4 Winners in NTPC’s 1.2 GW Solar Tender, Winning Bid at Rs 2.43/kWh

NTPC Ltd has concluded the e-reverse auction for its 1.2 GW solar tender awarding capacity to 4 winners in O2 Power, Tata Power, Azure Power, and AMP Energy

NTPC Ltd has concluded the e-reverse auction for its tender for the selection of solar power developers for setting up 1.2 GW ISTS-Connected solar PV power projects anywhere in India. Four winners in O2 Power, Tata Power, Azure Power, and AMP Energy emerged as winners in the tender, with a total of 1170 MW capacity awarded.

O2 Power, Azure Power and Tata Power emerged as the winning bidders after all three matched the winning bid of Rs 2.43/kWh. O2 Power secured 400 MW capacity, Tata Power bagged 370 MW capacity and Azure secured 300 MW capacity at the winning tariff. Whereas, AMP Energy has secured 100 MW capacity at a tariff of Rs 2.44 per kWh, according to JMK Research.

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“O2 Power, which is a new entrant in the market will now have a pipeline of 780 MW of solar projects. AMP Energy is also now aggressive in the recent tenders and is looking to build its portfolio and with this 100 MW win, it will now have a portfolio of 300 MW of solar projects in the pipeline,” stated JMK Research.

As per the research agency, the tariffs seen in the last two auctions i.e. earlier SECI 2 GW with the record low Rs 2.36/ kWh tariff and this one are highly aggressive. The low tariff trends can be a desperate situation wherein developers are looking to take advantage of the current situation wherein only safeguard duty of 14.9 percent is applicable. Though there is a highly likely chance of double duties in the form of safeguard duty as well as Basic Custom Duty (BCD) of 20-25 percent due to ongoing China border issues.

There are two possible reasons for such low tariffs:

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• Auctions completed before a formal notification of BCD applicability will get a passthrough under the “Change In law” provision.
• The module prices are also likely to fall further with the increasing gap in the demand-supply situation in the next few months due to slowdown triggered by COVID 19 pandemic. According to the JMK Research price tracker, from Jan 2020- July 2020 period, prices of multi-crystalline modules have already fallen by more than 15 percent in the Indian market.

NTPC had issued the tender for the projects in February with the last date for bid submission initially set for March 19, 2020. However, in July when the tender finally closed, NTPC had received bids of about 1.7 GW capacity. The tender has a minimum capacity utilisation factor condition of 19 percent and a commissioning timeline of 24 months.

In January, we had reported that NTPC had concluded the e-reverse auction for its 1,000 MW of solar projects tender under the Develop Build Demonstrate (DBDT) program, awarding 560 MW capacity to three bidders. According to industry sources, the 1,000 MW solar tender had been undersubscribed, receiving bids for only 700 MW. As the tender had been undersubscribed, only 80 percent or 560 MW of the bid capacity was awarded out of the 1,000 MW tender.

The three bidders that were awarded projects under the tender are Tata Power Solar which won 300 MW capacity after submitting the lowest bid with an EPC quote of Rs 1.925 crore, Jakson Limited was awarded 110 MW and Larsen & Toubro Limited (L&T) was awarded 150 MW project capacity under the tender after submitting a proposal for 300 MW capacity.