Published on August 12th, 2019 | by Saurabh0
1.2 Gigawatt Solar Tender In India Receives No Bids
August 12th, 2019 by Saurabh
A large solar power tender issued by the largest power generation company in India has failed to receive even a single bid. The disastrous response shows the thought process of project developers who are looking for much more flexibility in terms of project execution.
NTPC Limited had issued a tender offering 1.2 gigawatts of solar PV capacity in November last year. Project developers were allowed to bid for projects in multiples of 50 megawatts. The maximum capacity that a group company could bid for was 600 megawatts.
A feature that NTPC decided to introduce in this tender for the first time ever was the threshold for tariff bid. It had set ₹2.78/kWh (3.91US¢/kWh) as the highest permissible tariff bid. Another constraint that NTPC chose to introduce was the location of the projects. Developers were asked to set up projects close to NTPC-owned sub-stations in four states in western and central India.
Sub-stations owned by NTPC are usually located close to the thermal power plants owned by the company. It is unlikely the solar power project developers would already have land banks close to these power plants, and thus the sub-stations. Solar power developers usually accumulate and maintain large land banks before participating in auctions.
NTPC has decided to extend the deadline for submission of bids. The company has already extended the deadline twice before.
The Solar Energy Corporation of India is the only other central government agency that offers such large-scale solar power projects to developers. While SECI has introduced a maximum threshold for tariff bids developers do participate in SECI auctions aggressively. One of the main reasons could be that under SECI auctions developers are completely free to set up projects at the sites of their choosing.
NTPC Limited had also issued a 1 gigawatt tender under the CPSU scheme wherein only public sector companies can participate and developers are mandated to use Indian-made modules. This tender, too, had to be extended multiple times. A similar tender issued by SECI with 2 gigawatts of capacity received a poor response with NTPC itself as the only major bidder.
India recently amended some provisions of the central sector wind energy tenders to address the concerns of developers and to bring back the interest of the industry after poor response in the last two auctions. It seems the government may have to take a similar approach for solar power auctions as well.