NTPC bids for setting up solar units receive poor response

By Editor


NTPC has received poor response for bids for setting up 1,200 MW of solar generation units, with only one company winning bids for 300 MW.

China government-backed TBEA Energy was the lowest bidder, quoting a tariff of Rs 2.63 per unit. The company specialises in making power transformers, Financial Express reported on Friday.

The ceiling tariff for the auction was set at Rs 2.65 per unit. Earlier this week, NTPC did not receive response for 1,200 MW of wind power projects.

Many solar developers did not show interest after they saw that solar projects of even state-run NTPC were not spared by the Andhra Pradesh government which recently revised renewable energy tariffs. The state government has written to the company asking it to reduce tariffs for some plants supplying power to the state.

Uncertainties stemming from Andhra’s decision have led to a situation where projects despite being completely constructed are not getting commissioned, and this has reduced the confidence of the firm on NTPC.

Since the ceiling tariff for similar tenders has been kept at Rs 2.78 per unit, it did not make much sense to participate this particular tranche.

The largest thermal power producer of the country has nearly 29 percent of its installed solar capacity in the state. Apart from its own green projects, NTPC acts as an aggregator of renewable energy supplying power to a number of states from solar and wind plants owned by other developers. NTPC earns a trading margin of Rs 0.07/unit from such transactions. Recently, states such as Andhra Pradesh, Punjab and Bihar have requested power regulators to reduce the trading margin for renewable aggregators to Rs 0.02/unit.

The country has ambitious plans of having 175 gigawatt (GW) by December 2022 as against the installed renewable capacity of 82.6 GW. The pace of adding renewable generation capacities slowed down in FY19 due to the devaluation of the rupee, rising finance costs, government-mandated tariff caps in reverse auctions and cancellation of renewable project tenders. India added 8.6 GW in FY19against 11.3 GW and 11.8 GW added in FY17 and FY18, respectively.

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