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Solar power tariffs crashed to a new low of Rs. 3.15 a kWh at the NTPC auctions that concluded on Tuesday for 250 MW at Kadapa, Andhra Pradesh. The previous record was Rs. 3.29 (averaged over 25 years) at the Rewa auctions in February.
With this, French company Solairedirect, which won the rights to put up the solar plants and sell power to NTPC, has created history twice over.
In December 2011, it had won 5 MW of capacity rights at a then-record low tariff of Rs. 7.49 a kWhr, springing a “sub-8 surprise”. Solairedirect has since been acquired by the French utility Engie. The 250 MW adds to its Indian solar portfolio of 450 MW.
For the Kadapa project, the second-best bidder, Actis-backed Ostro Energy, bid just one paisa higher. The other bidders were Canadian Solar Energy ( Rs. 3.39), Greenko Energies ( Rs. 4.09), Azure Power ( Rs. 4.38), Mohoba Solar ( Rs. 4.54) and Mahindra Renewables ( Rs. 4.68).
That the highest quote was Rs. 4.68 shows how steeply solar tariffs have fallen. In 2015, when SunEdison won 500 MW quoting Rs. 4.63, it was criticised as a maverick whose quote would kill the industry.
The new low tariff was aided in part by a stronger rupee, which makes imports of solar modules cheaper. “On February 10, the rupee was Rs. 66.93 to a dollar; on Tuesday it was Rs. 64.50, notes Balaraman Kapali, founder of forex consultancy Optimal Results.
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