India’s largest hydro power generation company has issued one of the largest-ever solar power tenders in the country’s history.
NHPC Limited (formerly National Hydro Power Corporation) became the latest public sector company to issue a large-solar power tender. The company has called upon developers to set up 2 gigawatts of solar power projects across the country.
The maximum threshold bid allowed in the tender is ₹2.95/kWh (4.15US¢/kWh) and individual developers can bid for a maximum of 600 megawatt capacity each.
All features of this tender are virtually similar to the tenders issued by NTPC Limited, India’s largest power generation company, and also a public sector enterprise.
Developers shall be free to set up the projects at the sites of their choosing. Power generated from the projects will be purchased by NHPC Limited, which will then sell it to interested distribution utilities. It is likely that NHPC itself would charge a nominal amount for being the intermediary, as is the case with NTPC Limited and the Solar Energy Corporation of India.
Having a government-owned company as the off-taker of power is a crucial aspect that developers look for cashflow stability. This arrangement allows the developers to avoid any interaction with the distribution utilities for getting payments. Poor financial condition of power distribution utilities in India has led to unpaid dues to renewable energy developers worth millions of dollars.
A very crucial aspect of this tender is the high bid threshold. NHPC would allow bids up to ₹2.95/kWh (4.15US¢/kWh) compared to the limit of ₹2.65/kWh (3.73US¢/kWh) set by the SECI in a recently concluded auction. This increased leeway available to the developers is expected to draw companies back to the tender circuit.
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