Andhra Pradesh Issues Tender for 6.4 GW of Solar Power Projects for State’s Farmers

The Andhra Pradesh Green Energy Corporation Limited (APGECL) has invited bids for developing 6.4 GW of solar power projects at ten locations in the state.

The total capacity of 6.4 GW will include 600 MW at Chakrayapet, 400 MW at Thondur, 600 MW at Kambaldinne, 600 MW at Pendlimarri, 600 MW at Rudrasamudram, 600 MW at CS Puram, 600 MW at Uruchinatala, 1,200 MW at Akmbadur, 600 MW at Mudigubba, and 600 MW at Kolimigundala.

In February this year, the Government of Andhra Pradesh announced that it was planning to develop 10 GW of solar power projects as a permanent solution to supply free power to farmers in the state. The state government decided to form APGECL to install 10 GW of solar projects to ensure nine hours of daytime free power supply to the agriculture sector on a sustainable basis. The program was first announced in February 2020.

Interested bidders will have to submit an amount of ₹150,000 (~$2,029)/MW as the earnest money deposit (EMD). The last date to submit the bids is December 28, 2020, and the opening of bids will take place on January 07, 2021.

As per the tender documents, the bidder should submit a single bid for a minimum capacity of 300 MW and in multiples of 300 MW up to the total capacity, except the 400 MW project. For each project, the minimum project capacity will be 300 MW. For every ₹100,000 (~$1,353)/MW incurred towards Basic Customs Duty (BCD) and safeguard duty, the quoted tariff (after the e-reverse auction) will be increased by ₹0.0055 (~$0.00007)/kWh. An amendment to the PPA will be signed to this effect.

As per the tender document, the developer will have the option to develop 50% of the capacity over what’s quoted by the bidder under the greenshoe option within six months from the date of the issuance of the letter of award (LoA).

The capacity utilization factor (CUF) for the project will remain unchanged for the entire term of the power purchase agreement (PPA). It will be the developer’s responsibility to install the number of solar panels and associated equipment as may be necessary to achieve the required CUF. The developer should maintain generation to achieve annual CUF within +10% and -15% of the declared value until the end of ten years from commissioning date, and within +10% and -20% of the declared value of the annual CUF after that until the end of the PPA duration of 30 years.

APGECL will purchase any excess generation over and above 10% of declared annual CUF at a fixed tariff of 75% of the PPA tariff.

To participate in the bidding process, the bidder should have experience in the solar and electricity sectors. The bidder should have executed solar projects with a minimum of 25 MW in the last ten years. In the case of a consortium, at least one member of the consortium should have the above experience for the consortium to be technically eligible for participating in the bid.

Regarding the financial criteria, the bidder’s net worth should be at least ₹6 million (~$81,194)/MW of the quoted capacity, as of the last day of the previous financial year. The bidder’s minimum annual turnover should be ₹4.14 million (~$56,091)/MW of the quoted capacity during the last financial year.  The internal resource generation capability, in the form of Profit Before Depreciation Interest and Taxes (PBDIT), should be at least ₹830,000 ($11,231)/MW of the quoted capacity.

According to Mercom’s India Solar Project Tracker, Andhra Pradesh currently has 3.7 GW of large-scale solar projects in operation, while around 1.3 GW of projects are under different stages of development.

Recently, the Government of Andhra Pradesh adopted the proposals suggested by APGECL to develop 10 GW of solar power capacity to supply nine hours of daytime free power to the agriculture sector. As per the suggestions, the PPA tenure will be 30 years instead of 25 years, as the increase of the PPA tenure is expected to lower tariffs in the bidding process.

According to Mercom’s India Solar Tender Tracker, Andhra Pradesh has so far floated 6.5 GW of solar tenders.