The recent result of the Solar Energy Corporation of India's (SECI's) firm and dispatchable renewable energy (FDRE) tender has caused a stir in the solar energy market, with tariffs discovered at Rs 4.98 to Rs 4.99 per unit for a 630 megawatt (MW) capacity. This capacity was awarded to Vena Energy, Hero Future Energies, Hexa Climate, JSW Energy, and Serentica Renewables, with JSW Energy securing 230 MW at a tariff of Rs 4.98 per unit, while the other four companies were awarded 100 MW each. Sehul Bhatt, Director of Research at CRISIL Market Intelligence and Analytics, noted that the discovered tariff of Rs 4.98 per unit in SECI?s FDRE Tranche IV is the lowest seen for such SECI projects to date. However, he pointed out that the prices for SECI-related projects are not directly comparable with other FDRE projects allocated by SJVN, NHPC, and NTPC, which have seen lower tariffs of Rs 4.38, Rs 4.55, and Rs 4.69 per unit, respectively. Bhatt explained that this difference is due to the focus of these tenders. While SECI projects emphasise a demand fulfilment ratio (DFR) of 80% to 90% monthly, other projects aim to guarantee peak power supply availability for four hours. He also mentioned that the tariffs in the second allocation of SECI's FDRE Tranche IV decreased by Rs 0.60 per unit to Rs 4.98 per unit, compared to Rs 5.60 per unit in Tranche II of 1,500 MW. This reduction was attributed to the decrease in the DFR from 90% to 80%, making it challenging for developers to achieve a 90% DFR at tariffs below Rs 5 per unit. Additionally, green power prices during peak hours in the Green Day Ahead Market have exceeded Rs 5 per unit. Consequently, the reduction in DFR led to an increase in participation, rising to 50% in Tranche IV from 32% in Tranche II. An official, speaking anonymously to ETEnergyWorld, remarked that the 80% demand fulfilment ratio is sufficient to replace new thermal power plants, with green power derived from a mix of solar, wind, and battery storage. Unlike thermal power, which has both fixed and variable tariff components, the tariff in this case remains constant for 25 years. The official also highlighted that this tender is unique as it follows the demand curve specified by the buyer, unlike other tenders that do not align with the demand curve. The buyer will receive green power starting 24 months from now, at a fixed tariff for 25 years, with SECI having four more tenders in the pipeline. Amit Kumar, Partner and Climate and Energy Ecosystem Leader at Grant Thornton Bharat, added that in FDRE bids under the utility PPA market, the demand profile of the buying entity is crucial in determining the tariff, given that most bid parameters are similar across FDRE bids floated by SECI, NTPC, and others. He also noted that the recent discovery of Rs 4.89 per kWh had similar conditions to SECI?s Tranche II FDRE bid, where the tariff was Rs 5.60 per kWh in March 2024, indicating a decrease of approximately Rs 0.70 per kWh in just five months.