Indian Government’ Solar Project Receives Bidding from Inexperienced companies

India, a country that experiences nearly 300 sunny days a year, has recently called for biddings from solar power builders and chose 37 companies from the bidders. A recent analysis from Bloomberg New Energy Finance indicates a number of companies that bid for the projects have no previous experience and have quoted low biddings, which will make them struggle to earn their profit.

The largest projects quoted under the bidding were taken by companies such as KVK Energy Ventures, Lanco Infratech and Rajasthan Sun Technique, an entity of Reliance Power. The most prominent companies that could not win the bid include Acme Group, which is currently constructing a 10 MW solar power plant and Abengoa, which has constructed a number of plants in the U.S. and Spain. The auction granted a total of 470 MW solar thermal capacities and 150 MW of solar photovoltaic capability. The bidding process selected only those project developers who offered to sell the generated electricity at the cheapest rates. The lowest bid quoted for solar photovoltaic power generation was 10.95 rupees per kWh and for solar thermal it was 10.49 rupees. The bids offered nearly 30% discount on the proposed prices of the government. According to Alok Nigam, Vice President of Business Development in Lanco, his company did not worry on the returns and participated to get position in the National Solar Mission. He expressed his doubts about the continuance of the advertised tariff structure for a long period.

According to Deepak Gupta, New and Renewable Energy Ministry’s secretary, the companies were not judged on their technical expertise. Expressing confidence about reaching the target, he added that in order to ensure smoother continuance of the project and to stop fake bidders the companies were asked to pay bid bonds and were informed about the procedures of levying penalties for the delay or failure to execute the project.

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