The offer of 550 MW of projects by the UP New and Renewable Energy Development Agency (UPNEDA) on Monday attracted bids between Rs 3.04 and Rs 3.08 per unit. NTPC, the lowest bidder, quoted Rs 3.04 per unit to win 85 MW.
A generous commissioning deadline for solar projects provided by the Uttar Pradesh government in its latest auction has resulted in surprisingly low winning tariffs.
Solar tariffs have been rising ever since the finance ministry imposed safeguard duty of 25% on imported solar panels and modules for a year from end-July in an effort to support local manufacturing.
The bids were lower than the winning tariff of Rs 3.17 a unit at the auction in October, which itself was fairly low, considering that UP’s power distribution companies are in poor financial health.
The other reason for low biding could be the falling solar module prices globally plus Indian developers preference for small project sizes in which case they do a very aggressive biding.
The UP agency has set a project commissioning deadline of 21 months from the date of signing of the power purchase agreement. Most such deadlines vary between 13 and 21 months.
Reference- ET, Mercom India