India Announces Fresh Tender For 1.2 Gigawatts Of Solar

After a gap of several months, the Solar Energy Corporation of India (SECI) has issued a national-level tender to set up large-scale solar power projects.

SECI has issued the third tranche of tenders inviting project developers to set up large-scale solar power projects at any site of their choosing in the country. This time SECI will allocate 1.2 gigawatts of capacity, and has set a maximum allowed tariff bid of Rs 2.65/kWh (3.72¢/kWh), down from Rs 2.93/kWh (4.11¢/kWh) in the previous tender. 

The capacity on offer has also been reduced significantly, a likely result of the industry-wide problems being faced by project developers (like import duty on solar modules and cells, and imposition of Goods and Services Tax). The last similar tender had offered a capacity of 3 gigawatts, and was the largest solar power tender in the country.

Project developers would be able to bid for a minimum capacity of 50 megawatts, and in multiples of 10 megawatts thereafter, up to a maximum of 300 megawatts. A group of companies with the same ultimate parent shall be able to bid for a maximum cumulative capacity of 300 megawatts.

While the maximum tariff bid has been reduced by almost 10%, SECI has been lenient with the timelines for financial closure and project implementation. As per conditions of the latest tender, SECI shall allow 12 months for financial closure, compared to seven months in the last such tender. Deadline to fully commission the project has been increased from 15 months to 18 months, while the maximum allowable time to commission the project remains unchanged at 24 months.

This would be a crucial tender by SECI as participation by developers would help gauge their overall interest in India’s solar power sector. SECI was forced to first downsize, and then cancel, several large solar power tenders due to multiple issues flagged by project developers.

While availability of transmission capacity to support new projects, and duties and taxes on solar equipment have been contentious issues for developers for several months now, the problems with the last tender were unheard of in the country’s history.

Of the 3 gigawatts of solar power capacity SECI awarded to six developers, the allocation of 2.4 gigawatts capacity was annulled. The tariff bids ranged from Rs 2.44/kWh (3.42¢/kWh) to Rs 2.71/kWh (3.80¢/kWh) — a difference of Rs 0.28/kWh (0.38¢/kWh), but the difference between the lowest and second-lowest bid was significantly high at Rs 0.20/kWh (0.28¢/kWh). This led accusation of cartelization among some developers, which ultimately led to cancellation of 2.4 gigawatts of capacity allocated to five developers.