Welspun Wins 'Reverse' Bid for 125-Megawatt Madhya Pradesh Solar Project

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Written by Richard Finlayson, Senior International editor for Industrial Info Resources (Sugar Land, Texas)--The competitive price per electrical power unit, rather than the finite project cost, is now the guiding norm in awarding contracts for many solar projects. This was the case in a "reverse" bidding process in an auction conducted by the state government in Madhya Pradesh, India.

The Welspun Group (Mumbai) was successful in bidding Rs 8.05 ($0.15) per unit to win 125 megawatts (MW) out of 200 MW of solar projects on offer. The contract will consist of one 100-MW project and another of 25 MW. Welspun Managing Director Vineet Mittal said that the $225 million project will be set up on a barren tract of land in the Mandsaur and Neemuch district over an 18-month period.

A solar power project costs between $1 million and $1.8 million per MW, Mittal said. He added that he expected solar energy to become a game-changer and to reach grid parity (tariffs equal to those of thermal power) by 2015. The Madhya Pradesh project will be funded in 75:25 debt-equity ratio.

Bids totaling 430 MW were tendered by 12 developers for the 200 MW on offer. Alpha Infraprop (Mumbai) submitted the lowest bid of Rs 7,900 ($145.30) per megawatt-hour, or Rs 7.9 ($0.14) per hour unit, for 20 MW of capacity, which is about 13% lower than the global average for a photovoltaic project using crystalline panels.

Welspun Energy plans to add about 250 MW in new and renewable energy projects in the current fiscal year. The company is targeting a portfolio of 1,750 MW by 2015-16, 60% of which will be wind energy and the balance solar projects.

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