MNRE Asks SECI to Set Upper Ceiling for Solar Tariff at ₹2.50/kWh Without Safeguard Duty


MNRE Asks SECI to Set Upper Ceiling for Solar Tariff at ₹2.50/kWh Without Safeguard Duty

In a significant development, the Ministry of New and Renewable Energy (MNRE) has issued a letter (reviewed by Mercom) directing Solar Energy Corporation of India (SECI) to set the maximum permissible solar tariff at ₹2.50 (~$0.036)/kWh without safeguard duty and ₹2.68 (~$0.038)/kWh if safeguard duty is levied.

The letter from MNRE has been issued after the Minister of Power, Raj Kumar Singh, reviewed solar bids from NTPC’s 2 GW solar auction held on August 13, 2018, in which tariffs of ₹2.59-2.60 (~$0.037)/kWh were quoted inclusive of safeguard duty. MNRE has confirmed the issuance of this letter to Mercom.

In the letter, SECI has also been directed to set the future solar bids in lot sizes of 1,200 MW with no upper cap (maximum bid size) and minimum bid size is to be set at 50 MW. The tendered capacity was believed to be reduced as it was felt there wouldn’t be enough competition in bigger tenders.

The reason behind setting the lot sizes at 1,200 MW is to generate more competition as it has been observed that the recent large auctions (2 GW or more) have not generated sufficient interest or competitive tariffs to satisfy the government agencies.Read More

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