SECI’s 2 GW ISTS Tender Sees Pricing Records Broken. L1 at Rs 2.36 per unit

Spanish Developer Solarpack Corporacion Technologica announced itself with a big splash in India with the lowest bid of Rs 2.36 per unit, in the SECI 2 GW ISTS auction (Tranche IX). The auction stood out for the sheer global spread of the bidders, with the lowest  9 bidders coming from Spain, Canada, Italy, UK, and Germany, besides the Indian presence from Renew Power and Tata power.

Renew Power,  with a 1200 MW bid at Rs 2.38 continued its winning streak too, followed by Tata Power with a 600 MW bid at Rs 2.39.

The surprise was 4 more firms bidding at Rs 2.37 per unit, for 300 MW each, except for Toronto-based AMP Energy Green, which bid for 100 MW. The CDC backed Ayana Renewable Power private Limited was the other firm with a 300 MW bid at Rs 2.38 per unit. The other three firms bidding at Rs 2.37 for 300 MW each were Avikiram Surya India ( a subsidiary of Italian Energy major ENEL), IB Vogt from Singapore (Subsidiary of IB Vogt Germany) , and Eden Renewable Energy (UK based).

The auction, which was expected to deliver surprising prices ever since news came out that the total bids were for 4350 MW from 12 developers, are a strong vindication of the many steps the MNRE has taken to ensure a better operating environment for solar power.

The global participation and bidding also underlined just how important the Indian market remains at a time of uncertainty,  besides the access to deep pockets or cheap funding at the very least that is required , to make a dent in the market today.

Interestingly, with project completion only by 2022 for the winning bidders here, it remains to be seen how the impact of the increased duties on Chinese origin imports of equipment will play out here, as the prices make it quite obvious that sourcing will need to be done most efficiently by the eventual winners.

Incredibly, it looks like Tata Power, despite its bid at Rs 2.39 per unit, will actually miss out on any allotment at all, thanks to SECI’s bucket filling method, which should see Renew Power itself get only 400 MW out of the 1200 MW it bid for at Rs 2.38. With the allocated amount below 600 MW, or half of what it had bid for, Renew Power will actually have an option to opt out too, as per the tender conditions.

When we asked a source at SECI on the reasons for the low bid, all we got was a surprised reaction, making it clear that SECI itself has been pleasantly surprised by the tender results.