NSEFI Requests Uttar Pradesh to Honor Tariff Discovered in Recent Solar Auction

L1 tariff of ₹3.48/kWh was discovered in the recent 1 GW solar auction


The National Solar Energy Federation of India (NSEFI) has written to the energy minister of Uttar Pradesh to honor the tariffs discovered in the recently concluded 1,000 MW solar photovoltaic (PV) auction conducted by Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA).

In the letter, NSEFI has expressed apprehension that the government of Uttar Pradesh may not honor the bidding process due to comparisons of tariff discovered in the 1 GW auction with other auctions conducted across India.

NSEFI has requested the state’s energy minister to issue suitable directives to Uttar Pradesh Power Corporation Limited (UPPCL) to honor the tariff and the bidding process. NSEFI also stated that cancellation of the auction may set a bad precedent.

What’s surprising is that the letter has been written well in advance of any further communication from either UPNEDA or UPPCL to the successful bidders. And this is not the first time that NSEFI is trying to intervene in affairs of solar PV projects in Uttar Pradesh. In August 2017, NSEFI, through a letter,  had sought an extension of project commissioning timeline for six solar projects in Uttar Pradesh.

When contacted about the timeline for issue of letters of award (LoAs), a UPNEDA official said, “After the bidding concluded, we forwarded the results to the higher committee to make a final decision. It may take another 15 days or so.”

When asked if there were apprehensions regarding the tariffs quoted, the UPNEDA official chose not to comment.

Talking about the NSEFI letter, the UPNEDA official said, “Some organizations only see one side of the coin. In this case, NSEFI has historically taken the side of developers, they have previously asked for tariffs above ₹5 (~$0.073)/kWh. We are a government agency, we must see that the citizens are benefitted in the end. There’s nothing else to comment on this letter as of now.”

As quoted by another source of Mercom, “The UPNEDA officials had taken into consideration land availability issues, project sizes, low CUF and thought ₹3.10 (~$0.045)/kWh to ₹3.15 (~$0.046)/kWh would be a good tariff as the developers were being provided free transmission, but the L1 tariff of ₹3.48 (~$0.050)/kWh is way more than their expectations.”

“In the past, solar project power purchase agreements (PPAs) have been renegotiated in Uttar Pradesh. This may have prompted the NSEFI to write to the state’s Energy Minister,” said a top executive at one of the winners of the 1 GW auction.

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