Bihar Asks Developers to Reduce Tariff for 250 MW of Solar Projects

Sukhbir Agro and Avaada Energy recently emerged as the lowest bidders in the instant bidding process for this tender

September 25, 2019


The Bihar Electricity Regulatory Commission (BERC) has rejected a petition filed by Bihar State Power Holding Company (BSPHCL) on behalf of North Bihar Power Distribution Company (NBPDCL), and South Bihar Power Distribution Company (SBPDCL) for the adoption of tariff for solar projects.

The petition had requested the adoption of the tariff of ₹3.45 ($0.049)/kWh and the regulatory approval for the procurement of 250 MW of solar power. The Bihar Renewable Energy Development Agency (BREDA) was the respondent in this case.

In June 2019, BREDA had invited bids for setting up 250 MW of grid-connected ground-mounted solar projects in the state.

In the instant bidding process, Sukhbir Agro Energy had quoted a tariff of ₹3.58 ($0.051)/kWh for 50 MW capacity and Avaada Energy quoted ₹3.60 ($0.052)/kWh for 200 MW capacity. Further, Sukhbir Agro Energy offered to reduce its tariff bid to ₹3.45 ($0.05)/kWh and thereafter, the financial evaluation committee of BREDA recommended to consider the offer rate of the lowest bid (L1), asking the second-lowest bidder (L2) to match the rate for the balance capacity of 200 MW.

The commission after hearing the case deemed the tariff of ₹3.45 ($0.05)/kWh to be on the higher side and recommended that the tariff be renegotiated with the developers between the range of ₹3.05 ($0.043)/kWh to ₹3.15 ($0.044)/kWh considering that the projects are developed in Bihar.

The commission also suggested that in case the bidders and BREDA cannot arrive at a renegotiated tariff in the suggested range, then the instant bid process be canceled, and BREDA retender the projects.

Bihar’s electricity distribution companies are operating under stress to meet their renewable purchase obligation (RPO). In April 2019, DISCOMs in the state were penalized for not being able to meet RPO targets.

Last month, BREDA announced a tender for 4 MW of floating solar projects.

Bihar is one of the least developed states in the country and is yet to scale big on solar capacity. As of now, the state has only 110 MW of installed solar capacity with no project pipeline, according to Mercom’s India Solar Project Tracker.

Shaurya is a staff reporter at with experience working in the Indian solar energy industry for the past four years in various roles. Prior to joining Mercom, Shaurya worked with a renewable energy developer and a consulting company. Shaurya holds a Bachelors Degree in Business Management from Lancaster University in the United Kingdom.