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Ceiling tariffs for auctions to continue, says MNRE Secretary

   December 5, 2018        358        Kaavya Chandrasekaran

The government will keep imposing a tariff ceiling on solar projectsRenewable Energy Secretary Anand Kumar said, rejecting the industry’s demand to allow them to bid at a price that companies find viable to enable higher participation.

Recent auctions for renewable projects conducted by the SolarCorporation of India (SECI), an arm of the Ministry of New and Renewable Energy (MNRE), have all had ‘ceiling tariffs’ above which bids are not entertained.

Developers have been protesting against these ceilings, maintaining they are too low and are thereby restricting auction participation, and in turn the growth of renewable energy in the country. MNRE Secretary Anand Kumar, however, speaking at a conference in Chennai on Tuesday, defended setting such tariffs and made it clear they would continue, though he was ready and willing to work out “a viable rate”.

Ceiling tariffs for auctions to continue, says MNRE Secretary
“Figuring out the likely tariff is not rocket science,” he said at a CII organised conference on “Green Power 2018”. “We know how much capital is required. We need to take into account the interests of the state utility (buying the power) and the common man. We will continue with location specific bids.”

He further said that his ministry was aware of the developers’ concerns and assured them the rates set would be fair. “If developers feel the upper cap is not viable, they should stay away from bidding,” he said. If indeed most developers stayed away, the government would consider revising the limit set. “We will revise the tariff and developers can bid again,” he said.

Developers were disappointed by the response. “There should be no upper cap,” said Ramesh Kymal, managing director, Siemens Gamesa Renewable Power, who also heads the CII’s Green Energy Committe. “Good quality land for setting up renewable projects is becoming increasingly hard to find and as land costs rise, tariffs are also bound to go up.”

Sunil Jain, CEO, Hero Future Energies, agreed. “Setting upper limits is incorrect,” he said at the subsequent panel discussion. “What is the government afraid of?”

Sources revealed that tariff ceilings at auctions were also discussed at a meeting between MNRE officials, developers and the Prime Minister’s Office last week. The developers had brought up the issue of tariff ceilings and claimed that it defeated the purpose of auctions.

ET Bureau