NEW DELHI: The gloom and doom of the coronavirus pandemic has failed to dampen the spirit of India’s renewables sector, with Goldman Sachs-funded <!-- -->ReNew Power on Friday winning the world’s first tender for round-the-clock supply of green power by a margin of 1 paise after quoting a tariff of Rs 2.90 per unit, or roughly 4 cents. <br/>At today’s exchange rate of Rs 75.55 to a dollar, ReNew’s offer is just 1 cent more than the 3.5 cents, or Rs 2.44 per, unit discovered in May 2017 in Rajasthan’s Badhla solar park, which had stirred up the solar power market as the lowest in the world. <br/>It is also 124% cheaper than the peak tariff discovered in a February auction of renewable capacity with storage option, which also gave the assurance of continuous supply but was an expensive proposition when compared to coal-fired power. <br/>Compared to coal-fired power, Friday’s winning tariff, discovered through the reverse bidding process in state-run SECI’s auction for 400 MW capacity, is 35% cheaper than state-run NTPC’s average tariff for coal-fired power.

The offer works out between 25% and 72% cheaper than Rs 6 per unit or so discoms pay to buy power from the open market or peaking sources, mostly gas-fired plants, to meet demand.

The photo-finish indicates the intensity of competition and the sector’s resilience to the economic impact of pandemic. The reverse auction saw tariffs drop 19% from the lowest opening bid of Rs 3.59 per unit. Greenko bowed out at Rs 2.91 per unit. Ayana and HES Infra were the two other bidders.

At this tariff, the auction spells trouble for coal-fired plants, seen as the primary source of dependable power, by removing the barrier of intermittency associated with green power and addressing the affordability issue of solar-storage systems. The tender stipulates 24X7 supply of only green power, though a mix renewables – solar, wind, solar-storage or hydel – is allowed.

But thermal power producers said the levelized tariff would be Rs 3.60 per unit due to the provision of 3% escalation for 15 year provided by SECI and would fail to enthuse discoms reeling under severe funds crunch.

SECI executives countered saying thermal plants have escalation throughout their 25-year deemed life. They said the tender is also better in respect of capacity utilisation – set at a minimum 80% in a year or 70% monthly. This is way above the 55-60% capacity utilisation of coal-fired units, 25-30% for solar plants and 30-35% for wind energy farms.

The SECI auction also stand out because the bids were submitted on March 22, a day after the country had gone through the ‘janata (people’s) curfew’ and the coronavirus outbreak had already begun to tell on investor sentiment.

“This tender brings within reach renewables as a continuous source of power and allows India to plan giga watt-size projects,” a SECI executive said.

Indeed, it is the firm, dependable supply at an assured tariff from renewables that can raise hell for coal in the coming days. It provides discoms a financially viable alternative for meeting renewable energy obligation.

In addition, solar tariff is levelised for 25 years, while thermal power tariff is for 3-5 years and becomes costlier every time coal prices or freight rise.