A winning bid of ₹4.18/kWh without viability gap funding (VGF) was quoted in a 5 MW grid-connected solar PV project auction conducted by Solar Energy Corporation of India (SECI), under NSM Defence VGF Program. Giriraj Renewables Private Limited emerged as the successful bidder to develop the 5 MW grid-connected solar PV project at the Ordnance Factory in Kanpur, Uttar Pradesh.
SECI had tendered the project in July 2017, under the Defense VGF program. The tariffs quoted in the auction ranged between a high of ₹4.50 (~$0.069)/kWh with a VGF of ₹6 million (~$91,457)/MW and a low of ₹4.18 (~$0.064)/kWh without VGF.
Amplus Energy Solutions Private Limited, was the only bidder to quote a tariff with VGF (₹4.50 (~$0.069)/kWh, VGF of ₹6 million (~$91,457)/MW) to develop the project. Laxjeet Renewable Energy Private Limited and Sunbeam Real Ventures Private Limited were other bidders who quoted a tariff of ₹4.50 (~$0.069)/kWh (without VGF) to develop the project.
R.S. Food Processes (India) Pvt. Ltd., and ReNew Solar quoted a tariff of ₹4.19 (~$0.064)/kWh /kWh each (without VGF) to develop the 5 MW grid-connected solar PV project.
A SECI official confirmed that Giriraj Renewables will be awarded the contract. The power purchase agreement (PPA) will be signed between Ordnance Factory Kanpur and the solar project developer (Giriraj Renewables) for a period of 25 years, added the SECI official.
According to Mercom’s India Solar Project Tracker, the lowest tariff quoted in this auction is ₹1.13 (~$0.017)/kWh lower than the ₹5.31 (~$0.08)/kWh (without VGF) quoted by Azure Power in March 2016 to develop a 5 MW grid-connected solar project in Ordnance factory, Ambajhari in Maharashtra.
Recent amendments to the Defense VGF program by the Ministry of New and Renewable Energy (MNRE) are responsible for such low tariffs in this auction as the fixed tariff for these projects has been reduced to ₹4.50 (~$0.06735)/kWh from the previous ₹5.50 (~$0.8232)/kWh.
This project will be executed in developer mode on build own operate basis. Per MNRE amendments the solar project developer can source solar modules from anywhere. According to Mercom India Research channel checks, the current trend of module prices is in the range of $0.34-$0.38 (~₹22-25)/W.
The project will need to be commissioned within 6 months from the date of signing of PPA. Part commissioning of the Project will be accepted by SECI subject to the condition that minimum capacity of part commissioning is 2.5 MW.
Image credit: Mercom India
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.