India auctions 750 MW of solar power

India auctioned off 750 megawatts of utility-scale solar power capacity over the last few days to wrap up a highly eventful 2017 that saw new records being created in terms of tariffs. The famous Bhadla solar power park in the Indian state of Rajasthan is in the news once again. The Solar Energy Corporation of India auctioned 750 megawatts of solar power capacity at this solar power park. Interestingly, while the projects will be located in Rajasthan, the power generated will be acquired by the neighboring state of Uttar Pradesh. There were two separate auctions of 500 megawatts and 250 megawatts. The first auction of 500 megawatts was oversubscribed 6 times over with interested developers submitting bids for 3.1 gigawatts. The tariff bids were between Rs 2.47/kWh (3.80¢/kWh) and Rs 3.29/kWh (5.07¢/kWh). While the viability gap funding (capital support by the government) was on offer, none of the developers opted for it. Hero Future Energies secured 300 megawatts of capacity at Rs 2.47/kWh (3.80¢/kWh) and SoftBank-backed SB Energy won rights to develop 200 megawatts at Rs 2.48/kWh (3.81¢/kWh); SB Energy had actually placed bid for 500 megawatts of capacity. Other major developers that submitted bids but failed to make the cut in this auction include Actis Energy, Azure Power, Canadian Solar, ReNew Power, EDF, and Solairedirect. Acme Solar, too, participated in the auction and quoted Rs 3.03/kWh (4.67¢/kWh) for 300 megawatts of capacity. Interestingly, this bid is 24% higher than the bid Acme had placed in May 2017 in a similar auction for a project in the Bhadla solar power park. That May 2017 bid of Rs 2.44/kWh (3.7¢/kWh) remains the lowest-ever tariff for a solar power project in India. Acme is expected to launch an initial public offering to raise funding for this project. The second auction for 250 megawatts of capacity also witnessed huge participation from project developers. Prospective developers placed bids for 1,350 megawatts, translating into an oversubscription of 5.4 times. Azure Power and ReNew Power Ventures secured rights to develop 200 megawatts at Rs 2.48/kWh (3.88¢/kWh) and 50 megawatts at Rs 2.49/kWh (3.89¢/kWh), respectively. Three companies — ReNew Power Ventures, SB Energy, and FRV Solar had placed bids to set up the entire 250 megawatt capacity. Other bidders included Actis Energy, Hero Future Energies, Canadian Solar and EDEN RE. Power generated from this 750 megawatt capacity will be acquired by Uttar Pradesh, which has not seen such low tariffs in its own solar power auctions. Uttar Pradesh utilities recently signed power purchase agreements for solar power at Rs 7.02/kWh (11¢/kWh). The power supplied to Uttar Pradesh from the Bhadla solar power park will now come at additional cost as the central government has exempted inter-state transmission of solar power from any charges.