Solar Tariffs Drop to Record Low of Rs 2/kWh in SECI’s 1070 MW Tender

The latest auction by SECI has seen solar power tariffs drop to a new record low of Rs 2 per kWh in the Indian solar segment.

The latest auction by the Solar Energy Corporation of India (SECI) has seen solar tariffs drop to a new record low in the Indian solar segment. SECI’s auction for its 1070 MW solar tender for projects being set up in Rajasthan (Tranche-III) has received two bids (L1) at the new lowest of Rs 2 per kWh. 

The record low L1 bid was submitted by Saudi Arabian firm Al Jomaih Energy and Water Co and Sembcorp Energy India subsidiary Green Infra Wind Energy. Both submitted the L1 bid for 200 MW and 400 MW capacity respectively. According to industry reports, the L1 bid was closely followed by NTPC ltd which submitted the bid of Rs 2.01/kWh for 600 MW capacity. However, the firm will be awarded only 470 MW capacity in the tender i.e. the remainder of the 1070 MW capacity after the capacity for the L1 bids is allocated.

In total, SECI received 14 bids for a total of 4,350 MW project capacity, which meant that the tender was oversubscribed by 3,280 MW. Interestingly, eight of the fourteen bids submitted for the tender were lower than the previous record low solar tariff of Rs 2.36/kWh in the Indian solar segment, which was discovered in June in SECI’s auction for its 2 GW ISTS connected solar projects tender.

Behind NTPC, Sprng Ujjvala Energy submitted a bid of Rs 2.02/kWh for 300 MW capacity and SJVN Ltd submitted a bid of Rs 2.07/kWh for 250 MW project capacity. However, only three bidders were awarded project capacity under the tender.

In July, SECI had issued the tender for the 1070 MW solar projects.

One key advantage of the tender is that SECI has already identified the off-taker for these projects. As per the RfS, the power procured by SECI from the above Project has been provisioned to be sold to the State Buying Entity, i.e. Rajasthan Urja Vikas Nigam Limited (RUVNL), which shall be the Buying Entity under this RfS.

The three solar power developers will now be responsible for setting up the solar PV project including a dedicated transmission network to the Interconnection/ Delivery Point, at its own cost.

In anticipation of its project win, NTPC in August had issued tender seeking EPC contractors for taking up the work of project development along with land for the development of up to 1070 MW of solar PV power projects in Rajasthan.