Business News/ Industry / Energy/  Adani bids for entire 6.4GW solar tender

The Adani Group has bid for the entire 6.4 gigawatts (GW) capacity aimed at powering the farms of Andhra Pradesh as part of India’s largest solar tender, said two people aware of the development.

The other bidders are Andhra Pradesh-based Sri Sai for 5.8GW, NTPC Ltd (1.8GW), Torrent Power Ltd (300MW) and HES-SSISPL (600MW). Bidders had until Tuesday to submit their offers.

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The tender comes against the backdrop of India’s solar tariffs falling to a record low of 1.99 per unit at an auction conducted by Gujarat Urja Vikas Nigam Ltd in December. The rates are expected to decline further due to lower cost of financing and investors being flush with capital. A reverse bid auction will be held by the Andhra Pradesh Green Energy Corp. Ltd, the nodal agency, with these projects requiring an investment of around 25,600 crore.

“Bids for a total of 14.9GW have been submitted in response to 6.4GW on offer. While Adani Group has placed bids for the entire 6.4GW capacity, Sri Sai has placed bids for 5.8GW. NTPC, HES-SSISPL and Torrent have placed bids for 1.8GW, 600MW and 300MW, respectively. A pre-bid meeting was called on 22 December," one of the two people cited above said, requesting anonymity.

Queries emailed to the spokespersons of Adani Group, Torrent Power and NTPC Ltd late on Tuesday remained unanswered. Sri Sai and HES-SSISPL could not be contacted.

The Financial Express reported on Wednesday about the Adani Group, Torrent Power and NTPC being among the bidders.

The Y.S. Jagan Mohan Reddy-led Andhra Pradesh government’s previous plan was to float a tender for setting up 10GW capacity. The state has 7.7GW of solar and wind projects, with investments of around 60,000 crore.

Adani Green Energy Ltd (AGEL) has a renewable portfolio of more than 14.19 GW, of which 2.95GW is operational. NTPC, one of the world’s biggest thermal power producers, has mapped up an aggressive playbook for the green energy sector. NTPC and Torrent Power were among firms that bid the lowest solar tariff of 1.99 per unit in Gujarat.

NTPC, India’s largest power generation utility, has already decided against building new coal-fuelled power projects. It is also looking to buy at least 1GW of operational solar power projects as part of its strategy to have a 32GW clean energy portfolio by 2032. It has 1GW of operational clean energy capacity with an additional 3GW in the pipeline, and plans to add at least 5GW solar capacity in two years.

Interestingly, Andhra Pradesh has called these bids even as 5.2GW of solar and wind projects are hanging fire due to the state’s controversial move to reopen renewable energy deals signed by the previous N. Chandrababu Naidu government.

Criticism came from the Indian, French, Canadian and Japanese governments, as well as global investors, after state discoms reduced the contractually approved tariff under the power purchase agreement (PPA) to 2.44 per unit for solar projects and 2.43 per unit for wind projects in July 2019. These new tariffs have been legally challenged by the developers. Renegotiating auctioned tariffs could hurt India’s ability to attract global investors and also damage the sanctity of India’s tendering process at a time the country is running the world’s largest green energy programme.

“What Andhra (Pradesh) has done has hit our credibility internationally, and all the investment which is coming was hit," power and new and renewable energy minister Raj Kumar Singh said in a recent interview.

India has been trying to rejig its energy mix in favour of green energy sources and has become one of the top renewable energy producers globally, with a plan to achieve 175GW by 2022 and 450GW by 2030 as part of its climate commitments. Of this, while 89GW has been installed, 48GW is under implementation, and another 26GW is being bid out.

Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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Updated: 31 Dec 2020, 06:13 AM IST
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