SECI revises capacity for 5 GW solar manufacturing capacity linked with PPAs for ISTS solar connectivity

SECI has reduced the manufacturing capacity component for setting up 5 GW of solar manufacturing plants PPAs for Inter-State Transmission System (ISTS)-connected solar PV projects (for an aggregate capacity of 10 GW) in India on BOO basis to 3 GW. Reportedly, there is a possibility of developers quoting high tariffs for the capacity, which could make it unviable for discoms to buy power from these projects.

The bids for developing 5 GW of solar manufacturing linked with PPAs for ISTS-connected solar PV projects had been invited by SECI initially in May 2018. The solar power developers will be selected through tariff-based competitive bidding followed by an e-reverse auction. The interested developers are permitted to submit bids for a minimum of 2,000 MW capacity, pursuant to which a capacity to produce 600 MW of solar components must also be set up. Before the revision, the minimum manufacturing capacity was set at 1 GW. However, capacity for total power projects awarded will remain at 10 GW. The maximum tariff payable to developers has been reduced from Rs 2.93 per kWh to Rs 2.75 per kWh (excluding safeguard duty). Earnest money deposit and performance bank guarantee amounts have also been revised in line with the reduction in manufacturing unit sizes.

The scope of work involves setting up the manufacturing unit, the solar PV projects, as well as the transmission network up to the interconnection or delivery point. The allocated solar power plant capacity will be commissioned in a phased manner under Package I and Package II from the date of issuance of LoA. The successful bidders will be required to commission minimum 40 per cent (Package I) of the cumulative allocated capacity within 21 months and the balance capacity (Package II) within 36 months from the date of letter of award (LoA). SECI will enter into a PPA with the successful bidders for a 25-year period within 90 days from the date of issue of LoA.

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