Indias Largest Solar Tender - Lowest Tariff Ever

 Azure Power and Acme Solar have managed to secure the rights to develop 600 megawatts of capacity each in the largest solar power tender issued by the Solar Energy Corporation of India. This is the largest tender issued in the country ever. Tenders with 2 gigawatts of capacity each were issued by the states of Telangana and Jharkhand.

 
The tender was issued early this year and received bids worth 2.95 gigawatts in the final round of auction from eight developers. Azure Power and Acme Solar each placed successful bids to develop 600-megawatt capacity. 
 
The bid of Rs 2.44/kWh is jointly the lowest-ever in Indian solar power market. Acme Solar had bid Rs 2.44/kWh for a 200-megawatt solar power project in the state of Rajasthan. 
 
This tender was the first in a long list of similar tenders that have already been launched and will be launched in the future by SECI. According to the tenders, project developers will be free to choose the site for the project with no direct help from the government machinery. The companies will also have to apply for connectivity to the inter-state transmission network.
 
The reasons for such low tariff bids are multi-fold. The first reason is that the developers are free to set up projects wherever they want, and the capacity on offer is very big. The second reason, the power purchase agreements will be signed with SECI — a government-owned company — which represents a very low risk. Third, no charges for transmission of solar power across different states.
 
Over the last few weeks, SECI launched a second tender with the same conditions and offered 3 gigawatts of capacity. Updates on technical bids submitted against it are awaited.
 

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