Bids for 750 MW Rewa solar tender may break Rs 4 per unit barrier
Solar power tariffs are expected to fall substantially below Rs 4 per unit in the bids for 750 mw Rewa solar project anticipates Bridge to India. Tariff of Rs 4 per unit is the lowest till now for any utility scale project in India.
According to the solar sector analysis firm, bids for the proposed and much delayed 750 MW solar power tender in the Rewa district of Madhya Pradesh are expected to be submitted early next week.
The project is being tendered by Rewa Ultra Mega Solar (RUMS), a joint venture between Solar Energy Corporation of India (SECI) and the Madhya Pradesh government. Developers can bid for three project units of 250 MW each in a solar park being developed by RUMS.
Price bids are expected to break the Rs 4 per unit tariff barrier because the tender offers large scale and enhanced bankability because power generated will be sold to Madhya Pradesh utilities and Delhi Metro Rail on an open access basis.
The projects is also expected to benefit from state government payment guarantee and deemed generation compensation for grid unavailability thus significantly improving their risk profile particularly in comparison to other state government tendered projects.
“There are three unique features of this tender, which has been designed by the Madhya Pradesh government with assistance from International Finance Corporation (IFC) – inter-state open access sale of about 25% of power output to Delhi Metro Rail, a state government offtake payment guarantee and deemed generation compensation for grid unavailability. All these features are being adopted for the first time in a public solar procurement tender in India and may provide a template for future,” said Jasmeet Khurana, associate director – from Bridge to India.
According to Khurana the overall risk profile for Rewa tender is amongst the best in India and similar to projects tendered by National Thermal Power Corporation (NTPC), which received the lowest-ever tariff bid in India of Rs 4.34 per unit for a 70 MW project in Rajasthan in January 2016.
Since then, module prices have declined by about 28%. Bidding interest in the tender seems strong with likely participants including SoftBank, Adani, ReNew Power, Enel, Engie, AES, FRV, Essel Infra, Azure Power and Hero Future EnergiesBSE 2.00 % amongst others said a Bridge to India statement.
Looking at all these factors, Bridge to India expects tariffs to fall substantially below the Rs 4.00 per unit mark, especially as there is a 5 paise annual escalation in tariffs for 15 years and the tender provides 18 months for execution in a phased manner.
The Rewa tender addresses two of the most critical risks for solar project developers in India – offtake and grid availability. If the tender results are as competitive as expected, it would provide a template for other states for solar power procurement.
Source: Economic Times