The first solar auction after the announcement of the basic customs duty on solar imports fetched a tariff of Rs. 2.20 per unit, a lot to the shock of the renewable energy sector.
At present, the lowest tariff in India is Rs. 1.99 per unit, which was held by the Gujarat Urja Vikas Nigam Limited (GUVNL).
Post announcement of imposition of a basic customs duty from April 2022, the industry was anticipating a rise of around 25% from the benchmark cost, which would result in a hike of at least 45 to 50 paise per unit.
In GUVNL hosted auction of total 500 MW bid, State-run power giant NTPC won 150 MW, Actis-backed Sprng Ujjvala Energy won 120 MW, Coal India 100 MW, Tata Power arm TP Saurya 60 MW, all at Rs. 2.20. SJVN Limited won a further 100 MW at Rs. 2.21 per unit.
Other bidders who fell quick on this auction had been ReNew Power, Saudi-backed Aljomaih Energy, Ayana Renewable Energy and Juniper Green Energy.
Earlier Gujarat Urja Vikas Nigam (GUVNL) had cancelled the awards citing high tariffs in 700 MW project at Dholera auction. GUVNL had said that the discovered tariffs might be a financial burden, and a lower tariff could be possible.
“We were expecting a natural market correction from the record low of Rs. 1.99, and then some hike of around 40 paise to take into account the BCD. It’s quite surprising that we’re seeing Rs. 2.2, which is a huge boost for the industry as a whole for future auctions,” said an executive from a renewable energy developer requesting anonymity.