Low Bids for Projects Leads to Lower Indian Solar Feed-in Tariffs

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--India's solar power project pipeline continues to grow, indicating that 2012-13 should see a record number of solar facilities commissioned and producing power in the country.

The Phase I bidding process of the Jawaharlal Nehru National Solar Mission, in which projects were awarded to the lowest bidder regardless of previous experience in concentrating solar power (CSP) projects, saw keen bidding from 60 companies with a total of 470 megawatts (MW) of projects awarded. If project details are completed and signed off before the deadline, all of these projects should be completed by May 2013.

It is significant that after the Central Electricity Regulatory Commission (CERC) had set the grid feed-in tariff for CSP at 15.31 rupees (about $0.29) per kilowatt-hour (kWh), the successful bidders proposed even lower discounts, bringing the tariff down to between Rs 10.49 ($0.19) and Rs 12.24 ($0.23).

In Gujarat, more than 300 MW of solar power generation capacity is scheduled to be commissioned by the end of January 2012, adding to the 91 MW already commissioned. The January total includes 200 MW in the Charanka Solar Park.

The Gujarat Urja Vikas Nigam Limited (GUVNL) has signed power purchase agreements for 968.5 MW of solar power capacity with a feed-in tariff of Rs 15 ($0.28) per unit for the first 12 years and Rs 5 ($0.10) per unit from the 13th to 25th year. These rates apply to projects completed by December 31, 2011, and generating power by January 28, 2012. There will be penalties of Rs 10,000 ($190) per MW for completion delays after the end of December.

Rajasthan has opened a bidding process for 200 MW of solar capacity equally divided between CSP and photovoltaic (PV). CSP projects will be in the 50-MW range and PV between 5 MW and 10 MW. The deadline for submissions is the end of January, and bids will be opened in mid-April. An auction for an additional 50 MW will be opened to companies that agree to build manufacturing plants. The proposal is that companies will be licensed to install 10 MW of solar power for every 25 MW of manufacturing capacity built.

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