Solar power tariff remained below Rs 5 per unit in the latest auction conducted by state-run NTPC Ltd for 500 MW capacity at Pavagada Solar Park in Tumkur, Karnataka.
"The lowest tariff was quoted at Rs 4.78 per unit in the auction concluded yesterday by the NTPC Ltd for its solar capacity at Pavagada Solar Park in Tumkur district of Karnataka," a source said.
"One company quoted Rs 4.8 per unit while four firms gave same price of Rs 4.79 per unit under the auction for solar project," he said.
However, the tariffs bid were above the record low of 4.34/unit seen in January.
RattanIndia arm Yarrow Infrastructure Ltd quoted the lowest price of Rs 4.78 per unit and bagged 50 MW project under the auction conducted by NTPC yesterday.
Adani, Fortum India, ACME and Tata Power Renewable quoted the price of Rs 4.79 per unit and bagged 100 MW each under the solar power park project.
Renew Power gave the price of Rs 4.80 per unit and got 50 MW under the project.
NTPC has planned a capacity addition of about 1,000 MW through renewable resources by 2017. It has already commissioned 110 MW Solar PV Projects and another 15 MW Solar PV and 8 MW Small Hydro Projects are under implementation.
Solar power tariff had touched all time low of Rs 4.63 per unit in November last year when SunEdison quoted the price of electricity in an e-auction by NTPC for 500 MW project in solar
power park in Kurnool District of Andhra Pradesh.
After that the solar power tariff fell to another all-time low of Rs 4.34 per unit when Finland-based energy firm Fortum Finnsurya Energy quoted this price to bag 70 MW solar plant under NTPC's Bhadla Solar Park tender in January.
Under this auction, NTPC had bid out 420 mw in six blocks of 70 mw each at Bhadla Solar Park in Jodhpur district of Rajasthan.
Others who won projects included Rising Sun Energy Pvt Ltd (two blocks for Rs 4.35 a unit), Solairedirect (two blocks for Rs 4.35 a unit) and Yarrow Infrastructure (one block for Rs 4.36).
Earlier last year NTPC had committed to 10,000 MW through solar power generation capacity at the Renewable Energy Global Investment Meet.
(REOPENS DCM 39)
Credit rating agency ICRA said, meanwhile, that it expects the growth witnessed in capacity addition in the solar energy segment to be maintained in the foreseeable future.
This growth is largely being driven by a significant improvement in the tariff competitiveness of solar PV, which has been facilitated by substantial reduction in capital costs on one hand as well as adoption of competitive bidding by procuring utilities on the other, it said.
ICRA believes however that tariffs quoted by the successful bidders are very aggressive and the viability of such competitively bid tariffs hinges on keeping the cost of modules and financing costs within budgeted levels.
In ICRA's view, the amendment in the solar renewable purchase obligation (RPO) norm from 3 to 8 per cent by FY2022 in the National Tariff Policy (NTP) is a key positive for the solar energy sector.
This should facilitate capacity addition in line with the revised capacity target of 100 GW by FY2022 (earlier 22 GW) under National Solar Mission (NSM), ICRA said.
In ICRA's estimates, assuming a 7 per cent annual energy demand growth, an additional 78 GW in solar energy capacity would be required over the seven-year period from 2015-16 to 2021-22 to hit the revised solar RPO target of 8 per cent by 2022.
"Going by the project awards and tenders floated as on date, about 5.7 GW of capacity addition is expected to happen in the current financial year. However the caveat is, the actual addition to capacity would hinge on timeliness in the award of projects under State and Central Government policies and the subsequent signing of power purchase agreements (PPAs) with the buyers, viz. The State-owned utilities" said Sabyasachi Majumdar, Senior Vice President, ICRA Ratings.
