SECI’s FDRE Tender Breaks New Ground With sub 5 Tariff at Rs 4.98/unit

FY24 Results: SECI Adds 8,440 MW RE Tenders, Total Capacity Hits 65,317 MW

In a historic moment, the country has witnessed awarding of Firm and Dispatchable Renewable Energy (FRDE) contracts at tariffs as low as Rs 4.98 per unit. This came in response to a tender issued by the Solar Energy Corporation of India (SECI) for a 630 MW of FDRE power. The move is likely to boost the adoption of renewable power and make it at par with other conventional sources of power which ensures firm power in the grid. The notable part of this tender is that this is the only model which achieves a near -perfect dispatchability through 100% RE.

SECI awarded these projects to Vena Energy Aura (100 MW), Hero Solar Energy (100 MW) and JSW Neo Energy (230 MW) at their quoted tariff of Rs 4.98. On the other hand, Serentica Renewables also bagged 250 MW of the project with its quoted tariff of Rs 4.99.

The e-reverse auction for the tender started at Rs 5.16/unit.

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The new low tariffs and the awarding of FDRE contracts by SECI has already created ripples among the solar fraternity. Till now, FDRE tenders have seen limited offtake especially through the competitive bidding procedure. The allotment of the quotas from SECI under this technology heralded a new regime for the sector with more such tenders and lower rates anticipated in the days to come.

These projects were mandated to be developed for Inter-State Transmission Systems (ISTS). The power produced from these projects are set to be utilised by the discoms in New Delhi and in the GIFT City of Gujarat. 

To make the projects a success, the developers now need to also complement their solar assets with energy storage devices to ensure round the clock availability of clean power for the grids. 

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While the bidders have clearly bet on the low battery storage prices continuing, or even dropping further, there does seem to be every chance that their assumptions will play out with no significant disruption on the immediate horizon.