A small Central American country giving competition to a renewable energy giant like India in solar power tariff bids does not seem quite right. But this is indeed true in the case of El Salvador.
According to media reports, El Salvador allocated four solar PV power projects through competitive auction. These projects have a cumulative capacity of 120 megawatts and were awarded at tariff bids ranging from 4.955¢/kWh to 6.724¢/kWh. Successful project developers offered 36% to 53% discount compared to the ceiling tariff of 10.53¢/kWh set by the government.
The lowest solar power tariff for a utility-scale solar power project in India stands at 6.40¢/kWh while for rooftop solar power project it is 4.40¢/kWh, with subsidies.
The successful bidders – Tracia Network Corporation, Capella Solar, Sonsonate Energy and Asocio Ecosolar – shall signed power purchase agreements of duration 20 years and will be required to commission the projects in 2019.
Interestingly, there was not much competition in the wind energy sector as a single 50 megawatts project was allocated at the ceiling tariff of 9.878¢/kWh.
Demand from wind energy projects seems to be waning in El Salvador as even during the last competitive auction no wind energy project was awarded while 100 megawatts of solar power capacity was awarded to project developers.