SECI solar tender for 500 MW in Maharashtra draws weak interest

Jan 19, 2016 16:15 CET by Plamena Tisheva

January 19 – A 500-MW solar tender by Solar Energy Corporation of India (SECI) in the state of Maharashtra has received muted interest, consultancy Bridge to India said Monday.

Fourteen developers have submitted bids in the tender, representing capacity of less than 1.8 GW. This is a highly subdued response when compared to recent allocations by power producer NTPC and some states, the consultancy said.

The conditions of the SECI tender include a fixed power purchase tariff of INR 4.43 (USD 0.065/EUR 0.060) per kWh, Viability Gap Funding (VGF) of up to INR 10 million per MW for the 450 MW not reserved for modules meeting domestic content requirement, land to be procured by developers, and a minimum project size of 10 MW. Bidders will be picked on the basis of most competitive VGF quotes.

The fixed tariff has been slashed by the Indian Ministry of New and Renewable Energy (MNRE) from INR 5.43 per kWh in light of recent bids of INR 4.63 per kWh in other tenders.

According to the consultancy, in the SECI tender there are two key factors that could lead to a higher tariff or VGF expectations for developers. These are the challenges related to land acquisition, especially for large projects, and the market’s higher risk perception of SECI as an off-taker in comparison to NTPC.

Bridge to India also expects muted interest in SECI’s other tenders in Uttar Pradesh, Gujarat and Andhra Pradesh, bids for which are expected to be received over the next two months, due to various reasons such as smaller project sizes or the low radiation in Uttar Pradesh.

Meanwhile, the Hindu Business Line reported on Tuesday that solar tariffs in India have fallen to a new low after Finnish firm Fortum Finnsurya Energy won a 70-MW project in a NTPC tender in Rajasthan with a bid of just INR 4.34 per kWh.

(INR 100 = USD 1.478/EUR 1.358)

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