Uttar Pradesh prepares to procure another 550 MW of solar

The state has set an electricity price ceiling of Rs3.10/kWh and reserved the right to cancel the auction if it doesn’t fancy the resulting tariff. Bidders can go for projects ranging in size from 5 MW up to the whole capacity on offer.

October 23, 2018 Max Hall

Pacesetter Uttar Pradesh is set to fire the starting gun on another set of utility scale solar projects, but what will the tariff be?

Image: Abhijeet Vardhan

The New and Renewable Energy Development Agency of Uttar Pradesh (UPNEDA) has invited interested bidders to a pre-bid meeting on Thursday, to discuss details of its latest 550 MW procurement exercise.

UPNEDA this month published a request for proposals for the tender, which will encompass PV and CPV projects ranging from 5 MW in scale, and offering the possibility for one bidder to scoop the entire 550 MW pot.

Submissions of interest to take part in the reverse auction – which has yet to have a date confirmed but is intended to be on December 4 – can be made until 6pm on November 14.

UPNEDA has set a maximum tariff ceiling of Rs3.10/kWh and reserves the right to cancel the auction in the event of only one or two bidders meeting the qualification criteria or, more importantly, “if the single quoted tariff after [the] reverse auction is not aligned to the prevailing market prices”.

Will tariff price rise or fall?

Successful bidders, who can include thin-film PV modules in their projects, will sell electricity to the Uttar Pradesh Power Corporation Ltd – which will take the power generated by the first 500 MW of projects – and to Noida Power Company Ltd, in each case under a 25-year PPA.

Projects can be established anywhere in the state and successful developers must provide evidence of ownership of 1.5ha of land per MW of capacity bid for, within 12 months of signing the power supply deal – expected to be on February 2.

Foreign companies involved in the bidding must establish an Indian company before signing the PPA and all projects must achieve financial closure within a set date of signing such deals, expected to be February 2, 2020.

Projects up to 250 MW in size have a 21-month deadline after signing the PPA to complete commissioning, with that timespan extending to 24 months for schemes of 250 MW and above, although the terms of the tender allow for a six-month extension in each case.

All eyes will be on the tariff that comes out of the reverse auction as speculation continues to swirl about the effects on the price of PV-generated electricity caused by a depreciating rupee against the dollar, as well as the effects of a 25% safeguarding duty on Chinese and Malaysian solar imports, and the imposition of GST on PV projects.

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