Leading Indian independent solar power producer Azure Power has signed a letter of award for a 300-MW Interstate Transmission System grid connected solar PV project it won at auction run by NTPC Limited.
Azure Power will provide electricity to NTPC at a tariff of 2.59 rupees (US$0.036) per kWh for 25 years.
Under the terms of the agreement, the solar project can be located anywhere in India, although the project is likely to be located near a solar park. It is expected that the PV project will be completed in early 2021.
Industry experts have expressed concerns about the profitability of the project given the depreciating rupee and India’s imposition of a safeguarding duty on Chinese and Malaysian solar products.
In September, Azure Power bid for 250 MW at an auction held in Gujarat State at 3.06 rupees (US$0.042) per kWh.
The auction was held for a second time after organiser Gujarat Urja Vikas Nigam Ltd cancelled the first attempt, claiming the tariffs were too high.
Azure Power then agreed on a 2.45 rupee (US$0.034) per kWh tariff for 100 MW.
Meanwhile, the second attempt at the auction saw the withdrawal of Acme Solar, which had negotiated a record low tariff for India of 2.44 rupees (US$0.033) per kWh in Rajasthan in July, giving rise to fears that such low tariffs are now unprofitable given the collapse of the rupee.
India’s solar ambitions are also being slowed by other factors such as the imposition of tariff ceilings and defaulted payments from cash-strapped state distribution companies.
Furthermore, the ability of Indian grids to cope with more solar and the related unwillingness of utilities to sign power purchase agreements are also hindering solar development.
Founded in 2008 and headquartered in Delhi, Azure Power’s pan-Indian portfolio comprises more than 3,000 MW.
The firm has been a trailblazer in India’s solar sector constructing the nation’s first private utility scale solar PV power plant in 2009.
Meanwhile the company also implemented the country’s first MW scale rooftop project in 2013 and now possesses a rooftop portfolio of 190 MW across 23 states.
Azure Power is also the first Indian power company to list on the US stock exchange and also issued the country’s first solar green bond.