Uttar Pradesh New and Renewable Energy Development Agency (Upneda) is considering to cancel the reverse auction for grid-connected solar projects conducted on July 10 which saw participation from 13 companies and was oversubscribed by 870 MW.
However, the lowest tariff discovered at ₹3.48 per unit was much higher than in some of the recent auctions, including the latest tenders by Solar Energy Corporation of India (SECI) where the L1 bid quoted was ₹2.44 per unit.
Adani Group-promoted Mahoba Solar emerged as the lowest bidder followed by Acme Solar, Azure Power and several other companies.
Discovery of the higher tariff has prompted the government to go for rebidding.
The National Solar Energy Federation of India (NSEFI), representing solar energy developers, has requested the Energy Minster of Uttar Pradesh (UP) to intervene and stop the possible cancelling of 1000-MW solar PV auction. According to NSEFI, there should not be any comparison as tariff varies from State to State based on various bid factors.
In case of Uttar Pradesh , sub-optimal rating of the UP state distribution companies (Discoms) — the power offtakers —, shorter project completion deadline, lower capacity utilisation factor (CUF) in comparison to high insolation States like Rajasthan, Gujarat, Andhra Pradesh and Karnataka, higher land costs are some of the biggest concerns.
The fact that the projects were auctioned outside of the solar park increases the risks for developers therefore translating into higher tariffs quoted.
NSEFI requested the State government to intervene and issue directives to UP Power Corporation Ltd (UPPCL) to honour the tariff discovered and not to cancel the bid as it would “set a bad precedent for other States”.
Reference- The Hindu, Economic Times,