Maharashtra’s recent 1000 MW solar auction saw the lowest tariff of Rs. 2.74/unit. The last auction conducted 8 months ago had the same tariff, hence, seeing no change. Shiv Solar and ACME Solar have quoted the lowest tariff of ₹2.74/kWh in the recent auction conducted by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) for the purchase of power on long term basis from 1,000 MW grid-connected solar photo-voltaic power projects (Phase – II).
The other bidders in the auction were ReNew Power and Avaada Energy, with both quoting the tariff of ₹2.75/kWh to develop 300 MW and 350 MW respectively. Avaada Energy had bid for 500 MW but will be awarded only 350 MW due to bucket-filling method applied to the awarded capacities in reverse auctions.
A developer on condition of anonymity, reported,
“Lower tariffs were in any case not justified as all kinds of costs are going up… Prices should rise, but the moment they do, states have been cancelling the auction itself. So developers have stayed close to the old price.”
Higher tariffs have led to cancelling of the entire solar auction in recent past in Gujarat. The Gujarat government cancelled the solar auction for 700 MW it held in December on the grounds that the winning tariffs reached were too high.
The decision was conveyed to the winning developers at a meeting on Thursday, attended by Gujarat’s additional chief secretary in the energy department, Raj Gopal, and officials of the Gujarat Urja Vikas Nigam Ltd (GUVNL), the agency which conducted the auction.
The benefit of the latest Maharashtra solar auction is that projects can be set up anywhere in the country, not necessarily in the state itself, and the power can be transmitted to Maharashtra. Another developer reported that,
“Winners may not build their projects in Maharashtra, which has lower solar radiation than states like Rajasthan… They could build them in Rajasthan and send the power to Maharashtra, which is perhaps why they have quoted low tariffs.”
The safeguard duty and it’s effect remains negligible at the moment.
Source: The Economic Times
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