Weekly Update: New allocations in India for the current financial year to reach 2.5 GW

Andhra Pradesh, Tamil Nadu, Uttar Pradesh and Punjab have all recently issued Letters of Interest (LOIs) after carrying out their respective processes for allocation of new solar PV projects. These allocations would cumulatively account for a capacity of almost 1.5 GW.

Andhra Pradesh is now looking to allocate a solar PV capacity of 350 MW and not 1000 MW, while Uttar Pradesh planned to allocate 200 MW but received bids for just 140 MW
Punjab allocates a total capacity of 268 MW for projects in the range of 1 MW to 4 MW and in the range 5 MW to 30 MW
All the new state and national level allocations being undertaken in the current financial year are expected to account for a capacity of around 2.4 GW.

Andhra Pradesh has offered a tariff of INR 6.49/kWh to developers after initially trying to offer projects based on a sub-station level bidding process (read our previous blog for our analysis on allocations in Andhra Pradesh). At this tariff, the state is now looking to allocate a capacity of 350 MW. Of this, seven companies with a capacity of 53 MW have unconditionally agreed to the terms and tariff and another 27 companies with a capacity of 297 MW have given their conditional acceptance. Some of the prominent developers who are looking to get projects in the state are Essel Mining and Infrastructure (35 MW), Kranthi Edifice (30 MW), Mahira Power Systems (20 MW), Premier Solar (two projects of 18 MW and 5 MW each) and SunBorne Energy (15 MW).

Uttar Pradesh had planned to allocate a capacity of 200 MW but bids have been received for just 140 MW. Of this, a project for 5 MW has been disqualified, leaving 135 MW for allocation. These projects are expected to sign a power purchase agreement (PPA) for a period of 10 years as compared to most other policies, where the term for the PPA is usually 25 years. Most developers are open to the shorter duration of the PPA as this would cover their loan repayment period and potentially allow them to sell the generated power at a rate higher than the current tariff beyond 2024 (read our previous blog for our analysis on allocations in Uttar Pradesh). Some of the prominent developers looking to get projects in Uttar Pradesh are Essel Infra (50 MW), Moser Baer (20 MW), Sri Colonizers (20 MW), Azure Power (10 MW) and Jakson Power (10 MW).

Punjab has been planning to allocate a capacity of 300 MW. The plan has been to allocate the projects in two categories, i.e., category one for project capacities from 1 MW to 4 MW and category two for project capacities from 5 MW to 30 MW (read our previous blog for our analysis on allocations in Punjab). For category one, after receiving the bids, the state is now looking to allocate a capacity of 68 MW to 22 projects and for category two, the state is now looking to allocate a capacity of 200 MW to eight projects. Prominent developers hoping to formalize a PPA in Punjab are Welspun (30 MW and 2 MW), Azure (30 MW and 2 MW), Essel Infraprojects (30 MW), Moser Baer (30 MW), SolaireDirect (20 MW) and Punj Llyod (20 MW).

BRIDGE TO INDIA has covered the allocations for 690 MW in Tamil Nadu in the last weekly update (refer). We would like to issue a clarification with regards to this update. We had mentioned that this capacity of 690 MW also includes the new interests received from developers who had not participated in the bidding process. However, this capacity of 690 MW is only from the developers who had earlier participated in the bidding process and any new interests would account for a capacity over and above the said capacity. Prominent developers hoping to formalize a PPA in Tamil Nadu are Mohan Breweries (110 MW), United Telecom (100 MW) and Welspun (60 MW).

Apart from this, Rajasthan has recently allocated 75 MW and Karnataka is also in the process of allocating 130 MW. Allocation for a capacity of 750 MW is also expected under the National Solar Mission (NSM) and the process for these allocations is expected to begin in July 2013. All the new state and national level allocations that are being undertaken in the current financial year (April 2013- March 2014) are expected to account for a capacity of around 2.4 GW.

This post is an excerpt from this week’s INDIA SOLAR WEEKLY MARKET UPDATE. Sign up to our mailing list to receive these updates every week.

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