In a recently concluded auction conducted by SECI, (Solar Energy Corporation Of India) solar projects worth of 1,200MW were auctioned.
The auctions attracted developers from both Indian and foreign companies as the tariffs were quite low which enabled solar ventures to increase the cost of the solar products due to pertaining to safeguarding resources.
This auction was a bit different as compared to the earlier auctions. Since safeguard duty was imposed on solar panels and modules a year and a half ago, SECI had not considered the likely increase in costs for developers, while setting the ceiling tariffs. SECI has recently implemented the “change in law” clause as Power Purchase and Sale Agreement for the 1200 MW project were put in place. According to the additional clause, if the law is changed on account of safeguard duty, customs duty or anti-dumping duty, the solar power developer can exercise an increase or decrease in tariff on solar photovoltaic (PV) modules. The increase or decrease in tariffs will be equivalent to ₹0.05 for each unit for every increase or decrease of ₹100,000. This might have a huge impact on the cost of solar PV Modules and as well as solar energy altogether.
The auction comes after a decision regarding a detailed request for selection of tender in the documents was made in January 2020 and was also taken positively by the solar developers. Though the tender was available for the developers to see in the year 2019, the details were made exclusive, only after a discussion with the solar businessmen.
SB Energy funded by Softbank bought 600 MW, while the others which included AMP Energy and Jean-Bernard Levy owned Électricité de France S.A were awarded 100 MW and 300 MW respectively at a cost of INR 2.5 per unit. There were some commotions of startups as well in the auctions as the Goldman Sachs backed Renew Power Limited got a tender of 200 MW at a cost of 2.51 per unit.
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