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Latest 1.2 GW solar capacity awarded at Rs 2.54/kWh
The latest 1.2 GW solar auction conducted by Solar Energy Corporation of India (SECI) saw lowest winning tariffs (Rs 2.54/kWh) approaching the same level as in February auction (Rs 2.55/kWh). Four companies emerged winners at Rs 2.54/kWh, with Ayana Renewable Power, ReNew Power and Azure Power bagging 300 MW each and Mahindra Susten 250 MW. Avaada Energy claimed the remaining 50 MW at Rs 2.55. The tender had a tariff ceiling of Rs 2.65/kWh. In July last year, an auction by SECI saw ACME Solar winning 600 MW at a record low tariff of Rs 2.44 per unit. Before that, tariffs fell to Rs 2.44 per unit just once in May 2017 under the SECI auction for the Bhadla Solar Park. While the winning tariffs in the 1.2 GW auction are slightly up from the record low of Rs 2.44 reached last year, these are distinctly lower than upwards of Rs 2.70 in some of the recent tenders. One obvious reason is easing cost pressures due to safeguard duty rate falling to 20% from July 2019. “As the safeguard duty rate declines to 20% from July 2019, it would give developers who participate in auctions post January 2019 the leeway to procure when the rate is lower. The same would hold true when rates go down to 15% after January 30, 2020. Hence, over the long term, once duty rates decline, as they should in a time bound manner, cost pressures would ease and tariffs would also start easing by 5-10 paise per unit,” predicted a report by ratings agency Crisil Research published in pv magazine.