In a significant development, the Solar Energy Corporation of India (SECI) has announced that it has reduced the capacity of the manufacturing tender which was introduced by the body a few months ago.
In May 2018, Mercom had reported that SECI tendered 5 GW of manufacturing capacity to be set up across the country. The capacity has now been reduced to 3 GW.
The manufacturing capacity is to be linked to inter-state transmission system (ISTS)-connected solar photovoltaic (PV) projects.
The goal of the tender is to strengthen the domestic solar supply chain by incentivising domestic manufacturing capacity establishment by awarding PPAs to build projects.
Some of the highlights of SECI’s amendments to the manufacturing tender are as follows:
- The capacity of 5 GW for manufacturing has been reduced to 3 GW. Developers would be provided assured PPAs of 2,000 MW for a manufacturing capacity of 600 MW, therefore the total power projects awarded will remain at 10 GW.
- The minimum capacity developers can bid for manufacturing has been reduced from 1 GW to 600 MW.
- The time allowed to solar power developers to set up manufacturing capacity has also been revised to 2 years, from the earlier 3 year time period.
- The solar project capacity allocated will need to be commissioned in a phased manner. The PPA will be executed within a maximum time frame 90 days from the date of letter of award (LoA). The successful bidder will be required to commission minimum 40 percent of the cumulative allocated capacity within 21 months from the date of PPA. Successful bidders will be required to commission the balance allocated capacity within 36 months from the date of LoA.
- The maximum tariff payable to developers has been reduced from ₹2.93 ($0.041) to ₹2.75 ($0.039), however this tariff excludes safeguard duty.
- In the original tender, it was stated that, for the manufacturing unit, the manufacturer can use any technology for producing modules, provided that the materials used in the process are produced domestically. The only major raw material that can be imported is polysilicon. The manufacturing unit must be developed over a three-year period from date of award. This clause has now been amended and for silicon based facilities, the production facility of producing modules from polysilicon need to be established anywhere in India and the functional raw material, that is polysilicon, can be imported. The other supplementary raw materials (apart from silicon based raw materials) are required for processing from polysilicon can be sourced from anywhere.
- For non-silicon-based technologies, the primary functional raw material can be imported. However, the subsequent manufacturing chain needs to be established anywhere in India. the other supplementary raw materials (apart from primary raw material) required for processing can be sourced from anywhere.
- The efficiency of modules manufactured is mandated to be 19 percent, in addition, 30 percent of the installed manufacturing facility should produce modules with efficiency of 20 percent or more (somewhat similar to China’s top-runner program).
- In case of thin film modules, the manufacturing facility should produce modules with average efficiency of 18 percent or more
- The manufacturing facility should comply with “the Solar Photovoltaics, Systems, Devices and Components Goods (Requirements for Compulsory Registration) Order, 2017 ” notified on 5th September’2017
- Earnest money deposit (EMD) and performance bank guarantee amounts have also been revised in line with the reduction in manufacturing unit sizes.
It is unclear at the moment if there is enough demand for this tender.
Meanwhile, SECI recently cancelled a 3 GW tender except for the 600 MW that was won at the L1 tariff by ACME which had quoted ₹2.44 (~$0.0355)/kWh.
Shaurya is a staff reporter at MercomIndia.com with experience working in the Indian solar energy industry for the past four years in various roles. Prior to joining Mercom, Shaurya worked with a renewable energy developer and a consulting company. Shaurya holds a Bachelors Degree in Business Management from Lancaster University in the United Kingdom.