December 24

Azure power qualifies for technical round, government discussing tariff

New Delhi: The government is negotiating tariffs with New York-listed Azure Power, the only developer that responded positively to the manufacturing-linked solar tender.

Solar Energy Corporation of India(SECI) floated a 10 GW solar tender in May, linked with 5 GW manufacturing capacity, which was later brought down to 3 GW. While most large players opposed the concept of the tender, Azure submitted bids for setting up 2,000 MW power project combined with 600 MW manufacturing of solar components last month.

While Azure Power has qualified the technical round, the government is trying to negotiate the tariff, asking the company to bring down the tariff it quoted in the technical round, multiple officials aware of developments told ET.

This brings focus back to the government seeking to reduce tariffs for solar projects that have already become cheaper than thermal.

“Azure has qualified the technical round. But we are still in the process of awarding capacity. Since they are sole bidders, they should not be given the advantage of winning at the tariff they submitted,” said an official asking not to be named.

The authorities are assuming that Azure would have quoted a tariff of Rs 2.85 per unit—the maximum permissible tariff under the tender. E-reverse auction, which allows the market to compete and reduce the tariffs, is not an option in the absence of multiple players. Azure Power chief executive Inderpreet Wadhwa refused to comment as the bid is still under evaluation.

A SECI official told ET the final decision will depend on the discretion of the authority. “Since this is a single tender, it (the tariff) has to be negotiated. Generally, it’s left to our discretion. Usually it’s not negotiated because the market takes care of the tariffs,” the official said.

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