After the issuance of a letter inviting bidders to submit responses for a tariff of Rs.6.49/unit last month, APTRANSCO received responses for 350 MW as per the article on Business Line this Thursday. While the responses have been received for 350 MW, it is not the case that the 34 bidders who contributed to this number have accepted the price unconditionally. As per information available, only 7 bidders (contributing to 53 MW) seem to have accepted without any conditions. The remaining 297 MW from 27 bidders were accepted subject to conditions such as change in location, capacity and if possible, price too.
As per unconfirmed reports, Essel Mining and Industries Ltd. and Sunborne Energy Services India Pvt. Ltd. contributed to 40 MW out of the confirmed 53 MW. A German company (name not available) agreed to another 5 MW and rest of the 8 MW-odd capacity was accepted by 3-4 bidders in the 1-2 MW range. While many in the industry are still trying to figure out how a tariff of Rs.6.49/unit can work out even with scale benefits (i.e. size of 10 MW or more), it is surprising to know that a few bidders are ready to setup even as low as 1 or 2 MW for the same tariff.
Though rumours are abuzz that APTRANSCO might extend the tariff acceptance date by a month in order to receive more acceptances, official announcement is yet to be made. On the price revision issue though, it looks like it is highly improbable (though necessary for the bid process to be successful) at this point for the Govt. to revise the tariff due to 2 reasons:
Both the above reasons may be unacceptable to the more than 100 bidders (many of whom are first-time entrants to the domain) who had huge hopes of being part of this fledgling industry. While some may pursue legal recourse, some seem to be still trying to see if the tariff can work.
All in all, Tamil Nadu Solar bidding which was initially perceived as a disappointment seems to be in a far better position now with more than 690 MW tied up. In its blogpost last week, Chennai based company – RESolve – pointed out the various factors such as low tariff offered in AP and Rajasthan and the huge delays in the start of JNNSM phase-2 for the success of TN Solar bidding. Another important reason for TN Solar bidding success is the security the Govt. seems to be offering in the form of ESCROW account and LC to ensure timely payments. Similar comments are being heard from several others in the industry.
It might be a little more while before the complete picture about AP Solar bidding emerges. It may be too early too say whether it has been a Success or a Failure.
Keep checking our blog for more updates on AP Solar and all other happenings in the Solar Industry in India.
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