India Gears Up for its Largest Auction of Solar Power Projects

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Researched by Industrial Info Resources India (Delhi, India)--India is set to auction another 1,500 megawatts (MW) of solar power projects under the country's National Solar Mission. Under this round Ministry of New and Renewable Energy (MNRE) through Solar Energy Corporation of India Limited (SECI) (New Delhi) will offer projects to prospective developers through the largest auction of solar power projects in the country's history.

The capacity being very large, the ministry will split the auction into two offerings of 750 MW each. The first auction will be held before the end of the current financial year. The previous round of auction for 750 MW capacity conducted by MNRE last year attracted bids of about 2,170 MW.

According to draft guideline issued by MNRE, the prospective project developers would be given a base tariff and would be asked to submit bids stating how much discount they are willing to accept on this base tariff. The Central Electricity Regulatory Commission (CERC) has recommended a tariff of $0.12 per kilowatt hour (kWh) for the current financial year.

Out of the total capacity of 1500 MW to be offered under Batch-II of second phase of Solar Mission, 500 MW will be kept for bidding with Domestic Content Requirement (DCR). Under DCR, the solar cells and modules used in the solar PV power plants must be made in India.

The power generated from these projects will be purchased by NTPC Vidyut Vypar Nigam Limited (NVVN) (New Delhi), which trades electricity for the country's largest power producer NTPC Limited (BSE: 532555) (New Delhi) and has access to substantial supply of thermal fuels-based electricity.

NVVN will pool the electricity generated by the solar power projects with the coal-based electricity from NTPC's power projects to cut the cost of the total quantity of electricity to be sold to power distribution companies across the country. The company currently pools four units of coal-based electricity with a unit of electricity from solar power projects, which were commissioned under the first phase of the Solar Mission.

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