Odisha's power trader Gridco to buy 300 Mw from ensuing SECI auctions

Odisha’s bulk power buyer and trader Gridco has shown enhanced appetite for solar power. Close on the heels of its maiden auctions for 200 Mw capacities, the power trader is eyeing procurement of 300 Mw more from the ensuing auctions to be conducted by the Solar Electrification Corporation of India (SECI).

To firm up its share, Gridco has entered into a power sales agreement with SECI. Power from the capacities to be auctioned, is expected to feed the state grid from the end of 2019-20 onwards. The schedule is in sync with the normative 18-month gestation period for commissioning a solar power unit.

Gridco, despite its pressing Renewable Purchase Obligation (RPO), has been sluggish to buy green power. Until its recent solar tenders, the state controlled entity was shelling out Rs 4.5 per unit to purchase solar power. More, the profusion of coal-fired capacities in Odisha had dissuaded the bulk power buyer to build its renewable pool. But, the competitive price discovery at the auctions and the promise of cheaper power tariffs at SECI auctions has enthused Gridco.

“At our auctions, the L1 bidder quoted a price of Rs 2.79 per unit. But, SECI has assured us solar power at an even more competitive tariff of Rs 2.57. What’s more, we don’t have to pay the transmission and wheeling charges as they are exempted under the agreement”, said an official in the know.

Aditya Birla Renewables has emerged as the lowest bidder at the solar auctions conducted by Gridco. The company has proposed to install 75 Mw capacity in a diffused manner, opting for five locations, said a source familiar with the plan. Odisha Industrial Infrastructure Development Corporation (Idco), the state owned agency will help the developer in allotment of land for the planned solar installs. Gridco is believed to have initiated talks with Aditya Birla Renewables for a long-term power purchase agreement (PPA) spanning 25 years.

For the L2 and L3 bidders, Gridco is negotiating the tariffs to bring them on par with the quote by Aditya Birla Renewables. Three players are tied up at the L2 level with a price quote of Rs 3.19 per unit- Sukhbir Agro Energy Ltd, city based Gupta Power Infrastructure Ltd and Eden Renewable Varenne Private Ltd, bagging 25 Mw, 20 Mw and 50 Mw capacities respectively. Acme Solar finished as the L3 bidder, quoting Rs 3.20 for 50 Mw unit.

Gridco sources said they won’t budge from the L1 price point for the other bidders. If the L2 and L3 bidders do not consent, their capacities could be allotted to Aditya Birla Renewables. Gridco’s tenders were also accompanied by a Green shoe option where the total allotment could be hiked to 300 Mw. However, a decision on allocating extra capacity to the lowest bidder still lingers with the Gridco authorities.

After a slow start, Odisha is gradually warming up to solar power. Gridco’s solar procurement now stands at 168 Mw- this includes 93 Mw generated within the state and 75 Mw procured from elsewhere.