Economy

SoftBank Energy cartelised to jack up solar tariffs: Minister

Twesh Mishra New Delhi | Updated on September 17, 2018 Published on September 14, 2018

RK Singh, Minister of State (I/C), Power, New & Renewable Energy

RK Singh writes to PMO over 3,000-MW auction held in July

The Union Ministry of Power has accused SoftBank (SB) Energy of attempting to cartelise and drive up solar power tariffs at the 3,000 MW solar auction in July.

In a letter to the Prime Minister’s Office, the NITI Aayog Vice-Chairman, and the Finance Minister, Minister of State (Independent Charge) for Power and New & Renewable Energy, RK Singh, said: “It is apparent that there was an attempt for cartelisation. Such a thing has never happened earlier.”

The Minister was responding to a query on the rejection of SB Energy’s bid. The Centre had rejected most bids that were called by the Solar Energy Corporation of India (SECI) for developing 3,000 MW of solar power generation projects earlier this year. This resulted in the first ever case of partially cancelling a tender for developing solar power generation projects. Thus, the winning bids for 2,400 MW of the 3,000 MW were cancelled. Only Acme Solar, which won a bid for 600 MW, by quoting the lowest tariff of ₹2.44 a unit, was awarded a project.

The bids that were rejected included SB Energy’s bid for developing 1,100 MW, and ReNew Power’s 500-MW bid. Both had quoted ₹2.71 a unit.

Mahindra Susten had bid for 250 MW of solar power generation capacity at ₹ 2.72 a unit in the 3000 MW mega solar auction conducted by SECI in July. The company was not allotted any capacity in the said tender.

Instead, Azure Power had bid for developing 300 MW of solar power generation capacity and was awarded at a bid price of ₹ 2.64 per unit.

The Centre had provided no reason for scrapping the bids. However, officials had hinted that the difference between the lowest winning bid and the others was unusually high.

“...Our suspicion is that SB Energy tried to form a cartel to push up the price. While in previous bids, the difference between the rates quoted between L-1 and the last bidder used to be not more than 10 paise per unit, in the present case the difference came to 27 paise per unit (₹2.71 - ₹2.44),” Singh wrote.

The letter, seen by BusinessLine, read, “In the bid to which SoftBank (SB) Energy is referring, the reverse auction took place on July 13, 2018. SB Energy was not L-1 in that bid (it was ACME Power at ₹2.44 per unit), it was not even L-2 and it was not even L-3. Even amongst three companies which came L-4 with tariff of ₹2.71 per unit, it was the last. Therefore, their disappointment that their bid has not been accepted is rather strange.”

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Published on September 14, 2018
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