ACME, SEI, Azure bag projects; Shapoorji Pallonji, Welspun fall short
New Delhi, February 21:
Private companies such as SEI, Azure Power India and ACME have won most of the solar projects auctioned under the first batch of Phase-II of the National Solar Mission.
The financial bids for 750 MW new photovoltaic capacities were opened on Friday.
SEI and Azure Power bagged 100 MW of projects each, while ACME got nearly 80 MW of new capacities.
Other companies that bagged projects include Tata Power Renewable Energy (35 MW), IL&FS Energy Development (40 MW), Solairedirect Energy India (30 MW), Gujarat Power Corporation (10 MW), Hero Solar Energy (20 MW) and Today Homes and Infrastructure (40 MW). Among those who failed to bag any projects were Welspun Renewables Energy, Shapoorji Pallonji Solar and Renew Solar Power.
The latest bidding saw a good response for more than 120 projects from nearly 68 companies. Of these, five companies were disqualified on technical grounds and 63 were asked to submit price bids.
Companies such as SEI and ACME bid under different subsidiaries.
Speaking to Business Line, Tarun Kapoor, Joint Secretary (National Solar Mission) in the Ministry for New and Renewable Energy, said: “Allotments are expected to be completed by next week, once the Board of the Solar Energy Corporation of India has approved the qualified bidders.”
The winners will be given a month’s time to sign power purchase agreements.
The solar projects have to be completed within 13 months of the date of signing of the agreements.
After the bidding process was done, Manoj Kumar Upadhyay, Chairman of ACME Solar, said: “This has further strengthened our position as the leading solar power producer in the country.”
ACME Solar is a joint venture involving ACME, France-based EDF Energies Nouvelles (EDF EN) and Luxembourg-based EREN. The venture has an existing portfolio of 67.5 MW and is aiming at a solar power generation portfolio of 1,000 MW by 2017.
In the second phase, the Government has offered projects under two batches of 375 MW each. In the first batch, developers must procure equipment from domestic manufacturers; in the second, there are no such restrictions.
Azure grabbed the maximum projects under the first category, while ACME emerged as the largest developer in the open category.
Acme (Gurgaon, India), Azure Power (New Delhi) and SunEdison (St. Peters, Missouri, U.S.) will receive the largest shares of projects under phase 2, batch 1 of India’s National Solar Mission (NSM), according to an initial report by Bridge to India (New Delhi).
Solar Energy Corporation of India (SECI) opened the financial bids for the allocation of solar photovoltaic (PV) projects under phase 2 batch 1 on February 21st, 2014. 750 MW of projects were selected starting with the lowest bids for Viability Gap Funding (VGF), with 375 MW reserved for projects using domestically produced equipment.
All told, 122 project bids were received from 58 developers. Bridge to India reports that four bids were canceled for failing to meet “techno-commercial” criteria, and the bid by Moser Baer (New Delhi) was canceled as the bank guarantee was not provided.
Highest winning bid at USD 230,000 under open category
Tata Power Solar (Mumbai) submitted the highest winning bid at INR 24.5 million (USD 400,000) for the domestic content category, and the highest winning bid under the open category was INR 13.5 million (USD 230,000).
Bridge to India has named Belectric (Mainz, Germany), SolaireDirect (Paris), Waaree (Mumbai) and IL&FS (Mumbai) among the other developers likely to be awarded projects. The company also states that First Solar Inc. (Tempe, Arizona, U.S.) and Renew Power (Gurgaon, India), which is backed by Goldman Sachs (New York City), will probably not get projects.
Bridge to India notes that most of the developers have chosen locations in Gujarat or Rajasthan, the two leading states for solar deployment in India.
Projects under domestic content requirement much more expensive
In total, the Indian government will now have to pay INR 97 billion (USD 1.6 billion) for projects under the open category, but INR 160 billion (USD 2.7 billion) for projects under the domestic content requirement (DCR) through the VGF mechanism.
“The question now is: is the extra INR 63bn (USD 1.1bn), which translates to an additional expense of 65% incurred by the government, for the DCR-based projects money well spent?” asks Bridge to India. “Or – since the goal was to support domestic manufacturers – should it have rather gone into a direct support for manufacturers?”
The policy is also not popular in the United States. Earlier in February 2014, the nation challenged India’s domestic content requirement with a World Trade Organization (WTO) case.
Mumbai, February 14:
The Maharashtra Government can ill-afford to harness solar power with the current tariff structure that cross-subsidises low-end consumers by charging high-end users more.
Speaking at a discussion on grid connected solar rooftop systems, Ajoy Mehta, Principal Secretary, Energy, Maharashtra, said that against a procurement cost of ₹3.30-3.50 a unit of conventional energy, the Brihanmumbai Electricity Supply and Transport Undertaking at the lower end charged ₹3.50/unit and for large commercial consumers, ₹11/unit.
Across the State, the tariff for agriculture is ₹1 a unit.
The revenues earned from the higher tariff levied on large consumers provided ₹9,600 crore, of which, the shortfall caused by agriculture supply accounted for ₹6,500 crore. ₹1,000 crore went to subsidise low-end users (between 0-100 units consumers) and the balance took care of public supply such as street-lighting. This apart, there were costs involved in providing transmission lines and connectivity.
If the procurement cost of grid-based solar energy was ₹6-7/unit, then the commercial and industrial consumers need to be taxed more, which made grid-based solar energy unviable for procurers or power distribution companies.
Also, there were issues of grid parity pricing and cost of standby power. “I need solutions to the issues,” Mehta told the gathering, which was chaired by Farooq Abdullah, Minister for New and Renewable Energy. Abdullah said if the country wanted to be progressive and not be a slave to petrol- and coal-producing countries, then focus has to be on solar energy.
“In line with our national target, we are in the process of setting diverse solar projects across the country.
“These include a 4,000 MW solar project close to salt water lake in Rajasthan. In remote areas such as Ladakh, transmission lines are being set up to take power generated from solar projects to various villages. We have been running a pilot project to assess the viability of large-scale grid-connected rooftop solar projects and the run has been successful so far,” he added.
Andhra Pradesh will soon sign power purchase agreements with solar photovoltaic project developers under the State’s solar power policy a top Government official said.
“The letters of intent have been issued to the developers and PPAs will be shortly signed. We expect at least 500 MW capacity to come up by early next year under the State solar policy,” said M Sahoo, Special Chief Secretary, Department of Energy.
“We are trying to sort out the evacuation issue which will enable solar power plants to function normally even in areas where there is no power supply,” he added.
Referring to the demand-supply mismatch, he said the Government plans to generate an additional 200 MW using naphtha and 500 MW using LNG. Some of the concerns expressed by them (developers) in terms of evacuation of power in rural areas are being addressed, and we expect to resolve them through a representation to the AP Electricity Regulatory Commission,” Sahoo pointed out.