Solar Energy Corporation of India, the nodal agency for implementing National Solar Mission, has cancelled all but the lowest priced projects allotted in its mega solar auction held on July 13, multiple people familiar with the development told ET.
The decision to cancel allotment of 2,400 MW solar power capacity out of 3,000 MW auctioned in July was announced at a meeting of developers with government officials and Solar Energy Corporation of India (SECI) on Wednesday, they said.
The only developer that did not get the axe was Acme Solar that won 600 MW quoting the lowest tariff of Rs 2.44 per unit. The government found all the other allotted projects to be too expensive, developers said.
“They said the difference between the lowest bidder and the second lowest was 20 paise, which was too wide,” said a developer who was present at the meeting. Ministry of new and renewable energy secretary Anand Kumar, who chaired the meeting, declined comment.
The projects that have been cancelled include 1100 MW won by SB Energy, a joint venture between Japan’s SoftBank, Taiwan’s Foxconn and Bharti Airtel, and 500 MW won by ReNew Power, both of which had quoted Rs 2.71 per unit, besides 300 MW each won by Mahindra Solar and Mahoba Solar (part of the Adani Group) that quoted Rs 2.64 per unit.
“Apparently the SECI board decided this,” a power sector official said. “The highest winning bid was Rs 2.71, which was felt to be very high. The developers concerned refused to lower their prices any further. This was felt to be not competitive,” the person told ET. This is the first time auction results have been cancelled only partially, not fully.
Recently, Uttar Pradesh had cancelled a 1000 MW auction held in mid-July without assigning any reasons. Gujarat too had cancelled a 500 MW auction in February. Industry perception in both cases was that the reason was the same – officials found the winning tariffs too high.