No ‘mad race’ in Uttarakhand solar auction but bankability fears remain

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All the winning bids in the latest 170MW Indian state solar auction in Uttarakhand have remained below the INR6/kWh (US$0.09) tariff, despite several bankers commenting on previous auctions that only prices of INR6-6.5 per unit would be workable given India’s market conditions.

However, Ali Naqvi Imran, head, strategy consulting, Gensol Engineering, and Bhuwan Mehta, senior consultant, at Gensol Engineering, who were both present at the auction, told PV Tech that the Uttarakhand bidding appears to be a “welcome change from the mad race” that was seen at the previous three auctions in Madhya Pradesh, Telangana and Punjab, where the winning bids came in extremely close to the INR5/kWh mark.

Fears about the viability of projects won under such low bids in these three auctions were confirmed earlier this month when Gayrajan Kohli, senior manager, consulting, Bridge to India, told PV Tech that discussions with an unnamed leading project developer revealed that it was considering dropping one of the projects it won through an “overly aggressive strategy”.

The Gensol consultants said that the range of winning bids in Uttarakhand was INR5.57-5.99/kWh, with 22 individual projects being awarded in the bid. Indian firm Rays Power Infra was the lowest bidder with an average tariff of INR5.575/kWh.

The two Gensol consultants added: “Although, the questions of viability still remain, there is definitely a sign of caution here, and the tariff is somewhat representative of land and connectivity costs in Uttarakhand as compared to other bids.

“This bid will surely encourage small developers in future, and will help Uttarakhand to build its renewable energy portfolio through future offerings. Interestingly, unlike other bids, the winning bids are uniformly distributed throughout the winning range.”

No further information on the winning bidders was available at the time of writing.

Back in September, when the tendering was announced, Bridge to India consultant Mudit Jain told PV Tech that Uttarakhand already has abundant hydro power resources, while also having “very expensive” land, and he questioned the need for solar capacity in the state.

Last month, PV Tech also interviewed Bridge to India founder and managing director Tobias Engelmeier on the issue of low winning tariffs in India's state solar auctions.

21 September 2021
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