Solar power tariff touches record low of Rs 2 per unit in SECI auction

rates touched a new record low of Rs 2 per unit in an auction held by the Solar Energy Corporation of India (SECI) for 1,070 MW projects, on Monday.

SECI is a fully-owned subsidiary of the Ministry of New and Renewable Energy entrusted with the tendering process of renewable projects in the country.

The two companies which quoted the lowest tariff were Saudi Arabia-based Al Jomaih Energy and Water Co Ltd and Green Infra Wind Energy Ltd, a unit of Singapore-based Sembcorp Industries for 200 MW and 400 MW, respectively.

Al-Jomaid Energy & Water is a private limited company headquartered in Dammam, Saudi Arabia, and owned by Saudi based enterprises. The Indian entity – Aljomaih Energy And Water India Private Limited was incorporated in September 2020.

State-owned NTPC Limited also bid aggressively in this round and was the second highest bidder with a quote of Rs 2.01/unit. It will be awarded the balance capacity as the bid followed a bucket-fill method.

IDFC Securities on Tuesday in its note said that the reason benid such low bids is that there is purchase security. “The bid is for setting up plant in Rajasthan and the power purchase agreement has been signed with the state’s power distribution companies (discoms).”

It further said, “We heard from industry participants that one of the reasons for low solar prices in this round is that developers are looking to deploy bifacial modules and single axis trackers.”

The last lowest tariff discovered was in June this year when Spanish renewable Solarpack Corporation bid Rs 2.36 per unit for constructing a 300 Mw solar power project in a tender floated by SECI. The project location was pan-India.

Before this, the lowest solar tariff in India was Rs 2.44/unit offered by ACME Solar in 2018 for a 600 Mw project to be based in Rajasthan. The project is under litigation as ACME wants to cancel it.

The current tender is the first such tender with a majority capacity bid and won by foreign players.

India has set an ambitious target of 175 Gw of renewable power by 2022. Solar power will contribute 100 Gw. Under the Paris Climate Change summit, India has committed 40 per cent of its energy demand to come from clean energy sources.

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