Rajasthan is the most attractive solar location after NTPC auction results

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Rajasthan seasoned its locale as the most alluring solar project harbor in the country with the latest NTPC auction in the desert state, which saw the winning bids falling to Rs 4.35-4.36 per kwH.

By Baishakhi Dutta

Of the 130 MW on offer, 50 MW was won by Shapoorji Pallonji Infrastructure Capital and 60 MW by Mahindra Susten, both offering to sell electricity produced from their projects at an identical Rs 4.35 per kwH. The remaining 20 MW was won by Prayatna Developers of the Adani Group at Rs 4.36 per kwH.

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In these contrary auctions, the developer that offers to sell electricity at the lowest price wins.

The latest wining prices are just a shade over the lowest ever offered by a solar project developer in India — that, too, in Rajasthan. Fortum Finnsurya bid Rs 4.34 per kwH to win a 70 MW project at the last NTPC auction in Rajasthan in January.

Solar tariffs fell drastically in 2015, but appeared to have bottomed out after the Bhadla Solar Park auction. In at least five auctions since — in Maharashtra, Gujarat, Uttar Pradesh, Andhra Pradesh and Chhattisgarh — the winning tariff remained stuck at the reserve price of Rs 4.43 per kwH (barring one bid of Rs 4.41 per kwH in Maharashtra).

In other auctions, the price was higher. Anxieties were expressed that intrusive bidding had pushed solar tariffs too low and a correction was likely.

Developer interest also seemed to have been tapering off in some of the auctions this year. The Gujarat auction of 160 MW of capacity in late-June, for example, drew only three bidders.

The latest Rajasthan auction, however, has belied those apprehensions. Not only has the tariff fallen, but the interest shown was also enormous, with 21 developers, including many of the top names in the business, making bids.

The auction thus underlines Rajasthan’s inherent solar advantage, due to the high radiation it receives. It also shows that both tariff and developer interest depend crucially on project location.

 

 

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