BENGALURU: Six months after it conducted a solar auction of 250 MW at the Kadapa Solar Park in Andhra Pradesh, NTPC has still not been able to find a buyer for the power the project will produce, people aware of the matter said.
All 250 MW at the April auction were won by SolaireDirect, a subsidiary of the French energy giant Engie, quoting a tariff of Rs 3.15 per kWh, which was a record low at the time.
But so far Engie has not even received a Letter of Award (LoA) from NTPC confirming that it had been allotted the project, sources said. Usually, the power purchase agreement (PPA) with the winner of an auction is signed within a validity period of two months after the auction.
But in this case, no PPA has yet been signed, and the validity period was recently extended for the third time – this time for a month – till mid-November, sources said.
Neither Engie nor NTPC responded to queries about the delay as of press time Monday.
Sources said the ministry of new and renewable energy (MNRE) is seized of the matter, more so because Engie is France’s biggest power utility, and France and India are key movers of International Solar Alliance (ISA). MNRE secretary Anand Kumar declined to comment on the development.
The problem has arisen because Andhra Pradesh discoms, which were expected to buy the power in the normal course, have declined to do so.
Though Engie’s tariff, quoted in April was the lowest then, two more solar auctions conducted by Solar Corporation of India at the Bhadla Solar Park in Rajasthan in May saw the winning tariffs fall further, first to Rs 2.63 and then to Rs2.44 per kwH.
As a ripple effect, Andhra Pradesh in July decided that solar power at Rs 3.15 per kWh was too high a tariff. Its nodal agency for renewable energy New and Renewable Energy Corporation of Andhra Pradesh (Nredcap) informed NTPC it was no longer interested in buying, but offered to waive transmission charges if NTPC got any other state to buy it. (ET, July 24)
Sources revealed that NTPC has held discussions with nodal renewable energy agencies of several other states to buy the power.
“States which have not yet embarked on a solar programme but need to fulfil their renewable purchase obligations (RPOs) could benefit from this project,” said one of the sources.
But no decision has been reached yet. And NTPC has failed to finalise a PPA notwithstanding its reputation and the quality of power it guarantees.
“Validity periods for signing PPAs have been extended by some states in the past, but rarely ever by NTPC,” said an industry insider. “Usually NTPC readily finds buyers. But the rapid and steep fall in solar tariffs seems to have unsettled the market.”
Engie currently has around 325.6 MW of commissioned solar projects in India and is building another 140 MW project at the Bhadla Solar Park.
During a visit to India in May this year, Engie CEO Isabelle Kocher had said her company intended to invest at least $1 billion in Indian solar projects over the next five years. (ET, May 31) But such hiccups could well lead to a rethink.
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