India Auctions 500 Megawatts Of Solar At US¢3.03 Per kWh

The Indian state of Gujarat has awarded 500-megawatts of solar power in the first auction after the announcement of new import duties on solar modules.

Gujarat Urja Vikas Nigam Limited issued a 500-megawatt solar power tender in January. The capacity was awarded to five companies. NTPC was awarded 150 megawatts, Sprng Energy 120 megawatts, Coal India 100 megawatts, Tata Power Renewable Energy 60 megawatts, and SJVN 70 megawatts. These projects were awarded at a tariff of Rs 2.20 and Rs 2.21 (US¢3.03-3.04) per kilowatt-hour.

In this auction, the world’s largest coal mining company, Coal India Limited, joined other public sector companies like NTPC Limited (India’s largest power generation company), SJVN (a hydropower generation company), and NLC India Limited (another coal mining company) in the solar power market.

Interestingly, this was the first auction held after the Minister of New and Renewable Energy imposed a customs duty of 40% on solar modules. While credit rating firms and industry watchers expected an increase of around Rs 0.50 (US¢0.69) per kilowatt-hour in tariff bids, the bids actually increased by only Rs 0.20 (US¢0.27) per kilowatt-hour compared to the all-time low tariff bid of Rs 1.99 (US¢2.74) per kilowatt-hour witnessed in another recent tender in Gujarat.

Apart from the less-than-expected rise in tariff bids, another surprise in this auction was the high participation by developers. Gujarat had decided to cancel contracts for 800 megawatt solar power projects auctioned last year, claiming that the tariffs discovered were high.