At Rs 2.71, Developers Hold Their Ground on SECI’s ISTS-VI Auction

In the latest auction for 960 MW of inter-state transmission system (ISTS-VI) connected solar projects, SECI has declared ReNew Power (300 MW) at Rs 2.71 /kWh, Avaada Energy (300 MW) at Rs 2.71 /kWh, Masaya Solar Energy (UPC Renewables) (300 MW) at Rs 2.71/kWh, and Tata Power (60 MW) at Rs 2.72 /kWh as winners. For those who may have missed out, Masaya Solar is associated with the Haryana-based UPC Renewables group.

The winning bids continue to test the limits of the unofficial government push to keep prices in the rage of Rs 2.70 to Rs 2.90, depending on the sites and conditions. The sites for this round are all over India.

Readers will recall that for this particular auction, which was meant to be for 1.2 GW (1200 MW)initially, the tariff bids had been capped at Rs 2.65 /kWh, which taken ll the way to Rs 2.78 /kWh by the fourth set of amendments, after pushback from developers. Thus, the price has effectively moved up by 7% over the ISTS V tender bids of Rs 2.58.

The  ISTS-V had been seen a dramatic drop in interest, being subscribed for only 50% of offered capacity,  or 600 MW.That meant, as per ministry guidelines, only 80% of the bid capacity could be awarded. Thus,  480 MW was given out at the Rs 2.58 price.

Clearly, even those prices may be history, as the results of ISPS VI show.

With the government at complete odds with independent rating and research agencies on India’s march to 100 GW of solar by December 2022, what is clear is that it is time to shift focus from pushing down bid prices to seeking efficiencies in the remaining part of the distribution chain. Inefficiencies that seem to be adding on anything between 80 percent to 125 percent to the power purchase cost of renewables.

It is also believed that subject to storage costs dropping down, there may be a renewed push for solar hybrid projects that can tackle the issue of grid stability as well as curtailment of renewable buys, being resorted to by discoms ever since tougher norms on payment terms have kicked in.

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Prasanna Singh

Prasanna Singh

Prasanna has been a media professional for over 20 years. He is the Group Editor of Saur Energy International

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