Two Winning Bidders For SECI’s 1.2 GW Solar Tender

• Out of total 1.2 GW tendered under ISTS-V, SECI has selected only two winners awarding them 480 MW
• This capacity was secured by GT Jewellers that won 150 MW for INR 2.53 per kWh and SB Energy grabbed 330 MW for the ceiling price of INR 2.65 per kWh
• The tender was undersubscribed with only 600 MW worth of bids received, according to Mercom India

The Solar Energy Corporation of India (SECI) has awarded 480 MW of solar power capacity out of 1.2 GW tendered to two bidders. Local media reported SoftBank backed SB Energy secured 330 MW for INR 2.65 ($0.038) per kWh, which was the ceiling tariff. The remaining 150 MW was allotted to Chennai's GRT Jewellers for a tariff of INR 2.53 ($0.035) per kWh.

The tender was launched by SECI in June 2018 for the capacity to be set up anywhere in the country with connectivity to the interstate transmission system (ISTS)-V (see SECI Tenders 2.4 GW Solar With ISTS Connectivity).

Mercom India Research says the tender was undersubscribed as it attracted only 600 MW of total bids. As per tender rules, only 80% of bid capacity could be awarded, hence 480 MW has been allotted to the two bidders.

This isn't the first time SECI has received such lower participation to its tenders. For its 2 GW solar tender under the CPSU Scheme Phase-II, only five companies – all government entities – submitted bids totaling 1,068 MW in July 2019 (see SECI's 2 GW CPSU Tender Undersubscribed).

As several developers wait for the safeguard duty imposed on imported solar products to reduce to 15% between January 30, 2020 to July 29, 2020, post which it is to end before they can start building up their pipeline again, there is no doubt a dampening of investor sentiment ever since the duty was imposed (see 25% Safeguard Duty Imposed By India). It only gets exacerbated with discoms not paying generators on time, and now the Andhra Pradesh administration hell bent on renegotiating already executed power purchase agreements (PPA) with the previous government in the state. CRISIL warned in July 2019 that the renegotiation by Andhra Pradesh could negatively impact 5.2 GW of renewable energy capacity here exposing it to an estimated debt of over INR 210 billion ($3.04 billion) (see Andhra Pradesh's 5.2 GW RE Projects Under Stress).

SECI tender deadline extended

The poor response to its tenders seems to have prompted SECI to extend the bid submission date for three of its tenders. This includes 6 GW project development linked with 2 GW annual solar manufacturing tender whose last date was August 26, 2019 which has now been extended to September 11, 2019.

Another tender issued under CPSU Phase-II program with 1.5 GW capacity has its last date of bid submission revised to September 9, 2019. The third tender for 15 kW of solar PV paired with 50 kWh of lithium titanium oxide battery storage for Leh has also been pushed back with the revised date of bid submission being September 4, 2019.