Government May Increase the Duration of Safeguard Duty on Solar Imports_ Panel Discussion

The National Thermal Power Corporation (NTPC) has tendered 1,200 MW of interstate transmission system (ISTS)-connected solar photovoltaic (PV) projects to be developed in the western region of the country. The bid-submission deadline is December 19, 2018. The technical bids will open on December 20, 2018.

When contacted, an NTPC official informed Mercom, “The minimum bid capacity is 50 MW and the maximum a single bidder can bid for is 600 MW. There is no upper tariff ceiling for this tender.”

The grid-connected solar PV projects will be developed on build own operate (BOO) basis. The NTPC has stated that the projects will be developed near NTPC switchyards. The scope of work includes the design, engineering, manufacturing, supply, packing and forwarding, transportation, unloading, storage, installation, and commissioning of grid-connected ISTS-connected solar PV projects.

NTPC tenders do not come with any fixed upper tariff cap in contrast to SECI’s prevalent policy of imposing tariff caps on tenders and yet have been able to generate huge participation from the developers leading to competitive bids that SECI has been aiming to achieve.

Mercom reported earlier that SECI has decided to raise the upper tariff ceilings for two of its mega tenders which had failed to garner adequate response from bidders in the past.

Even the Solar Projects Developers Association (SPDA) had recently written to the government cautioning against upper tariff caps for solar tenders. In a letter addressed to the Union Power Minister R.K. Singh, the SPDA raised its concern saying that the decision to cap tariffs needs to be reversed because it is likely to make solar projects unviable. Elaborating further, the letter explained that bids are determined keeping in consideration a range of issues like the changes in module prices, currency risks and varied solar radiation across states.

Solar project developers hope that the government allows the price mechanism to be determined by market dynamics rather than government intervention. The NTPC is allowing project developers the option they have been waiting for.

To keep things in perspective, a lowest (L1) tariff of ₹2.59 (~$0.0372)/kWh was quoted in the auction held by NTPC to develop 2 GW of ISTS-connected solar PV projects. This tender too did not have any upper tariff cap, yet developers chose to bid low.

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