The Solar Energy Corporation of India (SECI)’s tender for setting up 2,000 MW of grid-connected solar photovoltaic (PV) power projects (Tranche-I) under the second phase of the Central Public Sector Undertaking (CPSU) program has been undersubscribed by 847 MW. The projects will be developed on Build-Own-Operate (B-O-O) basis.
A total of six government entities submitted bids totaling 1,153 MW capacity. A SECI official confirmed the closure of the submission of technical bids and informed that the tender had been undersubscribed. The official, however, did not provide any reason for the undersubscription of this tender.
According to a market source, “The National Thermal Power Corporation (NTPC) has submitted its bid to set up 1,000 MW of grid-connected solar PV projects, Singareni Collieries bid for 90 MW, Assam Distribution, and NHDC, (a joint venture between NHPC and Madhya Pradesh State Government), bid to develop 30 MW and 25 MW of grid-connected solar PV capacity respectively. Nalanda University submitted bids to set up 5 MW of projects while Delhi Metro Rail Corporation (DMRC) bid to set up 3 MW.”
As the tender has been undersubscribed, 80% of the capacity bid for will be awarded in line with the ministry norms. This means a maximum of 922.4 MW of grid-connected solar PV project capacity will be awarded in this tender. In such a scenario, if the NTPC quotes the lowest VGF amount, no other bidder will be able to win the auction.
The tender to set up 2,000 MW of grid-connected solar PV projects under second phase of CPSU program was floated by SECI in March 2019. The maximum permissible limit for VGF had been kept at ₹7 million (~$0.10 million)/MW for these projects.
In July 2019, SECI amended a provision in the tender and allowed for the inclusion of micro and mini grid-connected projects in the ambit of this tender. At that time, SECI also increased the project commissioning timeline from 18 months to two years.
In the last few months, quite a few of SECI’s tender have been left undersubscribed, indicating poor interest from the developers.
In May 2019, for instance, the tender issued by SECI to set up 1,200 MW of ISTS-connected solar-wind hybrid power projects (tranche-II) was left undersubscribed by 300 MW.
Before this, its tender for 1,200 MW of ISTS-connected wind power projects on a pan-India basis under tranche-VII has been undersubscribed by 50%.
This article has been edited to reflect the correct amount of undersubscription i.e 847 MW
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.