India Inc India Inc: Wednesday, 05 August 2015 14:09

Auction drives down costs of solar power in India

The Indian government’s goal to make solar a viable and affordable alternative to conventional sources of power has edged a little closer.

The country’s biggest auction for solar energy yet drove down prices further this week, with companies such as Toronto-based SkyPower and US-based SunEdison competing with local firms.

Acme Cleantech Solutions and Mytrah Energy emerged as the top winners in bids to build 2,000 megawatts (MW) of solar farms in the southern Indian state of Telangana. Together, they clocked up 763MW of contracts.

The move marks a major boost for India’s ambitious plans to install 100 gigawatts (GW) of solar capacity by 2022 to re-balance the country’s power generation from coal-based and renewable sources. The country currently has 4GW of solar capacity.

Overseas developers entering the Indian market are reducing the cost of solar farms, forcing local companies to lower the rates they seek.

Acme Cleantech Solutions founder Manoj Kumar Upadhyay explained: "Global competition is keeping us on our toes for profitability.

“After winning more than 22 per cent of the total capacity auctioned, we have emerged as the largest solar power player in distributed power generation.

“We have also become India’s largest and only solar power developer with a portfolio of more than 1,000 MW solar projects. Our plan is that by December 2016, we should be a 2GW company.”

His firm won contracts to build 436MW of projects, while Mytrah sealed a deal for 327MW in the latest auction round. The projects are to start within 12 months under the terms of the deal and will come up at 18 different sites across the state.

Telangana had floated tenders for 2GW of projects and received bids from 101 developers at the auction, according to solar market intelligence firm Bridge to India.

Other prominent developers who joined in the bidding process for the auction this week included Adani Power, Reliance Power, Suzlon Energy, Shapoorji Pallonji, Hero Future Energies and Fonroche Energie SAS.

Canada’s SkyPower won a contract to develop a 200MW solar farm, having reportedly submitted the lowest bid.

Neighbouring Andhra Pradesh had recently announced Japanese telecom and Internet giant Softbank’s plans to set up a 20 GW solar power plant. In addition to a solar power plant, Softbank has also proposed a manufacturing unit to produce solar panels under the ‘Make in India’ initiative in the state.

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