SECI Tenders 5 GW of Solar Manufacturing Capacity Linked with PPAs for ISTS Connectivity

The Solar Energy Corporation of India (SECI) has tendered 5 GW of manufacturing capacity to be set up across the country.

The manufacturing capacity will be linked to inter-state transmission system (ISTS)-connected solar photovoltaic (PV) projects for an aggregate capacity of 10 GW. The bid-submission deadline is August 27, 2018.

The manufacturing unit and the linked solar PV projects will be developed on build own operate (BOO) basis. SECI will enter into power purchase agreement (PPA) with the successful bidders for purchase of solar power for a period of 25 years.

The solar project developers (SPDs) will be selected through tariff based competitive bidding followed by e-reverse auction. The SPDs will be allowed PPAs for double the capacity of the solar manufacturing plant. So, the total solar PV project capacity would be 10 GW for a manufacturing capacity of 5 GW.

The minimum capacity to bid for is 1 GW of manufacturing linked to 2 GW of ISTS-connected solar PV projects with assured offtake of power. A single bidder can choose to bid for the entire 5 GW manufacturing, linked to 10 GW ISTS-connected solar PV projects for which power offtake has been assured. The slab for bidding will be 1 GW each and capacities will be allocated on bucket filling basis.

The SPDs are free to set up ISTS-connected solar PV project parallel to the setting up of manufacturing facility. The solar PV project will be allowed commissioning over a period of four years, with minimum 25 percent of the cumulative allocated capacity being commissioned every year. The maximum tariff payable to the project developer is fixed at ₹2.93 (~$0.0431)/ kWh for 25 years.

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 is a global tender and the projects can be located anywhere in the country. The only constraint is that the awarded manufacturing capacity to a single bidder must be set up at a single location. Bidders are free to set up the linked solar PV projects at multiple locations.

The scope of work includes the setting up the manufacturing unit and the solar PV projects, as well as the transmission network up to the interconnection or delivery point. The tender has been prepared in line with the solar bidding guidelines which were issued by the Ministry of Power in August 2017.

During the course of the PPA, if it is found that the developer has not been able to generate minimum energy in any given year corresponding to the lower limit of the Capacity Utilization Factor (CUF) declared, the developer will pay the compensation provided in the PPA, as payable to SECI. The SECI can write off the penalty in case of grid non-availability for evacuation, which is beyond the control of the developer.

In case the availability is more than the maximum CUF specified, the generator can sell it to any other entity only if SECI refuses to procure. In case SECI purchases the excess generation over and above 10 percent of the declared annual CUF, the same will be done at 75 percent of the PPA tariff.

Bidders selected by SECI will submit two separate performance bank guarantees (PBGs) per project at the rate of ₹2.2 billion/GW for solar manufacturing and ₹4 billion/2GW of solar PV project within 30 days of issuance of Letter of Intent (LoI).

Successful bidders will have to pay ₹10.6 million/project plus 18 percent Goods and Services Tax (GST) to SECI towards administrative overheads, liaising with the state authorities, DISCOMs, STUs or CTUs, pre-commissioning and commissioning expense within 30 days of issuance of LoI.

This is the first step towards making India’s solar supply chain strong. In December 2017, SECI had invited an Expression of Interest (EoI) from prospective manufacturers to set up an integrated solar manufacturing facility in India within a three-year time-frame.

Saumy Prateek Saumy is a senior staff reporter with 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.