Indian project developers have pushed solar power bids to record-lows in the latest solar power auction under the National Solar Mission.
An auction held by NTPC Limited for the implementation of 130 MW capacity in the western state of Rajasthan saw project developers bidding at Rs 4.35-4.36/kWh (US¢6.5/kWh). This the lowest-ever tariff bid by Indian companies and almost matches the lowest-ever tariff bid quoted in India.
Three companies, all controlled by Indian industrial conglomerates, secured the projects. Shapoorji Pallonji secured rights to develop 50 MW capacity at tariff of Rs 4.35/kWh. Mahindra Susten, part of the Mahindra & Mahindra Group, won a 60 MW project at Rs 4.35/kWh. A company part of the Adani Group secured 20 MW project at Rs 4.36/kWh.
The lowest-ever solar tariff bid seen in India till date stands at Rs 4.34/kWh (US¢6.5/kWh). The bid was placed by Indian arm of Finland-based Fortum Group. The company secured the 70 MW project as part of a 420 MW solar power park being developed by NTPC Limited in the western state of Rajasthan.
It is no coincidence that the lowest tariff by an Indian company has been received for a project located in Rajasthan. The state has ample solar radiation resource and cheap land which can be leased from the government for several years.
Another reason for the low bids is that the power shall be procured by NTPC Limited, a government-owned entity. Being an NTPC project has its benefits as financial institutions and banks tend to favour the developer in the lending process.