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Are Odisha solar tariffs really competitive in the face of safeguard?

In order to keep the solar tariffs under the limit of INR 3 per unit, GRIDCO may retender capacities with higher tariffs. The tender size was 200 MW in which Aditya Birla Renewables had quoted the lowest tariff of INR 2.79. Incidentally, it was the only company to quote the tariff under INR 3 when Supreme Court had just cleared the confusion around safeguard duty.

Are Odisha solar tariffs really competitive in the face of safeguard?
Source: SolarDae Research

Other successful bidders were asked to match their solar tariffs with Aditya Birla but according to GRIDCO, they have not buzzed. Therefore it is considering to re-tender the capacities of other bidders. The total capacity that will go for retendering will be 125 MW.

Interestingly the norms of GRIDCO tender allowed a pass-through to developers due to change in the law. These laws pertained tax and duties that impacted their solar tariffs after entering PPA. Therefore at the time of going to bid none of them had considered the impact. In the absence of safeguard, the tariffs should have been lower than INR 3 in continuation with the trends of 2018. In fact, the solar tariff had even hit the lowest in GUVNL 500 MW Ph II auction.

Solar power tariff touches just the lowest in Gujarat
Source: SolarDae Research

Since the GRIDCO tender allows a pass-through the solar tariff of Aditya Birla Renewables may even go beyond INR 3. In compliance with the norms whatever the new tariff will be GRIDCO will have to accept.

Retendering to keep the solar tariffs at sub-3 levels

Generally, in a state tender, the solar tariffs are higher in comparison to tenders of the central government. But GUVNL tender of Gujarat has proven otherwise. The tariff in this tender was INR 2.44. Across Pan-India the state and central agencies are trying to keep the solar tariffs at sub-3 levels. That is why the agencies are cancelling the capacities with high solar tariffs and then re-tendering them.

Post Author: Ankur Kumar Jha

Founder SolarDae || MBA Power Management || B.E (Mechanical)

Ankur analyses mainstream media coverage of renewable energy in general and solar in particular; he tracks the ongoing development of regulations and policies and incorporates them in his opinion. He can be reached at +91-8860726731 for any assistance in rooftop solar and utility-scale projects.

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