The Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL) has tendered 33 MW of grid-connected rooftop solar PV projects to be set up under the RESCO model in the state. MPUVNL is implementing this project in partnership with the World Bank.
The bid-submission deadline is August 9, 2018. MPUVNL has identified 567 project sites for this program.
The grid-connected projects can either be developed under a single category or combination of categories I and III, as defined under the policy for decentralized renewable energy systems 2016. According to the policy, category I comprises grid-connected net metered systems and category III consists of grid-connected systems for consumption within premises with no export of power.
The scope of work includes the designing, engineering, supply, installation, testing, and commissioning of various capacities of projects and interconnection with the distribution company (DISCOM). The successful bidder will also be responsible for 25 years of operation and maintenance of the projects.
The bidders will provide warranty covering the rectification of all defects in the design of equipment, materials, and workmanship including spare parts for a period of 25 years.
What makes this tender the first of its kind in India
MPUVNL has identified 567 project sites for this program for the RESCO program to help reduce installers’ time and effort in finding procurers with enough demand and rooftop space.
1. Data Room: A first of its kind data room has been set up with the help of World Bank which includes site specific information and consumption history to reduce the risk profile of projects.
The data room provides:
- Coordinates of the site,
- Indicative Solar PV array layout superimposed on Google image,
- Estimated solar PV plant capacity based on available roof area, considering shadow, gap between rows and building code requirement for wind loading,
- Estimated annual energy generation based on local climatic data, and
- Monthly electricity bills.
2. PPA: Beneficiaries have pre-cleared the terms of the PPA. The developer need not resort to market mode for executing the projects.
3. Subsidies: Institutional sector (Government+Private) would enjoy state government subsidy in addition to MNRE’s subsidy. Overall subsidy can be as high as 48% of Capex. Half of subsidy can be paid as mobilisation advance against BG to facilitate easy cash flow.
4. Risk of pre-mature termination: MPUVNL provides for compensation to RESCO developer in the event of early termination, which can be triggered by event of default by either developer, or procurer, or if the procurer wishes to terminate early without any such default.
5. Electricity demand risk: MPUVNL has ensured proper project sizing to streamline demand and revenue for bidders.
6. No entry barrier: To reduce the entry barrier, no technical criteria are put for eligibility, and net-worth requirement has been kept at just ₹10 million (~$14,622)/MW. Since under performance gets naturally penalized through reduced revenues, no operational performance guarantee is sought from the developers.
7. Payment Risk: Projects are grouped based on the profile of ultimate paying entity, viz., Central Government departments/ State Government and nature of end-use. There would be one winner for each project group. This will facilitate the developer with large size and uniform credit profile of the procurers. Separate tenders have been invited for individual project groups as tabulated below.
“This is a refreshingly innovative tender that has anticipated a lot of the challenges faced by installers in developing rooftop projects and come up with uniquely tailored solutions. This tender is a blueprint that other states should adopt to promote rooftop growth in their states, “said Raj Prabhu, CEO of Mercom Capital Group.
Rooftop installations in India are lagging with approximately 2 GWs installed so far compared to the target set by the government of 40 GWs by 2022.
The entire capacity has been divided into 27 project groups and bidders can place bids for more than one project group, giving them the option to submit up to 27 different bids along with individual bid securities.
Recently, MPUVNL retendered 22 MW of rooftop solar PV projects to be set up under the RESCO model in the state. Then in November 2017, the MPUVNL tendered 40 MW of grid-connected rooftop solar PV projects to be developed at various locations in the state of Madhya Pradesh.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.