The price of large scale solar power is still falling after companies such as SoftBank, Axis Energy Ventures India Private Limited, O2 Power, EDEN Renewables, and Avaada Energy were named the winners in a recent 2GW solar energy auction run by the Indian state-owned National Hydroelectric Power Corporation (NHPC).

The e-reverse auction was held last week with the bidder with the lowest tariff being awarded the project. Impressively, the tariff bids were 4.7% below the 2019 average with the lowest tariff of ₹2.55/kWh ($A0.052/kWh).

Bid for setting up 2000 MW of solar generation capacity was finalized by NHPC, a CPSU under the Ministry of Power, today at a competitive tariff of Rs. 2.55 /2.56 per unit. During lockdown we kept our interaction with stakeholders alive through… — R. K. Singh (@RajKSinghIndia) April 16, 2020

Four companies competing in the auction offered bids at this level, with Softbank walking away with 600MW of contracted solar, Axis Energy with 400MW, O2 Power with 380MW, and EDEN with 300MW.

The fifth company, Avaada Energry, placed bids for 600MW but was awarded only 320MW at a tariff of ₹2.56/kWh ($A0.053/kWh).

A total of 7 bidders competed in the e-reverse auction, which was oversubscribed to the tune of 3,140MW – as against the 2GW on offer.

NHPC conducted e-reverse Auction on 16.04.20 for 2000 MW Grid Connected Solar PV Project to be set up anywhere in India in presence of Sh. A.K Singh, CMD, NHPC & Sh. Y.K. Chaubey, Dir (Tech) during COVID19 lockdown. pic.twitter.com/Iq0JUPnEQ8 — NHPC Limited (@nhpcltd) April 16, 2020

All of the awarded projects are expected to come online in 2022, shielding the projects from the supply constraints on equipment and labour currently being caused by the lockdown resulting from the COVID-19 pandemic.

Similarly, the bidding and resulting awarded contracts represent what Bloomberg New Energy Finance describes as “an optimistic view of the cost of financing these projects, even as a slowdown in India’s economic growth is expected.”

This latest auction follows the September 2019 tender by NHPC which awarded another 2GW and which was again oversubscribed by 1.78GW. Nine developers submitted bids in the tender and, in January, the NHPC revised the minimum tariff payable to the projects to ₹2.78/kWh ($A0.057/kWh), up from the original ₹2.65 ($A0.054/kWh).

Very few restrictions were placed on the successful bids for this latest auction, with projects to be set up anywhere in India and modules to be imported from anywhere (as against those tenders which require local production).