Cancellation of renewable energy auctions helped govt save Rs 3,405 crore: MNRE Secy

A top official has reportedly said that the cancellation of renewable energy auctions because of high bids has saved Rs 3,405 crore of central and state governments. However, companies have condemned the practice as anti-investor.

MNRE secretary Anand Kumar speaking to ET said “It is important to go for a rebid if the prices are higher than expected, it is the duty of the ministry to see that the government purchases power at the right rate. Enough and more power is being generated, so the price also should be fair.”

Kumar differed views of the experts who believes that such cancellation are anti-investor and would make the 175 GW renewable energy target a difficult task to achieve.

According to Bridge to India last year 5,300 MW of valid winning bids were cancelled. These included 2,400 MW out of a 3,000 MW solar auction held by SECI in July last year.

In February this year, SECI floated tender for 1,200 MW of the cancelled 2,400 MW. However, the the winning bids varied this time between Rs 2.55 to Rs 2.61 per unit and were accepted.

Kumar speaking to the publication the as per the calculations done by his ministry, the weighted mean average of the tariffs in the cancelled 2400 MW auction had been Rs 2.70 per unit, while in the fresh one it was Rs 2.585 per unit – the difference amounting to a saving of Rs 55.2 crore for the government in a single year (on 1200 MW). He added since the PPAs are signed for 25 years, the total saving would be Rs 1,380 crore.

Kumar informed that the remaining 1200MW are expected to be auctioned sometime later this year.

The publication notes that last year UPNEDA’s solar auction for 1,000 MW was also canceled. Held in April, it attracted bids at between Rs 3.48 and Rs 3.55 per unit, which the state officials found too high, leading to it being called-off in July. UPNEDA later conducted two rounds of auctions of 500MW and 550MW respectively.

However, calculation done by MNRE shows that while in the cancelled auction, the weighted average tariff was Rs 3.53 per unit, the same in the two subsequent auctions taken together was Rs 3.125 per unit. This has meant a saving of Rs 81 crore per annum, or Rs 2,025 crore over 25 years, for the UP government.

In January this year Gujarat too cancelled 700 MW solar auction it had held in December 2018, where the weighted average of the winning tariffs was Rs 2.87 per unit.

Kumar said “When Gujarat holds the auction again, the lowest tariff is likely to be in the range of Rs 2.60 per unit. That’s where tariffs are at now. This will save the Gujarat government Rs 945 crore over a 25 year period.”


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