Finally, only 600 MW of the 2 GW solar tender by NTPC will be commissioned at a tariff of 2.60/kWh. The projects awarded under National Thermal Power Corporation’s (NTPC) 2 GW auction have been canceled due to regulatory delays.
The projects awarded to ACME Solar, Shapoorji Pallonji, and Azure Power for 600 MW, 500 MW, and 300 MW respectively. The developers confirmed the news to a media agency. SoftBank-owned power producer, SB Energy was awarded 600 MW of projects at a tariff of ₹2.60/kWh, which is the only capacity that was not canceled. SB Energy had placed a bid for 2 GW in the auction but was awarded only 600 MW.
The 2GW capacity initially tendered by NTPC in March 2018 was oversubscribed by 4.2 GW in July the same year. However, later Indian solar project developers complained to the MNRE that the maximum allowable capacity to bid for in this tender was too large. The domestic developers reasoned that such a large bid size will prohibit some of the serious players based on financial criteria such as net worth requirement, turnover requirement, line of credit, etc. Restricted competition may not provide the desired tariff levels, according to a news media report.
On imposition of a safeguard duty later, NTPC had offered bidders until August 13, 2018, to revise and resubmit their bids for the 2 GW ISTS-connected solar tender, which was again oversubscribed three times over. Explaining the reason for cancellation, one of the developers stated that the Power Purchase Agreement (PPA) stood terminated because the two-month deadline for obtaining certain regulatory approval had lapsed.
As per the terms of the PPA, the distribution companies (DISCOMs) were required to obtain the approval on the tariffs, the NTPC’s trading margin, and the contracted capacity by the state electricity regulatory commission within two months from the effective date of the agreement. On failing to do so, the PPA will stand terminated, unless both parties into the agreement mutually agree to extend the timeline.