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India Solar Power Tender

Solar Energy Corp Of India Launches Fresh Tender For 750 Megawatts Solar

written by saurabh

Following the massive success of two recent auctions at the Bhadla solar power park in the state of Rajasthan, the Solar Energy Corporation of India has announced two new tenders for the expansion of the solar park.

Solar Energy Corporation of India (SECI) will offer 500 megawatts and 250 megawatts through two tenders at Bhadla solar power through the viability gap funding mode. Project developers to be offered the projects at a fixed tariff of Rs 3.93/kWh (6.1¢/kWh) but will have to bid for the capital cost support needed from the government.

Developers, however, will also be free to quote tariffs lower than the benchmark and opt not to take any capital cost support.

The tenders have been launched under the phase II batch IV of India’s National Solar Mission. The SECI had announced a target to auction 5 gigawatts capacity through the viability gap funding mode. It has so far auctioned 4.5 gigawatts capacity, of which power purchase agreement have been signed for 2.5 gigawatts. Through these tenders SECI would achieve its target.

The benchmark tariff offered by SECI is at 61% premium to the current lowest tariff for solar power projects. In May this year, ACME Cleantech Solutions secured a project at the Bhadla solar power park at Rs 2.44/kWh (3.8¢/kWh); no capital cost assistance was offered in that auction.

Thus, the higher tariff at offer, along with the capital cost assistance will act as a double bonanza for project developers. It would not be surprising if developers bids for lower tariff and no capital cost assistance.

We have seen extreme competition among project developers over the last few months in India. Tariff bids in India crashed 26% in a matter of just three months.

Acme Cleantech Solution (200 megawatts) and SB Cleantech (300 megawatts) were the winners in (Bhadla solar park) auction at a tariff of Rs 2.44/kWh and Rs 2.45/kWh (3.8¢/kWh), respectively. The massive jump in competition within two days is evident from the fact that Acme Cleantech Solutions reduced its bid from a losing one of Rs 3.36/kWh (5.2¢/kWh) in the 250 megawatts Bhadla auction to just Rs 2.44/kWh (3.8¢/kWh) for the 500 megawatts auction – decline of 27.4% in a matter of two days.

June 25, 2017 0 comment

Renewable Energy

SoftBank-backed SB Energy Justifies India’s Lowest Solar Power Tariffs

written by saurabh

SoftBank led SB Energy has stated that India’s lowest solar power tariffs are financially viable given the sharp fall in module prices and ample supply of debt finance for energy projects.

Manoj Kohli, executive chairman of SB Energy, recently stated that the company’s tariff bid of ₹2.45/kWh (3.8¢/kWh) for a 300 megawatt solar power project in Rajasthan is aggressive but financially viable. Kohli stated three major reasons for the sharp fall in tariff bids in India’s solar power market over the last few months.

Price of Chinese solar power modules have fallen significantly over the last few months has been a major reason for conjugated fall in tariff bids world over, Kohli said. Chinese exports have increased as the country’s domestic solar power program has slowed down.

Global banks have also increased exposure to renewable energy projects, Kohli added. Several of the cheapest solar power projects across the world have received debt funding at very low rates. These projects include the 200 megawatt phase II of Dubai solar power park and the 750 megawatt Rewa solar power park in Madhya Pradesh, India.

Kohli also stated another global trend in the solar power market. Larger projects are being auctioned and commissioned now than at any time in the history. This results in lower costs due to economics of scale.

The three reasons mentioned by Kohli are applicable to the global solar power market in general but there are India-specific reasons as well for the declining prices. Withdrawal of inter-state transmission charges, increased renewable energy installation and consumption targets and efforts to improve the financial health of power utilities have contributed significantly to the decline in solar tariff bids in India.

May 28, 2017 0 comment

Renewable Energy

Indian Hydro Power Company Scouts Partner For 500 Megawatt Solar Venture

written by saurabh

SJVN Limited is looking for a partner to set up solar power capacity of 500 megawatts. The state-owned company plans a joint venture which will participate the auctions organised by other public sector companies.

In the proposed joint venture SJVN shall have a minimum of 26% share. Eligible parties to the joint venture must meet certain conditions. In case of project developers, they should have commissioned at least 50 megawatts of cumulative capacity. In case of PV module manufacturers, the production capacity should be at least 100 megawatts.

SJVN is among several public sector companies in India that plan to set up large-scale solar and wind energy projects across the country as part of the government’s ambitious renewable energy targets.

A four gigawatts solar power park is being planned in Rajasthan by various public sector companies, including SJVN and Solar Energy Corporation of India.

The offer for partnership by SJVN offers a unique opportunity for private sector project developers struggling to survive in the extremely competitive Indian solar power market. Being partner to a public sector company could allow project developers access to cheaper debt finance which has proven to be critical for bidding at competitive tariffs.

From the point of view of the buyer as well the presence of a government-owned entity helps boost confidence regarding longevity and proper execution of the project.

May 24, 2017 0 comment

Renewable Energy

Demonetisation Hits One Of India’s Largest Solar Power Tenders

written by saurabh

It seems that the state of Tamil Nadu will have wait a bit longer to have the adequate solar power capacity operational to achieve the renewable purchase obligation.

Demonetisation drive implemented by the Indian government on 8 November has crushed the hopes of the state utility for an bumper solar power auction. State-owned power utility Tamil Nadu Generation and Distribution Corporation (TANGEDCO) had issued a tender for setting up 500 MW of solar PV power projects last month.

According to media reports, the utility has received only 20 bids with cumulative capacity of 116 MW. The reason for such poor showing is the inability of project developer to acquire land. Several developers reported that they were unable to pay cash to acquire land after currency notes of denomination Rs 500 and Rs 1000 were declared illegal for transactions starting 9 November 2016.

This auction for critical for TANGEDCO to increase the installed solar power capacity to a level which is closer to what it needs to meet the solar power purchase obligation.

Tamil Nadu Generation and Distribution Corporation (TANGEDCO) had approached the commission to let it auction this capacity as it would not be in a possible to meet the assigned target to acquire 5% of electricity from solar power projects for financial year 2017-18.

According to government estimates, an installed capacity base of 2.5 GW will be required to meet the 5% solar RPO target in 2017-18. TANGEDCO, however, expects that only 1.6 GW solar power capacity would be operational by that time, thus leaving a shortfall of 900 MW.

A tariff bid ceiling of Rs 5.10/kWh has been set for the purpose of competitive auction. TANGEDCO expects that the winning bids would be much lower, possibly closer to the national record low of Rs 4.35/kWh (US¢6.50/kWh).

November 30, 2016 0 comment

Renewable Energy

Indian State Of Tamil Nadu Issues 500 MW Solar Power Tender

written by saurabh

One of the leading Indian states in terms of installed solar power capacity, Tamil Nadu, has announced another large tender.

State-owned power utility Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has issued a tender for setting up 500 MW of solar PV power projects. The tender was floated just weeks after the Tamil Nadu Electricity Regulatory Commission had given an approval for the same.

However, participating developers may be apprehensive about the utilities record on procurement of solar power. Developers of some operational renewable energy projects had complained to the Ministry of New & Renewable Energy that the state utility had asked them to curtail generation due to lack of sufficient transmission capacity.

October 24, 2016 0 comment

Renewable Energy

Foreign Developers Fail To Make The Cut In India 500 MW Solar Power Auction

written by saurabh

Six project developers wrapped up 500 MW solar power tender with difference in their tariff bids of less than one US cent.

Interestingly, only a single foreign project developer could make the cut. Foreign project developers, like SkyPower Global, SunEdison and Fortum, have so far led the record-breaking solar power tariffs in India.

SkyPower Global is not believed to have participated in the auction while SunEdison could not submit a winning bid. Fortum Group managed to secure rights to develop 100 MW project at Rs 4.79/kWh (US¢7.2/kWh). Canadian Solar also participated in the bidding process but failed to quote a low enough tariff bid. The projects shall be part of the 2 GW ultra mega solar power project coming up in the southern state of Karnataka.

Apart from Fortum Group, all other winning developers are based in India. RattanIndia Power and ReNew Power Ventures won bids for 50 MW capacity each. Adani Enterprises, ACME and Tata Power secured the rights to develop 100 MW capacity each.

Participation by SunEdison should come as nothing short of a surprise. The company secured rights to develop a 500 MW project in Andhra Pradesh last year at Rs 4.63/kWh (US¢6.9/kWh) but is believed to be having problems implementing the project due to its poor financial condition.

April 20, 2016 0 comment

Renewable Energy

Indian Company Plans 1,250 MW Solar Power Projects Over Water Bodies

written by saurabh

Government-owned power generation company in the western state of Maharashtra has revealed expansive plans to utilise water bodies and generate solar power.

Maharashtra State Power Generation Company Limited (Mahagenco) recently floated tenders for the preparation of detailed project reports for setting up solar power projects over water bodies in the state.

Mahagenco plans to set up these projects in partnership with other government agencies that own these water bodies through a revenue-sharing model. The company plans to set up projects on a) reservoirs and canals and, b) lakes and other water bodies.

The company aims to replicate the canal-top solar power projects implemented in the neighbouring state of Gujarat. Canal-top solar power projects have dual advantage of little to no requirement of land requirement to set up the solar panels, thereby making substantial savings on project’s capital cost, and limiting the loss of water from canals/reservoirs due to evaporation.

Water bodies owned by villages and local self-governing bodies will also be roped in to set up such solar power projects. Mahagenco plans to implement these projects through net-metering scheme. Solar power projects set up at such water bodies will inject electricity during the day and the local utility will supply electricity to villages during the night. The balance in electricity units shall be settled on monthly basis. This will reduce the electricity bills for villagers and also improve electricity supply.

After the successful implementation of canal-top solar power projects in Gujarat several other states have announced plans to implement similar projects. Punjab, Damodar Valley Corporation and Kerala have publicly announced targets to set up projects over canals, reservoirs and other water bodies.

Image Credit: SunEdison

March 29, 2016 0 comment