Even developers who received bids to install 184 MW solar projects at the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) Phase 4 reverse auction in February 2020 are still waiting for it to release LoIs from them and sign PPAs, more than 12 months from the day of the auction, the agency continues to write to them, stating that as the tariffs from the auction were found to be too high, the finance department objected, as a result, the bids are now obsolete.
This follows the National Solar Energy Federation of India (NSEFI), an umbrella organization for solar energy partners in India, writing a scathing letter to Prime Minister Yogi Adityanath last week, in which he said delays had raised questions about the implementation of these projects, as installation costs have risen sharply since. there. It has also been pointed out that private actors, who previously had major investment plans in government, are now stopping bidding on projects, considering issues facing the complexity of law enforcement.
Speaking to FE, an official from the Department of Energy said, on condition of anonymity that the application was out of date. “All applications have time to be valid and, in this case, expired without renewal,” he said, adding that bids of Rs 3.17 / unit were allowed to expire as it was considered too expensive.
“Last week, UPNEDA successfully completed and re-issued LoIs with the historically lowest prices ever received at UP, of Rs 2.68 / unit and Rs 2.69 / unit projects of 200 MW capacity. When we get lower prices, we work faster. Old bids were allowed to expire because otherwise consumers would have to bear the burden of the prices obtained, which were very high at Rs 3.17 / unit. This decision is based on financial wisdom, ”he said, adding that since UP discs are not so good, getting expensive power could be suicidal. “As the cost of purchasing power is very high in UP compared to other provinces,” he said.
According to the official, over the past six months, UPNEDA officials have tried to convince the Treasury that the tax of Rs 3.17 / unit is the best solar price that UP can receive, but the finance department is uncertain and has indicated that other regions such as Gujarat and Rajasthan have lower prices. for Rs 2 / unit.
Acknowledging that there had been a delay in notifying solar developers at the end of the day, he said this was due to Covid-19, adding that they were in the process of issuing a notice to developers of development in a few days.
Giving details of the lowest prices obtained last week, the official said UPNEDA had invited RFPs to upgrade the 275 MW solar power plant in March this year, when two manufacturers were selected to plant 200 MW of plants in three locations. “On May 17, we issued LoIs to SJVN for the establishment of a 75 MW solar plant at Rs 2.68 / unit in Orai, Jalaun district, while the REC Power Distribution Company will establish a 75 MW plant at Rs 2.69 / unit in Jalaun District with another 50 MW plant at Rs 2.69 / unit in Kanpur Dehat district.
Speaking to the FE, NSEFI chief executive Subrahmanyam Pulipaka said the regulatory framework and stability of the policy, or the way the decision-making process is when it comes to renewable energy or power as a whole, is completely different from the UP region.
“Because of its population and its demand for electricity, the UP has great power and many people have a desire to pursue solar energy as an alternative, both private and public. But the current ecosystem confirms that it does not. If the state wants to attract foreign investors, then it must reduce the risk of investing in government. At the moment when it removes all barriers to the system, UP can also get good investment and good prices, ”he said, adding that in addition to land and resources, the framework and policy and reg problems are also very important.
Source: Financial Express