According to solar consultancy Bridge to India, 5,300 MW of valid winning bids were cancelled in 2018. These included 2,400 MW out of a 3,000 MW solar auction held by Solar Corporation of India (SECI), an arm of the Ministry of New & Renewable Energy (MNRE), in July last year.
A month later, SECI endorsed only the lowest winning bid of Rs 2.44 per unit to set up 600 MW quoted by Acme Solar. Projects awarded at the auction to other winners, who had bid tariffs in the range of Rs 2.65 to Rs 2.71 per unit, were all cancelled.
According to calculations by MNRE, the weighted mean average of the tariffs in the cancelled 2400 MW auction had been Rs 2.70 per unit, while in the fresh one it was Rs 2.585 per unit – the difference amounting to a saving of Rs 55.2 crore for the government in a single year (on 1200 MW).
Since the power purchase agreements (PPAs) are signed for 25 years, the total saving would be Rs 1,380 crore.
Cancellation of auctions for renewable energy projects because of high bids has saved central and state governments Rs 3,405 crore. Although companies have sharply criticized the practice as anti-investor.
“It is important to go for a rebid if the prices are higher than expected. It is the duty of the ministry to see that the government purchases power at the right rate. Enough and more power is being generated, so the price also should be fair,” MNRE secretary Anand Kumar said.
Reference- Economic Times, SECI website