The Andhra Pradesh government has received the lowest bid of Rs 2.47/unit against tenders invited in December 2020 to build 6,400 mega-watt (MW) solar power capacity in the state. Adani Group, Torrent Power and state-run NTPC are learnt to be among the lowest bidders, with Adani itself offering the most competitive rates for 3,000 MW. However, since the Andhra Pradesh High Court has ordered the state government not to sign any contract regarding the auction until further hearings on the matter, the state will issue letters of award to the lowest bidders subject to the outcome of the case.
Tata Power had moved the HC seeking a stay on the auctions, claiming that the bid documents state that payment-related disputes for the plants will be taken up by the state government mechanisms instead of the electricity regulator, which is not legally tenable.
The lowest bid discovered in solar auctions so far was Rs 1.99/unit quoted for a clutch of Gujarat projects in December.
According to sources, state-run NTPC has quoted the lowest tariff for 600 MW, Torrent Power for 300 MW and civil contractor firm HES Infra placed the lowest bid for 300 MW. Kadapa-based transformer manufacturers and EPC contractor Shirdi Sai Electricals was the lowest bidder for 2,200 MW. The tariffs range between Rs 2.47/unit and Rs 2.58/unit.
The state had received robust response for the tender, with all bids received adding up to 14,900 MW, putting at rest speculation that the latest auction might come a cropper in the wake of a number of major developers refraining from participating in it, citing the state’s “poor track record”. The solar plants are slated to be built in the districts of Kurnool, Ananthapuramu, Prakasam and Kadapa. The state government had earlier started building a 1,000 MW solar park in Kadapa, through a joint venture with the Centre, but has not allotted lands or awarded contracts for work on the ground.
The state government had formed a committee to revise “abnormally priced” wind and solar power purchase agreements (PPAs) in July 2019, saying there might have been linked with “mala fide intentions”. The state had gone ahead with this plan despite the Centre’s advice that this could upset investor confidence in the sunrise sector. The Andhra Pradesh HC had struck down the state government order on renegotiating PPAs, and directed the discoms to pay more than 7,500 MW of wind and solar plants at a provisional rate of Rs 2.43 per unit — against the Rs 4.84 per unit tariff they were receiving earlier — till the legal disputes are resolved.