously reported that the Ministry of Power had issued a notification stating that “no inter-state transmission charges and losses will be levied for solar projects commissioned by June 30, 2017”. On this, the official commented that the order is still applicable and that a request has been sent to the MNRE for further extension/concession.
The official also added that the features and benefits which were applicable for the Bhadla Solar Park tender will also be applicable for these projects, so it is expected that tariffs will be in a similar range barring the recent GST announcement, which could push tariffs higher if the GST for solar is finalized at 18 percent. It has also been noted that in the last two auctions, through the Viability Gap Funding (VGF) program, bidders have quoted zero VGF, which signals a preference for competitive bidding. According to Mercom’s source at RRECL, the implementing agencies should be looking to scrap the VGF program and it can be withdrawn from the policies and guidelines.
Raj Prabhu is a recognized thought leader in clean energy markets where his work has influenced policies worldwide. He has a deep understanding of regulatory policy and clean energy markets and his market and opinion pieces are regularly published on both MercomIndia.com and other leading publications globally. Raj is also a regular speaker and presenter on clean energy policy and finance topics at conferences worldwide. Raj attended the KLE College of Science in Bangalore, India for physics and chemistry, and holds a Bachelor of Science Degree in Hotel and Institutional Management from Johnson and Wales University, Rhode Island. More articles from Raj Prabhu.