From pv magazine India.
Allaying fears the Solar Energy Corporation of India (SECI) may scrap its much-hyped 10 GW manufacturing-linked tender after six postponements and a tepid response from developers, the agency has decided to forge ahead with lone bidder Azure Power.
The Delhi-based developer that made headlines this year by matching India’s lowest solar energy tariff, has bid for a 2 GW project on a single site, as well as 600 MW of manufacturing capacity.
Though that means the mammoth tender has been under-subscribed by almost 75%, there will be no further extension or a cancellation of the exercise.
With a low tariff ceiling and the India-based manufacturing requirement big deterrents, all the other major industry players shied away from the tender, for which the last submission date was on Monday. Foreign developers also steered clear, says IHS Markit’s Dharmendra Kumar, put off by policy uncertainty and the imposition of safeguarding duty on panels imported by India from China and Malaysia.
Industry watchers expected SECI to again extend, or even to scrap the tender, after receiving only one bid. After the sixth postponement, a financial daily newspaper reported the final set of changes had already been made to the tender conditions, and the government was unlikely to further relax the terms.
Hybrid tender also disappoints
In May, SECI had tendered for 10 GW of solar projects with successful bidders having to offer a total of 5 GW of domestic solar manufacturing capacity. Later, the agency reduced the manufacturing capacity requirement to 3GW and the minimum project bid capacity from 1 GW to 600 MW.
Hit by a no-show by bidders at auctions this month, SECI then raised the ceiling price for the mega tender by 10 paise (INR0.01/$0.00014) to INR2.85 ($0.04) per unit.
Elsewhere, India’s first hybrid solar and wind tender – with a 1.2 GW capacity – was also undersubscribed, by 150 MW, with only Adani Green Energy (600 MW) and the Softbank-backed SB Energy (450 MW) bidding. The last submission date for bids was on Tuesday.
SECI had floated the tender in May, seeking bids for 2.5 GW of hybrid projects, with the size later whittled down to 1.2 GW.
IHS analyst Kumar told pv magazine SECI is planning to conduct tenders for a further 4 GW of solar between next month and February, and called for the government to incentivize domestic production so Indian manufacturers can increase their output and approach the level of their foreign peers on pricing and quality.
This article was amended on 22/11/18 to include the comments of IHS Markit’s Dharmendra Kumar.
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To develop manufacturing base , Govt. could have fix up feed in tariff rate model in parallel for PSU project of say2.8 to 3 per unit and issue PPA directly to domestic manufacturers (cell and panel ) depending on installed manufacturing (with some min capacities say 200MW and in lots ) capacities. Manufacturers intern could negotiate with developer and get solar panel supply contract and steady income (say 10 to 20 paisa per unit) from solar project for 25 years. This could have strengthened the existing domestic manufacturing base and encouraged them to expand their capacities. By this way developer would not find fault with domestic product , which was the case in DCR project.
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