Azure Power announced that it has received a letter of award (LoA) for 2 GW of interstate transmission system (ISTS) solar projects under the greenshoe option in the Solar Energy Corporation of India’s (SECI) manufacturing-linked solar tender for 7 GW of solar capacity with a 2 GW solar manufacturing component.
The independent power producer said that it was awarded this LoA in addition to the 2 GW of solar projects it had previously won under the greenshoe option of SECI’s tender. Under this greenshoe LoA, the company is expected to supply power for 25 years at a tariff of ₹2.92 (~$0.039)/kWh. The project also includes a 500 MW cell and module manufacturing capacity requirement.
It added that it has been awarded a total of 4 GW including the auction it had won in December, which saw one of the largest solar projects ever awarded globally.
In January, Mercom reported that Azure Power and Adani Green Energy both won bids to develop 2,000 MW of projects with 500 MW of manufacturing capacity under this tender.
In June, Adani Green won bids for 8 GW of solar projects and 2 GW of solar cell and module manufacturing capacity in SECI’s tender. Adani’s win, the largest in the world in a single bid, will entail a total investment of approximately $6 billion (₹452 billion). Adani, under the greenshoe option, had offered an additional capacity of 1,500 MW solar cell and module manufacturing and 6 GW of solar project development.
According to Mercom’s India Solar Project Tracker, Azure Power has about 1.7 GW of large-scale solar projects in operation with around 5.4 GW of projects under development.
This solar tender linked with a manufacturing component was one of its kind in India, and the tender has faced many obstacles, twists, turns, and multiple deadline extensions.
It was issued with a greenshoe option, wherein companies could opt for an additional capacity to both develop and manufacture.
In June 2019, SECI revamped and reissued the manufacturing linked solar tender, which it had initially floated in January 2019. The tender was originally issued to set up 3 GW of grid-connected solar capacity linked with a 1.5 GW solar manufacturing component. The revised tender was issued for 6 GW of solar projects linked with a 2 GW solar manufacturing component.
In October 2019, SECI increased the capacity of the tender from 6 GW to 7 GW. The amended tender called for 7 GW of ISTS-connected solar projects linked with 2 GW of solar manufacturing component.
SECI also amended various clauses of this tender to make it appealing for the interested developers.
In November 2019, Mercom reported that SECI received a good response for this tender and that it had been oversubscribed by 1 GW. In the auction, Adani Green Energy submitted a bid for 4 GW of solar projects, and 1 GW of manufacturing component, followed by Azure and Navyug who submitted bids for 2 GW of projects each. Both companies also submitted bids for 500 MW of manufacturing units each.
Mercom’s upcoming webinar on ‘Major Shifts in the Indian Solar Industry’ – will discuss the recent push towards domestic manufacturing, what it would entail, and the government incentives that are needed to make it happen. You can register for the session here.
Nithin is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.