Shocker! MPUVNL Gets Lowest Bid of Rs1.58 for RESCO Tender

The recent tender floated by Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL) for the development of 35 MW of grid-connected rooftop solar under RESCO model saw bids as low as ₹ 1.58, lower than the previous ₹ 2.59 bid that NTPC received for its 2GW project by ACME

Bumping the previous low of Rs 2.59 bid, the MPUVNL received an astonishing ₹ 1.58 for the development of 35 MW of grid-connected rooftop solar under RESCO model. Keep in mind though that unlike other bids,  the first year tariffs quoted in this auction will escalate by 3 percent per year over a period of 25 years. Even then, the signs are encouraging that the safeguard duty is not hurting as much as feared, so far.

The solar developers took the clarification from MPUVNL as a good sign, overbooked the tender over 300% on the financial bid opening day.

The clarification, given earlier, gave an adjusted figure of 5.2% over and above the tariff. According to MPUVNL official statement, this adjustment in tariff is because of change in capital cost and will be given until three months prior to the scheduled commissioning date of the project as provided in the PPA.

Previously, the auction held by the National Thermal Power Corporation (NTPC) to develop 2 GW of interstate transmission system (ISTS)-connected solar photovoltaic (PV) projects, Lowest tariff of Rs 2.59 /kWh was quoted by three companies and ACME won the L1.

Coming to the recent bids, here is the following list:

In MP’s 35 MW RESCO tender, Power Grid (PGCIL) has got a rate of ₹1.58 per unit.

Central government organizations (like IIT Indore, NLIU Bhopal, SPA Bhopal, Devas Bank Press, CPRI, National Judicial Academy) have got a rate of ₹1.67.

Amongst all State Government buildings, the lowest rate is for municipal bodies, which would get solar energy at ₹1.69.

Tariff of ₹1.74 has been discovered for medical colleges.

12 Government universities would get solar power at ₹1.91.

291 government colleges would get power at ₹2.21.

156 Police establishments all over the State would be supplied power at ₹2.33.

All government engineering colleges, ITIs and polytechnics (a total of 124 institutions) would get power at ₹2.35.

Now eyes are towards the Orissa high court’s SGD case hearing on 19 September, which would further bring clarity to the turbid waters of solar power projects in the future. The stay, till 19 September, if revoked will decide the scale of imports Indian companies could afford afterwards. The hike on the prices of about one-fifth may look small but the macroscopic implications of 25% safeguard duty may see solar developers pull out of the existing projects as small and medium scale level players do not have such deep pockets.

Till then it will remain a game of wait and watch.

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