LOIs awarded to winners of the 1.2 GW Jharkhand Solar auction

In one of our earlier March stories, we already covered the high tariff bids in the tribal state of Jharkhand. The major concern highlighted was the uncertainty in getting land for solar project, as Jharkhand is majorly a tribal state. The next reason for the high bid in our view, is the bad health of the distribution utility which buys power from these solar projects. The state had put tenders for two categories of solar projects – below 25 MW and 25-500 MW. In a recent news, letters of intent were awarded to the winners of projects of more than 25MW capacity by the Jharkhand state.

This is a very good news for the state which had put solar reverse auction for 1.2 GW. The major winners of the solar auctions were Renew Power and Suzlon Energy. SunEdison, OPG and Acme were the other major winners in these solar auctions.

All the state needs now is to get the purchase power agreements signed successfully. Smaller projects of size up to 25 MW capacity, received bids ranging from ~ INR 5.3-8/kWh, while larger ones above 25-500 MW received bids in the range of INR 5-5.5/kWh.

The national solar installation target for 2016 is 2 GW and 2017 is 12 GW. By January 2016, India had already crossed the 5 GW solar capacity installation number, with Rajasthan being the no.1 state with more than 1.2 GW of installations. In sharp contrast, Jharkhand’s installed capacity was just 16 MW as of January 2016. The state did not make any progress in terms of solar installations, in the six months from May 2015 till January 2016. It ranked 13^th amongst Indian states who have installed solar capacity. The state ranks No.1 in capacity installations below 50 MW, with Kerala and Haryana following closely.

State wise Solar Capacity Installed till January 2016

 Source: MNRE

This shows that the state has been relatively backward when it comes to solar installations. In fact most of the eastern states have remained slow on the solar front, when compared to the western states of India. According to the Solar R&D division of MNRE, Jharkhand has the potential to install ~18 GW of solar capacity out of India’s total of ~749 GW. This shows that the state has a long road ahead. While this 1.2 GW auction looks like a definitely positive step towards it, the state needs to further focus on its targets. An expedition in this case would definitely boost the confidence in this state.