A clutch of solar projects not built with a combined capacity of 18,000 MW faces bad prospects for government discos that increase cold feet in purchasing power for these projects, at prices available below auctions. The reluctance of discoms to sign power supply agreements with these projects, with a combined investment of Rs 90,000-Rs 1 lakh crore, is due to the growing difference between the price of energy from these projects and the lowest prices available under recent auctions.

While at least eight companies have been hit by a state of discoms, Azure Power is the first to publicly admit it. “Solar Energy Corporation of India (SECI) has informed us that so far there has not been enough response from government power discs so that SECI can sign PSAs now despite having a letter of award,” the company said in a statement last week.


Adani Power, ReNew, SB Energy (SoftBank), Amp Green, Ayana (CDC Group), IB Vogt Singapore and Avikiran (Enel) were also affected by the situation. of discoms.

According to data compiled by the Central Electricity Authority, the state-owned coordinator could not sign PSAs for any state discom with 6,000 MW of solar projects, at 13,816 MW, built under. This is in addition to the 12,000 MW capacity that will be built under the solar-linked solar system, which is currently free.

Azure Renewable Energy is part of a project presented at the auction of a solar-powered production scheme held in January, where Adani Green Energy will build a production capacity of 8,000 MW and Azure will build 4,000 MW and power at Rs 2.92 / unit. Compare this price with the Rs 1.99 / unit tariff tax, obtained under the latest auction held earlier this month, and the reluctance of discoms to register seems reasonable from their point of view. 

As part of the agreement, the two companies will also build 3,000 MW of solar power generation in the country (Adani 2 GW and Azure 1 GW).

SECI became the national coordinator of renewable energy agreements that signed power purchase agreements (PPAs) with winning developers at competitive auctions and subsequently placed PSAs in the provinces to supply electricity to these plants.

To address this issue, the government planned to mobilize 3000 MW in production-related capacity and other solar projects offered at auction in February and June to curb disco explosions. Since the February and June auctions received lower prices of Rs 2.5 / unit and Rs 2.36 / unit respectively, consolidated taxes have been seen to decline to approximately Rs 2.66 / unit.

The price of independent solar panels has already plummeted to a very low level of Rs 1.99 / unit, driven by low interest rates, falling solar panels, improved technology and guaranteed purchasing power. Foreign-funded companies, eager to present themselves as players working in the solar market in the Indian market, have used their access to cheap capital and have been angrily quoting contracts.

A 13% decrease in solar module prices since last year has also contributed to lower prices. “We expect a reduction in the price of the auction (January), which will assist in the signing of PSAs,” said Azure Power.

“The PPA signing process is underway so we expect the first 2000 (MW) to be made soon,” said Robbie Singh, CFO of Adani Group, in November while answering analysts asking about the status of the production-linked tender. “Another 6,000 (MW) is in progress because the SECI needs to have international agreements,” Singh said. Questions about this matter sent to Adani Group were not answered until the time of publication.

Source:- Financial Express