Mahindra Susten to Develop 150 MW Open Access Renewable Power Project

BJP, Congress Bet Big on Renewables in 2024 Election Manifestos

Daily News Wrap-Up: REIL Invites Bids for 200,000 Mono PERC Solar Cells

Solar, Storage, Wind Drive 95% of US Interconnection Queues as Backlog Rises

Ahasolar Wins Consultancy Contract for 52 MW Solar Project from BPCL

REIL Invites Bids for 200,000 Mono PERC Solar Cells

Daily News Wrap-Up: MNRE Adds 4.1 GW of New Solar Module Capacity to ALMM

MNRE Adds 4.1 GW of New Solar Module Capacity to ALMM

AutoNxt Secures Pre-Series A Funding to Finance Electric Tractor Launch

Daily News Wrap-Up: REC Records Highest-Ever Loan Approvals in FY24

<p>The Ministry of New and Renewable Energy (<a href="https://mnre.gov.in/" target="_blank" rel="noopener noreferrer">MNRE</a>), through a letter, has directed NTPC and Solar Energy Corporation of India (SECI) to release performance bank guarantee (PBGs) for the solar and wind power projects that have been commissioned. According to the letter PBGs may be released within 45 days from COD (Commercial Operation Date), subject to fulfillment of requirements of submission of all the requisite documents.</p>
<p>Further, MNRE also mentioned that in case any developer finds delays in release of PBGs, it should be brought to the notice of the MNRE and the managing director of the concerned intermediary procurer.</p>
<p>The letter was approved by the secretary of the MNRE.</p>
<p>A PBG is an irrevocable unconditional bank guarantee deposited by wind or solar power developers to SECI/NTPC after 30 days from the date of issuance of the letter of intent, which is issued when they successfully bid for projects.</p>
<p>Typically, a PBG is released immediately after the successful commissioning of a renewable energy project after taking into account any liquidated damages or penalties due to delays in commissioning as per provisions stipulated mentioned in a power purchase agreement.</p>
<p>However, it seems like developers have been facing issues concerning the timely release of bank guarantees. The delay in the release of PBGs can result in financial losses for developers as their funds get blocked.</p>
<p>In a recent case, the <a href="http://www.cercind.gov.in/2019/orders/340-MP-2018.pdf" target="_blank" rel="noopener noreferrer">Central Electricity Regulatory Commission</a> (CERC) had ruled in favor of three independent power producers (IPPs) regarding the payment of their performance bank guarantee (PBG) to the tune of ₹255 million ($3.7 million). The three IPPs had petitioned the CERC seeking the release of the performance bank guarantees retained by the NTPC. In its order, the commission has ruled that the retention of the performance bank guarantees by NTPC is illegal and arbitrary.</p>
<p>&nbsp;</p>
<p>IAmage credit: AEPC</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/shaurya-bajaj/" class="vcard author" rel="author"><span class="fn">shaurya</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p><span style="font-family: Calibri"><span style="color: #000000"><span>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. </span></span></span></p>
</div></div><div class="clearfix"></div></div></div>

Release Bank Guarantees within 45 Days of Solar and Wind Project Completion: MNRE


					<table id="amazon-polly-audio-table">
						<tr>
						<td id="amazon-polly-audio-tab">
							<div id="amazon-ai-player-label">Listen to this article</div>
							<div id="amazon-ai-player-container">
			<audio class="amazon-ai-player" id="amazon-ai-player" preload="none" controls   controlsList="nodownload" >
				<source type="audio/mpeg" src="http://cms.mercomindia.com/wp-content/uploads/2018/05/amazon_polly_10123.mp3?version=1679668298">
			</audio>
		</div>
							<div id="amazon-polly-subscribe-tab"></div>
							<div id="amazon-polly-by-tab"></div>
						</td>
						</tr>
					</table><p>The Solar Energy Corporation of India (<a href="http://seci.co.in" target="_blank" rel="noopener">SECI</a>) has tendered 5 GW of manufacturing capacity to be set up across the country.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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 <a href="https://mercomindia.com/hoping-rewa-like-low-bids-ministry-power-issues-updated-competitive-bidding-guidelines/" target="_blank" rel="noopener">August 2017</a>.</p>
<p>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.</p>
<p>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.</p>
<p>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).</p>
<p>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.</p>
<p>This is the first step towards making India’s solar supply chain strong. In <a href="https://mercomindia.com/seci-expression-interest-solar-manufacturing/" target="_blank" rel="noopener">December 2017</a>, 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.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/saumy/" class="vcard author" rel="author"><span class="fn">Saumy Prateek</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Saumy Prateek</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/saumy/" target="_blank" rel="noopener">More articles from Saumy Prateek</a></p>
</div>
<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="79" height="102" /><a href="https://mercomindia.com/author/saumy/" rel="noopener"><strong>Saumy Prateek, </strong> </a>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 &amp; Mass Communication from the Manipal Institute of Communication at Manipal University.<a href="https://mercomindia.com/author/saumy/">More articles from Saumy Prateek.</a></div>
</div></div><div class="clearfix"></div></div></div>

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

<p>The Gujarat Urja Vikas Nigam Limited (<a href="http://www.gseb.com/guvnl/index.aspx" target="_blank" rel="noopener">GUVNL</a>) has scrapped the recently conducted auction for the development of  500 MW of grid-connected solar photovoltaic (PV) projects in the state.</p>
<p>According to a document reviewed by Mercom, GUVNL has also returned the performance bank guarantees (PBGs) submitted by the bidders.</p>
<p><a href="https://mercomindia.com/guvnl-500mw-solar-tender/" target="_blank" rel="noopener">In February 2018</a>, GUVNL had tendered 500 MW of grid-connected solar PV projects to be developed across Gujarat to meet its renewable purchase obligation (RPO).</p>
<p>In March 2018, Kalthia Engineering and Construction emerged as the lowest (L1) bidder by quoting a tariff of ₹2.98 (~$0.046)/kWh to develop 50 MW of solar PV projects.</p>
<p>After the auction, <a href="https://mercomindia.com/guvnl-auction-solar-tariff-3/" target="_blank" rel="noopener">Mercom had reported</a>, “The L1 tariff quoted in this GUVNL auction is ₹0.33 (~$0.005)/kWh higher than the L1 tariff of ₹2.65 (~$0.0413)/kWh quoted by GRT Jewellers India Private Limited in the <a href="https://mercomindia.com/gujarat-government-agencies-push-low-bid-%E2%82%B92-65kwh-500-mw-guvnl-auction-india/" target="_blank" rel="noopener">previous 500 MW auction</a> held by GUVNL.”</p>
<p>However, even <a href="https://mercomindia.com/capacities-not-awarded-guvnl-500mw-solar/" target="_blank" rel="noopener">by the first week of April 2018</a>, the individual project capacities had not been awarded as higher tariffs were under review by the GUVNL board of directors.</p>
<p>A GUVNL official had then told Mercom, “Tariffs quoted in this auction are way more than that quoted in the GUVNL 500 MW solar auction held last year. That is why the GUVNL board has been involved and they will take the final call.”</p>
<p>When contacted again, the official said, “We cannot be signing PPAs at these rates, these tariffs are too high. Plus, even the developer interest had dimmed and when the board sat down and discussed we thought it is better to scrap this auction and wait for some clarity on the impending safeguard duty order.”</p>
<p>The GUVNL official further stated, “The developers have been factoring in safeguard duty in their bids, else why is there a more than 30 paisa difference in the prices quoted in our previous auction and this.”</p>
<p>We will write to the central government to provide clarity on the safeguard duty and the pass-through option. In case safeguard duty is levied it must be levied prospectively not retrospectively, added the GUVNL official.</p>
<p>When asked if this capacity will be retendered soon, and if GUVNL will make it more attractive to bidders by introducing Viability Gap Funding option (VGF), the GUVNL official said, “We will retender it, but only after receiving proper response from the central government. GUVNL has no plans to introduce VGF; who will pay for it? The government won’t pay as of now and if GUVNL has to pay for VGF from its own coffers, why not settle down for these high rates then.”</p>
<p>“This is just an example of what will happen if safeguard duty is imposed. If a sub ₹3/kWh tariff is too expensive for a state like Gujarat, many other states will complain it is expensive for them too. This also sets a bad precedent for other states to cancel if they don’t like the auction price. Essentially Gujarat is saying don’t price the safeguard duty risk in your bids,” said Raj Prabhu, CEO of Mercom Capital Group.</p>
<p>&nbsp;</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/saumy/" class="vcard author" rel="author"><span class="fn">Saumy Prateek</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Saumy Prateek</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/saumy/" target="_blank" rel="noopener">More articles from Saumy Prateek</a></p>
</div>
<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="79" height="102" /><a href="https://mercomindia.com/author/saumy/" rel="noopener"><strong>Saumy Prateek, </strong> </a>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 &amp; Mass Communication from the Manipal Institute of Communication at Manipal University.<a href="https://mercomindia.com/author/saumy/">More articles from Saumy Prateek.</a></div>
</div></div><div class="clearfix"></div></div></div>

GUVNL Cancels Recently Held 500 MW Solar Auction Citing High Tariffs

performance-bank-guarantees

Get the most relevant India solar and clean energy news.

RECENT POSTS