In another attempt by the Indian government to help domestic solar cell and module manufacturers, a fresh tender with a domestic content requirement has been issued.
India’s largest power generation company, the government-owned NTPC Limited, has issued a tender for 1 gigawatt of solar PV capacity under the CPSU scheme phase II. Project developers are required to use only Indian-made solar cells and modules for the projects. Project developers shall be free to choose the location of the projects across the country.
The CPSU scheme has been designed specifically to circumvent the September 2016 WTO ruling against the domestic content requirement program under the initial National Solar Mission. Under the redesigned scheme tenders issued with domestic content requirement shall only serve public sector companies owned by the central government, i.e. Central Public Sector Undertakings (CPSUs).
WTO allows domestic content restrictions if the power generated from the projects is being used by the government itself, in this case, through the government-owned companies.
This is the second tender issued under CPSU scheme after it was revamped. The Solar Energy Corporation of India (SECI) issued a 2 gigawatt tender in March this year. The financial bidding round for that tender is still pending.
The program was revamped in early February this year with the final approval coming from the Cabinet Committee on Economic Affairs. The government announced that DCR tenders with a combined capacity of 12 gigawatts will be issued, and allocated around $1.2 billion for viability gap funding for this scheme. Under the viability gap funding option project developers bid for the lowest capital cost support they would need to set up the projects.
The domestic content requirement tenders came back in the limelight after a 12 gigawatt program for bundled solar power was scrapped as the rapidly falling tariff bids meant that there was no need to bundle power from thermal power plants and solar power plants to make solar power cheaper and more attractive.
NTPC issues other solar power tenders as well with no restrictions on content usage. The company recently made history when it issued a tender asking end-users (also government-owned entities) to submit bids to procure 1 gigawatt solar power.
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