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French company Solairedirect makes history, again

French company Solairedirect made the winning bid for 250 MW AP project.

CHENNAI, APRIL 12: French company Solairedirect, which won the rights to put up 250 MW of solar plants and sell power to NTPC Ltd at a record-low tariff of Rs. 3.15 a kWhr in the auction process that concluded on Tuesday, has created history in India for the second time.

On December 2, 2011, Solairedirect had hit the headlines by winning 5 MW of capacity rights by quoting a then record low tariff of Rs. 7.49 a kWhr – a tariff that was described as “sub 8 surprise”.

Solairedirect has since been acquired by the French utility, Engie. The 250 MW adds to its Indian solar portfolio of 450 MW, spread across Rajathan, Telangana, Punjab, Uttar Pradesh and Andhra Pradesh.

Solairedirect won the Kadapah project beating the second best bidder, the Actis-backed Ostro Energy, by just one paise. However, a look at all the bids shows how steeply solar tariffs have fallen.

Other bidders

The other bidders were Canadian Solar Energy (Rs 3.39), Greenko Energies (Rs 4.09), Azure Power (Rs 4.38), Mohoba Solar (Rs 4.54) and Mahindra Renewables (Rs 4.68).

That the highest quote was Rs. 4.68 tells a lot about the how steeply solar tariffs have fallen. In 2015, when the now-defunct SunEdison won 500 MW quoting Rs. 4.63, it was roundly criticised as a maverick bidder whose quote would serve only to kill the industry.

The rupee factor

Furthermore, the winning quote of Rs. 3.15 is considerably lower than the previous record of Rs. 3.29 seen in the Rewa auctions which closed on February 10. The appreciation of the rupee has aided the fall.

“The rupee on February 10 was Rs. 66.93 to a dollar, whereas on Tuesday it was Rs. 64.50, notes Balaraman Kapali, founder of the Chennai-based forex consultancy, Optimal Results. The decline of 3.6 per cent is a big advantage for solar companies that import modules.

“There is considerable fluctuation of the rupee-dollar exchange rate on both sides, and companies that are alert to the movement may either save on costs or raise sales realisation,” Kapali says.

India today has 12,288 MW of installed capacity of grid-connected solar power, of which 5,525 MW came in 2016-17.

Commenting on this Power Minister Piyush Goyal has tweeted, “Clean affordable power for all: Solar achieves another record low of Rs. 3.15/ unit (flat rate) during auction in Kadapa, AP by NTPC.”

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