India Halves The Capacity Offered In Largest Solar-Wind Hybrid Tender

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Concerns over India’s capacity to execute large-scale auctions in the solar and wind energy sectors continue to grow as another tender witnessed a reduction in capacity on offer.

The Solar Energy Corporation of India (SECI) has reportedly reduced the capacity on offer in the country’s largest solar-wind hybrid tender. The initial capacity offered in the tender was set at 2.5 gigawatts, which has now been reduced to 1.2 gigawatts. The development has been reported by Mercom India, claiming that SECI has issued an amendment to the initial tender documents, however, such an amendment is yet to be reflected on the SECI website. 

Significantly, there are a few more changes to the clauses of the tender. The maximum tariff bid allowed has been reduced from Rs 2.93/kWh (¢4.0/kWh) to Rs 2.60/kWh (¢3.5/kWh). Also, developers shall now be required to complete the project within 18 months from the date of signing the power purchase agreement. Initially, developers were given 18 months from the date of issuance of letter of award to complete the projects. The annual effective capacity utilization factor, or CUF, has also been reduced from the earlier 40% to 30%. Project developers will be free to select the site for setting up the solar and wind energy projects.

The minimum share of an individual technology (solar or wind) for the project to qualify as ‘hybrid’ remains the same at 25%. The maximum capacity a single company or a group of affiliate companies can bid for has been reduced from 600 megawatts to 500 megawatts, while the minimum bid remains 200 megawatts.

This is the first tranche of hybrid solar-wind tenders issued by the SECI. It is unclear at this time how much cumulative capacity SECI plans to offer through such tenders in the future. Recently, India’s largest power generation company, NTPC Limited, also issued a tender to set up 190 megawatts of solar-wind hybrid project in the state of Karnataka.

This is not the first time that SECI has reduced the capacity on offer in a large tender. SECI was forced to reduce capacity on offer in the largest-ever wind energy tender of 2 gigawatts down to 1.2 gigawatts due to low interest by project developers. Adequate transmission capacity to absorb this capacity has been a concern among the project developers for quite some time. Fate of a planned 2.5 gigawatt wind energy tender by SECI remains uncertain at present.