National Solar Mission: bidders quote low tariff, bag projects

Wednesday 07 December 2011

Lowest bid in second batch of solar energy projects was for Rs7.49/unit

The way the Jawaharlal Nehru National Solar Mission is making progress, it is expected that solar energy will soon be as cheap as energy from conventional sources. At least, that is what emerged from the second batch of bidding under the National Solar Mission held on December 2 for 350 MW capacity. The lowest bid was for Rs7.49 per unit, which is 50 per cent lower than the benchmark tariff of Rs15.39/unit fixed by the Central Electricity Regulatory Commission (CERC). 

Bidding became, as expected by some, very fierce and the lowest bid of Rs7.49 per unit was made by Solairedirect India, a subsidiary of a French company. Green Infra Solar made the last highest successful bid at Rs9.44 per unit.

B Bhargava, director with the Ministry for New and Renewable Energy (MNRE), says this is a big step towards grid-parity (parity with tariff for energy supplied through the national grid) for solar energy in India.

The average price for the winning bids came to Rs8.78/KWh. The lowering of bid prices could be because the price of solar modules, which make up 50-65 per cent of the cost of a solar power project, have fallen continuously since 2008. Gaurav Sood of Solairedirect India says his company will opt for “crystalline technology from a domestic producer and the plant will be set up in Pokhran area in Rajasthan”. 

On path to achieving grid-parity

During the bidding itself, A K Maggu, additional general manager in charge of the solar mission at NTPC Vidut Vyapar Nigam (NVVN)—the nodal agency—stated that some developers might complain about low margins. “But the Indian model of bidding has been adapted by many other countries, we have heard that California is following our example. We are lowering the price of solar power rapidly.”


A large majority of the project developers opted for Rajasthan; just two projects are proposed in Maharashtra (25 MW total) and only one project each in Tamil Nadu (10MW) and Andhra Pradesh (20 MW) (see chart below). One unnamed bidder says, “Rajasthan is perfect for solar power, the (solar) radiation is great.”

Low bids add to uncertainty

Other successful bidders in batch II include Azure Power India, which took home 35 MW of capacity at a discounted tariff of Rs8.21 per unit.

capacityWhen asked whether the bid price is'nt too low, Inderpreet Wadhwa of Azure Power India responded: “No, not at all, this is where prices are in Europe.” Azure Power uses US Manufactured thin-film solar panels and is financed by the US Exim Bank and the International Finance Corporation (IFC). Down To Earth (DTE) has earlier reported on the import of solar equipment under the national solar mission.

On the other hand, Bhavana Gupta, project coordinator of Sky Energy—one of the bidders who did not succeed—says, “these people (successful bidders) ruined the bids, they will not be able to run the projects at these rates.”

There are, however, steep fines if a company does not finish its project in the allotted 13 months from the date of signing the contract. A substantial bank guarantee has to be given, which is taken away gradually over a period of three months if a project is delayed. Depending on project cost, the penalty, by way of loss of bank guarantee, would make up 24 to 43 per cent of the cost for bidders giving the highest discounts while for projects giving discounts in the lower range, the penalty would amount to 17 to 30 per cent. For the first batch of PV projects, the deadline is January 9, 2012. So, stakeholders will soon get to know whether the fines are high enough to coax the developers into meeting project deadlines. DTE had earlier reported that some projects may be delayed. Alex Spectrum Radiation, which had not started working on its project even by mid-October (with a deadline of January 9, 2012), took part in the bidding but was disqualified as it failed to furnish some original documents along with the bid. 

Many of the larger players in solar were completely absent—Tata BP Solar put in no bid and Lanco Solar made an unsuccessful bid under the name Omega Solar Projects.
 

Lowest bidders for the 350 MW capacity of PV solar power alloted
Name Resulting Tariff
(in Rs/unit)
Capacity
(in MW)
Location Total bank-
guarantee
needed
(in crore
rupees)
Remarks
Solairedirect India 7.49 5 Rajasthan 16.7 Indian subsidiary of French company
Welspun Solar A.P. 7.97/
8.05/
8.14
20/15/15 Rajasthan 154.8 Indian tubing and textile company diversifying into Solar. Has 5MW Batch 1 project
Azure Power India 8.21/8.21 20/15 Rajasthan 105.4 Pioneering Indian solar company. Has 5MW Batch 1 project
Saisudhir Energy ltd. 8.217 20 Andhra Pradesh 60.2 Infrastructure company. Partly funded by US based Global Environment Fund. Has Batch 1 project
VS Lignite Power 8.28 5 Rajasthan 14.9 Part of KSK Energy Ventures -
Jakson
Power
8.44/
8.74
10/10 Rajasthan 58 Possibly part of Jakson group—
manufacturer of diesel generator sets.
Symphony Vyapaar 8.48 10 Rajasthan 28.8 Not known
Lexicon Vanijya 8.69 10 Rajasthan 27.7 Not known
Shree Saibaba Sugars 8.73 5 Maharastra 13.8 Sugar factory
LEPL Projects 8.91 10 Rajasthan 26.6 LEPL is a construction and infrastructure company with some experience in wind power
Sunborne Energy 8.99 5 Rajasthan 13.1 Gurgaon based solar company with plans for solar thermal plant in Gujarat. Funded by Khosla Ventures
Sujana Towers 9.09 10 Tamil Nadu 25.7 Connected to Sujana Group, engaged in infrastructure and power, including solar manufacturing
Fonroche Energies 9.1 20 Rajasthan 51.4 French photovoltaic producer
NVR Infrastructure 9.16 10 Rajasthan 25.4 Not known
Enfield Infrastructure 9.16 10 Rajasthan 25.4 Not known
Essel Infraprojects Ltd 9.27 20 Maharastra 49.7 Erection, testing and commissioning company for electrical projects and steel
SEI Solar Power 9.28 20 Rajasthan 49.6 SunEdison India—part of US solar company SunEdison, it in turn being part of MEMC—a  semiconductor company
GAIL 9.32 5 Rajasthan 12.3 Gas Authority India Limited—an Indian public company
Mahindra Solar One 9.34 20/10/11 Rajasthan 73.4 Indian conglomerate with a 5 MW project under batch 1
Kiran Energy 9.34/9.34 10 Rajasthan 24.5 Solar company funded by venture capital, including New Silk Route
Green Infrastructure Solar 9.39 20 Rajasthan 48.5 Possibly related to IDFC funds-backed Green Infra—an Indian renewable energy company
Green Infra Solar Projects Ltd 9.44 20 Rajasthan 48 Possibly related to IDFC funds backed Green Infra—an Indian renewable energy company
*The successful bidders will be put through another round of screening of financial closures

 

 

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Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.

  • Information about the unknown

    Information about the unknown companies:

    1) Symphony Vyapaar and Lexicon Vanjiya - SPVs of Vikram Solar Pvt Ltd, manufacturer and EPC player in the solar industry.

    2) NVR Infrastructure - SPV of Atha Group, invloved in iron ore mining and production.

    3) Enfield Infrastructure - SPV of Sonthalia Group, currently planning a venture into manufacturing of PV modules.

    If you think any of the above information is incorrect please let me know via email.

    Posted by: Anonymous | 6 years ago | Reply
  • The statistics provided above

    The statistics provided above are not 100% accurate. I'v cross-checked it from a list released by NTPC VVNL. For ex: Green Infra has bagged 20MW and 5MW in Rajasthan as per NTPC and not two project of 20MW each. There are some more.

    Posted by: Anonymous | 6 years ago | Reply
  • what is the execution status

    what is the execution status of the projects allotted in November 2010 under National Solar Mission (NSM)?

    Posted by: Anonymous | 6 years ago | Reply
  •  Thank you very much for

     Thank you very much for adding this. Information in the table what was I could find in the public domain. This is very useful and apprciated.

    Posted by: Jonas Hamberg | 12 months ago | Reply
  •  Thank you for your input. We

     Thank you for your input. We will check this again. The list was made just after the bidding and before NVVN released the final list. Are there more issues than the one you brought up? I would be happy to fix the issues.

    Posted by: Jonas Hamberg | 12 months ago | Reply
  •  Please see these two

     Please see these two articles for some update:


     http://www.downtoearth.org.in/content/lanco-found-guilty-false-commissioning-plants


    http://www.downtoearth.org.in/content/solar-trick


    We have not gotten the exact list as NVVN is vary of giving it out. For the third period of delays (not commissioned by March 9th) MNRE is stating that CCCL, Rithwik, KPCL and one other project has had their full bank guarantee encashed.

    Posted by: Jonas Hamberg | 12 months ago | Reply
  • Hi Rohan, Thank you for the

    Hi Rohan,

    Thank you for the information, do you also happen to know who Kimya Power Systems is? They have a big solar power plant in Karnataka but I have no idea where this company is based.

    Regards,
    Puneet.

    Posted by: Anonymous | 5 years ago | Reply
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