SBG Cleantech Ltd, a joint venture between SoftBank Group Corp., India’s Bharti Enterprises Ltd and Taiwan-based Foxconn Technology Group, has bagged a 350-megawatt (MW) solar power project in Andhra Pradesh after it matched the record low bid seen in the previous round.
SBG Cleantech won the project, under the Jawaharlal Nehru National Solar Mission (NSM), at a bid of Rs.4.63 per kilowatt-hour (kWh), according to people familiar with the bids.
India’s solar power tariff touched a record-low of Rs.4.63 last month when US-based SunEdison Inc. won a 500MW tender put out by state-run NTPC Ltd in Andhra Pradesh under NSM. SBG Cleantech lost the project as it bid higher at Rs.4.80 per kWh.
This is the first renewable energy project that SBG Cleantech Ltd has won in India. The venture was set up in June after SoftBank Corp.’s Masayoshi Son pledged to invest least $20 billion in solar energy projects in India.
An email sent to SBG Cleantech was not immediately answered.
The entire 350MW capacity is meant for a single project inside the solar park developed by NTPC, which will also be the buyer of the power produced from the plant.
The auction which concluded late on Monday night also saw Yarrow Infrastructure Ltd, a part of IndiaBulls group, bid at Rs.4.64, while Azure Power India Pvt. Ltd bid at Rs.4.76 and Reliance CleanGen Ltd bid at Rs.4.88.
Other bidders, who quoted a tariff above Rs.5 per kWh included Goldman Sachs-backed ReNew Solar Power Pvt. Ltd, China’s Trina Solar’s unit Mira Zavas Pvt. Ltd, and Marikal Solar Parks Pvt. Ltd, a unit of American photovoltaic module maker First Solar Inc.
“SoftBank is surely establishing itself as a serious and competitive player in the market. The company is likely to be a strong contender in the upcoming national bids as well,” said Jasmeet Khurana, associate director—consulting at Bridge to India, a boutique consulting firm.
Recent bids show that there are only about 10 to 12 developers who have the appetite to continuously try and take up large projects at current tariff levels, Khurana said.
Some expect the upcoming auction at Rajasthan—to be held later this year for a capacity of 420MW—to see more aggressive bids.
Some industry experts, however, have raised concerns over the viability of projects won at aggressive tariffs.
“This raises questions on the long-term viability. The advantages these companies (SunEdison and SoftBank) had in these two bids is that the plants would be at solar parks so they do not have to worry about setting up everything on their own. Also, NTPC is more bankable than any other state distribution companies,” said Bharat Bhushan Agrawal, senior analyst—India solar at Bloomberg New Energy Finance.
SunEdison, the world’s largest renewable energy company, is also increasing focus on India, its second largest market after the US. China’s Trina Solar and Russia’s OAO Rosneft, Italy’s Enel Green Power are among other global companies looking to invest in the Indian solar market.
India has raised its 2022 solar energy target to 100 gigawatts (GW) from 20GW as part of the Narendra Modi-led National Democratic Alliance (NDA) government’s efforts to lower dependence on coal-fuelled electricity.
India has a $250 billion investment opportunity in the renewable energy sector, Piyush Goyal, minister for power, coal and renewable energy, said at Mint’s fifth energy conclave in New Delhi in September.
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This article was first published on Livemint.com
SoftBank, Bharti & Foxconn JV bags first major solar power project in India
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