Manufacturing-linked mega tender set for more tweaks

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In June, the Solar Energy Corporation of India (SECI) invited bids to establish 2 GW of annual PV manufacturing capacity in the country by offering the incentive of 6 GW of solar project capacity.

Under the terms of the procurement, successful bidders will secure 3 MW of generation capacity – including power purchase agreements – for every megawatt of solar production capacity they commit to establish.

The exercise attracted global interest but critics say it lacked clarity on certain issues and SECI has now extended the deadline for bids to enable it to make changes to the tender rules after developer feedback.

“We are very keen to participate in this tender,” said a spokesperson for Indian PV developer ReNew Power. “However, there are certain issues like manufacturing plants’ commercial operation date delay [penalties]; part commissioning [of] manufacturing capacity; and power evacuation [plans] that require more clarity. We have made some suggestions and requested SECI to make these changes in the RfS [request for selection tender] document.”

SECI has not confirmed which of the suggestions made by developers will be incorporated into the revised tender.

Manufacturing get-out clause

ReNew Power asked for power purchase agreements (PPAs) to be honored even if bidders fail to produce the manufacturing facilities they commit to and also suggested bidders be given three years, rather than two, to commission factories after the date any PPA starts.

Criticizing the 24-month factory commissioning timeline as too short, ReNew Power said: “The initial 12-15 months will go towards meeting respective state authorities [and] discussing the incentive and facilities offered, and also on [producing a] detailed project report, land acquisition, permits and approvals only after selection of [a] state.”

Referring to the classification of solar manufacturing as a polluting industry, the developer’s statement to SECI added: “With cell manufacturing coming under [the] red category within environmental clearance, it would take at least 12 months to complete the clearance process, post acquisition of land. Hence the actual construction can start only after 24-27 months. The project construction will in itself take at least 9-12 months, followed by [a] commissioning period of three months.”

Cap on bidder capacity

Another concern centers on the penalty regime for delayed commissioning of solar manufacturing facilities. The maximum penalty that could be imposed under the tender rules is Rs900-1,000 crore, around 50% more than the cost of the cell and module production lines themselves.

Developers have also asked SECI to extend the commissioning period for setting up solar generation capacity to at least four years; to exempt the projects concerned from interstate transmission charges; and to provide clarity on evacuation networks, particularly in high solar insolation areas such as Rajasthan and Gujarat.

A cap on the amount of solar generation and manufacturing capacity each bidder can apply for has also been suggested.