A major coal mining company in India has issued a tender to develop solar power projects worth 150 megawatts of capacity. The tender will be awarded for engineering, procurement, and commissioning work, in addition to 10 years of operations and maintenance contract.
Singareni Collieries Company Limited (SCCL) is among the largest coal mining companies in India after the behemoth Coal India Limited. SCCL is predominantly operational in the state of Telangana in southern India, and claims to own reserves of 9 billion tonnes of coal.
The company is planning to set up 150 megawatts (AC) of solar power projects across Telangana in order to meet its green energy goals. It has thus contracted services of the Solar Energy Corporation of India (SECI) to host this auction on its behalf. The bids will thus be adjudged on a per megawatt basis, i.e. cost of the erection and maintenance of the projects.
The auction comes months after the company announced plans to set up a total of 550 megawatts of solar power capacity. The company had estimated the cost of development of this capacity at around Rs 2,475 crore ($360 million), with annual savings of Rs 24 crore ($3.50 million).
The 150 megawatts of capacity will be spread across five sites, with the capacity of each project varying from 10 megawatts to 50 megawatts. The auction is open only for Indian companies, which includes Indian subsidiaries of foreign companies.
The tender document does not mention how the power generated from these projects would be used. It is possible that SCCL would use this power for captive use, or enter power purchase agreements with willing buyers at a later stage.
The government of India had asked several public sector companies to take up solar power on a grand scale, and plan execution of large-scale solar power projects — either for self-consumption or to sell outside (especially in case of generators like NTPC Limited).
As a result, several public sector companies announced ambitious plans to set up solar power projects across the country. Some of the prominent ones include NTPC Limited (the largest generation company in India), Coal India Limited (the largest coal mining company in the world), Indian Railways (one of the largest rail companies in the world), NLC Limited (another coal mining company) and the Indian armed forces.
NLC Limited itself has issued several solar power tenders, and has also secured some large-scale execution contracts in the southern state of Tamil Nadu. Coal India Limited has announced an ambitious plan to set up 1,000 megawatts of solar power capacity. It has signed an agreement with the SECI to auction 200 megawatts of capacity on its behalf in the state of Madhya Pradesh.
Apart from the directions by the government of India, a number of these companies also have obligations to procure or set up solar as well as other renewable energy projects. The Renewable Purchase Obligation (RPO) requires these companies to procure a set minimum percentage of their power consumption from solar power projects. For generation companies like NTPC Limited, the government has introduced the Renewable Generation Obligation that ties a minimum percentage of solar power capacity development with installation of thermal power projects.