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Solar tariffs may reach a new record-low once again: Experts

Solar tariffs may reach a new record-low once again: Experts

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BENGALURU: In a greatly encouraging response, over 5000 MW of bids were received for the 1070 MW solar tender issued by the Solar Energy Corporation of India, which analysts said may lead to record low tariffs. SECI is the nodal agency through which the ministry of new and renewable energy conducts wind and solar auctions.

In the bid submission that took place Wednesday, almost all the major developers in the country expressed interest in taking part, sources said. “We expect aggressive bidding and possibly a new tariff low in this auction,” said Vinay Rustagi, managing director of renewable energy consultancy firm, Bridge To India. Queries sent to the Managing Director of SECI remained unanswered as of press time.

Experts said that during the early solar auction years (between 2015 and 2017), tenders were heavily oversubscribed in a similar manner. “The past two years were a bit of an exception as many developers exited the market in the face of various execution and financing challenges,” Rustagi said. The oversubscription could be attributed to the demand-supply mismatch that has arisen in the market right now. “As the pace of transition towards renewables is accelerating globally, huge pools of capital have been earmarked for the sector by sovereign wealth funds, international utilities and oil & gas companies etc,” he said. But the pace of new auctions has slowed down at the same time.

Developers prefer to participate in plain vanilla solar auctions over hybrid and storage based ones because of technical and execution simplicity, according to Rustagi. The renewable energy ministry has been moving away from conducting auctions for plain solar and wind projects of late. This tender may have received an overwhelmingly enthusiastic response because Rajasthan distribution companies have agreed to purchase the power. “The usual offtake uncertainty is not there,” Rustagi said.

Source: economictimes.indiatimes
Anand Gupta Editor - EQ Int'l Media Network