India Issues 1.5 Gigawatt Solar Tender With Mandatory Domestic Content Usage
Amidst poor response from project developers for several solar power tenders in the past few weeks, India has issued yet another solar power tender, this time with an obligation for project developers to use solar cells and modules manufactured in India.
The Solar Energy Corporation of India (SECI) has issued a tender offering 1.5 gigawatts of solar PV capacity. The tender is open only to companies owned by the central government. Developers can bid between project sizes of 1 megawatt to 1,500 megawatts.
Bidders can use the power generated from these power plants for self-consumption and cannot be sold to a non-government entity. This is a strict provision that is the basis of such tenders that mandate the use of Indian-made solar cells and modules.
The bidders shall have the option of setting up the power plants at any location across the country. These projects can be land-based, floating, canal-top or rooftop systems. Bidders can also ask the government for viability gap funding, i.e., support in capital cost expenditure up to US$0.1 million per megawatt.
This is the third such tender issued under the central public sector undertaking (CPSU) scheme. Following an unfavorable ruling at the World Trade Organisation (WTO) regarding its domestic content program, India set up a separate scheme aimed at government-owned entities. The total capacity addition planned under this scheme is 12 gigawatts by March 2023. With this latest tender the total capacity offered for auction has reached 4.5 gigawatts.
The first two tenders, however, have received poor responses from project developers. The first tender under this scheme was issued by the SECI and offered 2 gigawatt capacity. Only five companies submitted bids to set up projects in response to this tender. The largest of these bids came from power generation companies that have some prior experience in setting up solar power projects. The cumulative capacity bid for under this tender was just 1,068 megawatts, an undersubscription of 47%.
The second tender under this scheme was issued by NTPC Limited which offered 1 gigawatt of capacity. The project developers can bid for project sizes between 50 and 300 megawatts. The tender is likely to have received a poor response from the developers as its bid submission deadline has been extended twice already.
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