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Madhya Pradesh Power Trading Company recently released the list of guidelines for project developers planning to setup solar PV projects in the state (available here). Prior to this announcement, the state had come up with policies for only two other RE sources – small hydro and biomass, both of which were announced last year.

Keeping up the tradition with other state policies such as Rajasthan and Karnataka, the state plans to allocate 200 MW of solar PV power to developers through reverse bidding process. The minimum capacity for each project coming up under the scheme would be 5 MW. The other guidelines with regards to the technology requirements, bank guarantees required etc. are similar to those being followed under the Rajasthan solar policy as well as the JNNSM. Should developers still require clarifications with regards to the document, a pre-bid meeting is scheduled to be held on 16.01.2012 at 15.30 Hrs. The eligible bidders however are requested to send their queries on or before 17.30 Hrs. on 07.01.2012.

The tender document was scheduled to be available on the MPTRADECO website. However, currently it remains unaccessible. Attempting to download the document results in message that states that the document is under revision.

Madhya Pradesh, which currently has no installed solar PV capacity should see a huge spike in the installed capacity thanks to this annoucement. With the JNNSM bearing witness to record low average tariffs of Rs. 8.77 per kWh, the results of this round of bidding should provide significant insight to the cost of solar power in India and whether the cost of production in India has actually fallen to these levels. The fact that solar irradiation levels in the state are comparable to other high resource regions (such as Rajasthan) should help realise lower tariff rates.

The reverse bidding process is expected to coincide with the similar process being undertaken under the Rajasthan state policy. With both states vying for developer attention it remains to be seen which of the two states will emerge the winner. Nevertheless solar PV in India would emerge the ultimate winner as such policy announcements would encourage other states with similar potential such as Tamil Nadu, Orissa etc. to come up with their own policy.

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