New Delhi: The lowest tariff discovered at an e-reverse auction conducted by Maharashtra State Electricity Distribution Co Ltd (MSEDCL) for the procurement of power from 500 MW inter/intra state grid-connected solar power projects on a long-term basis is about 21.6 percent higher than the record-breaking tariff of Rs 1.99/kWh, said a report released by JMK Research on Thursday. "The L1 tariff of this tender of Rs 2.42/kWh is about 21.6 percent higher than the record-breaking tariff of Rs 1.99/kWh seen in the GUVNL 500 MW tranche IX auction conducted in December 2020," it said in a report.
This tariff increase is primarily on accounts of the applicability of Basic Customs Duty (BCD) of 40 percent on solar modules from April 1, 2022, onwards. Another reason is the possibility of a minimal fall in module prices in the next 12-15 months that might be factored in by the developers before bidding. Module prices have increased by more than 20 percent in the last four months in India, said JMK Research.
In this auction, Acme Solar is the lowest bidder who has won 300 MW capacity at a tariff of Rs 2.42/kWh, while Renew Power has won 200 MW capacity at a tariff of Rs 2.43/kWh. This is Acme's second win in the last six months. The first one was a 90 MW capacity won in SECI 1,200 MW Hybrid ISTS-Tranche III, January 2020 tender.
Other participants included MAHAGENCO, Torrent Power, NTPC, Tata Power, Azure Power, Avaada, Power Mech Projects, O2 Power, and Maharashtra State Road Development Corporation Limited (MSRDCL). An interesting aspect to note is that this was the first time that Power Mech Projects and MSRDCL have participated in a solar tender.
MSEDCL has conducted an e-reverse auction after a gap of 14 months for the procurement of power from 500 MW inter/intra state grid-connected solar projects on a long-term basis. The tender was floated in May 2021 with a commissioning timeline of 15 months and 18 months for the projects located in and outside the solar park, respectively. Also, the minimum requirement for the Capacity Utilization Factor (CUF) was 19 percent for these projects.
This tender is also the first fully subscribed MSEDCL solar tender in the last 18 months. Also, amongst all the last seven solar auctions conducted by MSEDCL, the tariff observed in this tender is the lowest of all.
There are four more reverse auctions pending this month, where bid submission has already taken place. These tenders have got a tremendous response from the market. RUMSL 550 MW solar (Agar) and RUMSL 500 MW solar (Shajapur) tenders are oversubscribed by about 13 times, MSEDCL 500 MW wind-solar hybrid is oversubscribed by 2.6 times, and SECI 1,785 MW solar tender is oversubscribed by ~6 times.
Clearly, RUMSL tenders are preferred amongst bidders as it is completely financed by the World Bank and more than 90 percent of the land allocation is already done. SECI's 1,785 MW tender in Rajasthan has also got a good response from the industry. As per the current pipeline of SECI auctions, the only other plain-vanilla solar auction that is pending (apart from the 1,785 MW tender) is the 2,500 MW UMREPP ISTS X tender in Karnataka.
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