The Solar Energy Corporation of India has yet again tried its hands at renewable energy storage tender. This time the agency has issued a tender with a special clause that may result in lower tariff bids and attractive buying rates for buyers.
India has offered project developers a renewable energy capacity of 1.2 gigawatts equipped with energy storage. According to tender conditions, developers can set up wind or solar or hybrid projects of solar and wind energy. The size of any project shall range between 50 megawatts to 300 megawatts while a group company can bid for a maximum capacity of 600 megawatts.
The tender has been issued under the central government policy and is thus a part of the inter-state transmission system scheme which allows bidders to set up the projects at the site of their choosing. SECI will look for power distribution utilities interested in buying power from these energy storage projects and then sign power purchase agreements with them, likely spanning 25 years.
While SECI, and some other states, have tried their hands at renewable energy storage tenders earlier as well, none have seen any substantial success. Large-scale tenders issued by SECI did not see financial auction round after tenders were either undersubscribed or likely financial bids were too high to make them attractive for power distribution utilities.
SECI had offered a total capacity of 300 megawatts at two solar power parks with energy storage option. Both the tenders were cancelled without any financial auction taking place.
The Indian government seems to have learned from its mistakes and is now widening the scope of energy storage technologies that can be used by project developers. This fresh tender allows project developers to use any energy storage technologies including battery energy storage systems, pumped storage systems, mechanical and chemical systems, or combinations of them.
Two months back, the Ministry of New and Renewable Energy had asked for proposals from project developers for gravity-based energy storage projects. Project developers may look at pumped storage or mechanical energy storage technologies to keep the generation cost and tariff bids low.
An Indian company Greenko Energy Holdings is developing two pumped hydro storage projects in Karnataka and Andhra Pradesh. Each project shall have 2 gigawatts of wind and 2 gigawatts of solar power capacity installed.
A crucial clause that SECI has included in this tender for the first time is regarding the allotment of capacity based on tariff offered by the developers to supply energy during peak hours. Developers shall be offered a flat tariff of Rs 2.70/kWh (3.81¢/kWh) during off-peak hours, i.e. between 9 AM and 6 PM and midnight to 6 AM. Developers shall have to bid to supply 300 megawatt-hours per each 100-megawatt capacity installed during peak hours of 6 PM to midnight and 6 AM to 9 PM.
Developers shall be required to commission the projects within 18 months from the date of signing the power purchase agreement and shall have a maximum of 24 months to fully commission the projects. There have been several instances where developers have missed project commissioning deadlines due to unavailability of transmission network and equipment. A clause has been added to the tender to address this issue as well. Developers shall not be penalized if there is a delay in the connectivity of the project with the transmission network.
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