Summary of Tariff Bidding Process for Solar Projects under NSM

January, 2011
0

INTRODUCTION
Under the National Solar Mission (NSM), the total aggregated capacity of grid connected Solar Projects in Phase 1 shall be 1000 MW. The deployment of Solar PV and Solar Thermal projects shall be in the ratio of 50:50. The mission has designated NTPCs Vidyut Vyapar Nigam Limited (NVVN) as the nodal agency for procurement of solar power. On 18th August 2010, NVVN invited Request for Selection (RfS) from interested developers to develop 150 MW solar PV projects with a capacity of 5 MW each, and 500 MW solar thermal projects with a minimum capacity of 5 MW and maximum of 100 MW each. The last date for receiving the RFS was September 24, 2010. NVVN received 418 RfS from both PV and solar thermal project developers. Out of the total of 418 requests, 343 were applications for solar PV and 55 for solar thermal. They received five requests for developing combined thermal and PV projects. As the total capacity of the shortlisted projects were in excess of the approved capacity of 150 MW Solar PV Projects and 500 MW Solar Thermal Projects, bidders were required to submit proposals offering maximum discount on the CERC approved applicable tariff for grid connected solar power projects for FY 201011.The last date for the submission of proposal was November 16, 2010. The bid opening process was held at 3 PM, November 16 2010. This document summarizes the results of the same.

Page

SOLAR PV NVVN received 299 bids from project developers indicating discounts offered by each over CERC determined tariff of INR 17.91. Majority of the bids were between 300p and 500p. There were 69 bids which bidders decided against developing solar projects. This may be because of the lack of return on investment or lack of adequate knowledge to set up solar projects.

Figure 1: Distribution of Discount offered for Solar PV Projects

Since, the target allocation was 150 MW, only the top 30 discounts were finally selected to set up solar power projects. The cutoff discount was 515p.The following table lists the shortlisted projects. S.N. 1 2 3 4 5 6 7 8 9 10 11 12 13 Application No. 411 198 368 380 302 359 20 81 399 429 245 72 114 Project Developer Camelot Enterprises Private Limited Khyaya Solar Projects Private Limited DDE Renewable Energy Limited Electromech Maritech Private Limited Vasavi Solar Power Ltd Firehope Allied Energy Limited Karnataka Power Corporation Limited Newton Solar Private Limited Greentech Power Private Limited Sai dham Overseas Private Limited Mahindra Solar One Private Limited Azure Power Rajasthan Projects Limited Ritwik Projects Private Limited Discount(in paisa) 696 641 636 631 626 626 622 621 621 616 602 597 594 Location Maharashtra Rajasthan Rajasthan Rajasthan Rajasthan Rajasthan Karnataka Rajasthan Rajasthan Rajasthan Rajasthan Rajasthan AP

Page

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

119 74 188 412 144 115 355 54 314 411 263 357 289 170 19 419 97

Electrical Manufacturing Company Limited SaiSudhir Energy Limited Maharashtra Seamless Limited Viraj Renewable Energy Private Limited Northwest Energy Private Limited SunEdison Energy Private Limited Alex Spectrum Radiation Private Limited Indian Oil Corporation Coastal Projects Limited Welspun Solar AP Projects Limited CCCL Infrastructure Limited Alex Solar Private Limited Punj Lloyd Infrastructure Limited Bhaskar Green Power Private Limited Oswal Woolen Mills Limited Amrit Animation Private Limited Precision Technik Private Limited

592 591 567 554 553 552 542 537 531 527 521 519 518 517 516 516 515

UP AP Rajasthan Rajasthan Rajasthan Rajasthan Rajasthan Rajasthan Karnataka AP TN Orissa Rajasthan Rajasthan Rajasthan Rajasthan Rajasthan

Table 1: List of shortlisted Solar PV Bidders

The shocking part was that majority of the established players were not able to win the bidding process and many of the new entrants dominated the list of new entrants. The following table enlists some major entities which were not able to win: Bidder Name GAIL & Engineers India Limited AP Power Generation Corporation Limited Maharasthra State Power Generation Company Limited SAIL ONGC IL & FS NMDC Limited
Table 3: List of Not Selected Major Government Entities

Discount Offered (In Paisa) 435 358 291 218 120 0 341

Page

Bidder Name Moserbaer Power Generation Limited Solar Semiconductor Private Limited Titan Energy System Limited
Table 2: List of Not Selected Major PV Manufacturers

Discount Offered (In Paisa)

391 268 0

Bidder Name Jain Irrigation System Limited Soma Enterprises limited Orient Green Power OPG Energy Private Limited Green Infra Solar Farm Limited Abengoa Solar India Private Limited Shapoorji Pallonji Solar PV Private Limited Astonfield Solar (Ajmer) Private Limited DLF Utilities Limited Entegra Limited Sunborne Energy AP Limited
Table 4: List of Not Selected Major Private Entities

Discount Offered (In Paisa) 499 466 402 376 304 269 200 0 0 0 0

Page

SOLAR THERMAL NVVN received 66 bids from project developers indicating discounts offered by each over CERC determined tariff of INR 15.31.Majority of the bids were below 300p. Like in the case of Solar PV bids, there were a number of (17) bids which offered zero discount.

Figure 2: Distribution of Discount Offered for Solar Thermal Projects

Since, the target allocation was 500 MW, only the top 8 discounts were finally selected to set up solar power projects. The cutoff discount was 297p. The following table lists the shortlisted projects. S.N. 1 2 3 4 5 6 7 8 Application No. 278 392 307 122 425 29 322 376 LANCO KVK Energy Megha Enggineering & Infrastructure Limited Raj SunTechnis Private Limited Aurum Renewable Godavari Corporate Ispat & Alloys Limited The Indure Projects Limited Name of the Bidder Capacity 100 100 50 100 20 50 50 50* Discount (in paisa) 482 411 400 334 312 311 307 297 Location Rajasthan Rajasthan AP Rajasthan Gujarat Rajasthan Rajasthan Rajasthan

Table 5: List of Shortlisted Solar Thermal developers

Page

*Since the target capacity is 500 MW and aggregate capacity of first seven projects is 470 MW, Indure Projects will be allocated 30 MW in place of 50 MW. Like Solar PV, many established players have not been able to win. New entrants have dominated the list of the successful candidates. The following table enlists some major entities which were not able to win:

Bidder Name

Capacity (MW) 50 25 50 100 50 50 50

Discount Offered (In paisa) 285 194 181 153 151 37 64

Welspun Renewable Energy Limited Coromandel Infrastructure Abengoa Essar Power Limited ACME Telepower Limited Sapoorji Pallonji Gammon Renewable
Table 7: List of Not Successful Major Private Entities

Bidder Name

Capacity

Discount Offered (In paisa) 219 1 0

GAIL Maharashtra StatePower Generation Corporation Limited ILFS

Table 6: List of Not Successful Major Government Entities

50 50 10

Page

WAS PROJECT LOCATION AN ADVANTAGE?

As shown in the graph below, 70 percent of the shortlisted PV projects and 75 percent of shortlisted thermal projects were from Rajasthan. Clearly, the state with its very high solar radiation levels helped bidders offer more discount in comparison to other states.

Figure 3: State Wise Shortlisted PV Projects

Figure 4: State Wise Shortlisted Thermal Projects

Page

CONCLUSION A total of 30 Solar PV developers aggregating upto 150 MW and 8 Solar Thermal Developers aggregating upto 500 MW have been shortlisted based on maximum discount offered on CERC determined tariffs. The cut off discounts offer were 515p and 297p for Solar PV and Thermal projects respectively. The state of Rajasthan with its immense solar radiation potential and availability of large traces of wastelands was the preferred choice for developers. In both Solar PV and Solar Thermal, new entrants dominated the list of the successful candidates. Many established players have not been able to win. Has there been an aggressive bidding by fresh players who probably lack adequate knowledge about the solar industry or were the established players too aggressive on required returns? Let time be the judge!

Page

Page