SECI auction of 400 MW solar capacity brings first year power tariff down to Rs2.90/kWh
10 May 2020
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The latest auction of renewable power capacity by Solar Energy Corporation of India Ltd (SECI) for a 400 MW projects was concluded at an astounding first year tariff of Rs2.90/kWh, the lowest tariff rate for solar power so far.
The e-reverse auction (e-RA) for 400 MW RE (renewable energy) projects with round-the-clock (RTC) supply has been awarded to ReNew Solar Power Pvt Ltd, after a closely fought auction which saw the lowest tariff drop by 69 paise over the course of almost 3 hours.
“Golden chapter added in Indian renewable energy story, as e-RA for 400 MW RE projects with round-the-clock (RTC) supply conducted by SECI Ltd results in historic first year tariff of Rs2.90/kWh. MNRE makes a new beginning towards firm, schedulable and affordable RTC supply through 100 per cent RE power,” union minister of state for power and new and renewable energy and minister of state for skill development and entrepreneurship, R. K. Singh said in a tweet last evening,
The tender for 400 MW capacity received strong participation, with four bidders submitting their bids for a total capacity of 950 MW. Three out of the four bidders, namely ReNew Solar Power Pvt Ltd, Greenko Energies Pvt Ltd and HES Infra Pvt Ltd. were finally shortlisted for the e-reverse auction. Ayana Renewable Power Pvt. Ltd. was the fourth bidder.
Power from this project is targeted to be sold to the NDMC and Daman and Diu and Dadra and Nagar Haveli, with each entity offtaking a capacity of 200 MW. There is no ceiling tariff for the projects, and the developers are free to set up the project on a pan-India basis. The projects will be set up under the build-own-operate model.
What makes the tariff a historic one is the fact that this tender provides for a round-the-clock energy supply from 100 per cent RE based energy generation sources, such as wind and solar PV, combined with storage.
The developer will be provided a maximum time period of 24 months from the effective date of PPA. The first year tariff can be escalated at an annual rate of 3 per cent on an annual basis, up to the 15th year of the 25-year term of the PPA. As a result, the effective tariff for the project amounts to Rs3.59/kWh. Compared to the tariffs witnessed in conventional sources of generation, this tariff offers a much better proposition for the Disocms to meet their energy demand through 100 per cent RE supply.
As per the bid conditions, the developer is mandated to fulfil an annual minimum CUF (Capacity Utilisation Factor) requirement of 80 per cent, and a monthly CUF requirement of 70 per cent. Failure to achieve these requirements in terms of the PPA, would result in removal of tariff escalation in the subsequent year(s), until the above requirements are achieved in a particular year. In terms of the above requirements, the tender therefore achieves a major milestone towards the MNRE's and SECI's efforts in realising a firm, assured schedulable RE power supply model, which may inevitably, replace a conventional project, at a more viable tariff.
