The bidding for projects under the ‘Batch-II' of the first phase of the National Solar Mission will close tomorrow (Friday). In this round, various solar power developers will bid for projects of 350 MW of total capacity.
The cost of putting up one MW of solar PV capacity today is about Rs 11 crore. Therefore, the bidding process will create a Rs 4,000-crore business in India.
It is not clear if the names of the successful bidders would be announced on Friday. During the Batch-I, it was announced the same day, which helped the Government steer clear of any allegations of ‘inspired leaks' and earned it accolades for transparency. The process is handled by NTPC Vidyut Vyapar Nigam Ltd (NVVN), the power trading arm of NTPC, which has been nominated by the Government to handle the Phase-I of the Solar Mission.
Allocation process
As in the ‘Batch-I' of Phase-I, the project developers will quote a tariff, at which they will sell the power to NVVN for the next 25 years. The quotes will be arranged in the ascending order, so that those who sell the power cheapest will be given the projects first. The allocation process will stop when the total capacity of projects allocated reaches 350 MW.
Last time around, the tariffs quoted were as low as Rs 10.90 a unit, which raised questions on the viability and bankability of the projects. However, the prices of modules – panels that generate electricity when sunlight falls on them – have been falling more steeply than earlier expected.
What was selling at $1.70 a watt is now looking for buyers at 90 cents a watt. Most of the module manufacturers — many of them, Chinese — are bleeding. Against this backdrop, the entire global solar market will be looking at what tariffs the developers quote in the bidding that ends on Friday.
Karnataka bids
Apart from the National Solar Mission, the Karnataka state is also expected to announce the results of a bidding process that concluded last week. The Karnataka Renewable Energy Development Ltd had held back announcement of the names of the successful bidders and the tariffs they quoted, in order not to influence the National Solar Mission bidding.
Karnataka has bid out 80 MW of capacity. That is another Rs 1,000 crore of business.
Karnataka is only the second State, after Gujarat, to come out with its own solar policy — another reason why its results will be closely followed.