After tepid response, SECI relaxes norms to lure bidders for 10 GW solar auctions

By: | Published: November 2, 2018 2:34 AM

Through the scheme, as much as 3 GW of cumulative annual solar manufacturing units are seen to be set up over three years, resulting in 10 GW of new generation capacities.

 

Earlier, SECI had cut the requisite bank guarantee amount by almost 25% to Rs 466 crore. The ceiling tariff for auctions had been cut to Rs 2.75/unit, from Rs 2.93/unit set earlier.

In the wake of cold response received from the industry towards the 10 gigawatt (GW) manufacturing-linked solar scheme, the Solar Energy Corporation of India (SECI) has amended the terms for bidders, allowing developers more time and flexibility to set up projects.
This is the fourth set of revision since its launch in June.

Through the scheme, as much as 3 GW of cumulative annual solar manufacturing units are seen to be set up over three years, resulting in 10 GW of new generation capacities. However, tepid industry response has been deferred the last date for receiving bids four times since the initial deadline of August 20.
As per the fresh amendments, inter-state transmission system (ISTS) charges would be waived for solar generation units commissioned within FY24, effectively extending the window to avail the benefit by two years from the original deadline of FY22.
SECI had earlier said ISTS charges would be waived under force majeure if delays were caused due to unavailability of adequate transmission charges. However, the new amendment does not specify if solar projects would have to pay ISTS charges if projects are commissioned after FY24 due to shortage of transmission systems.
Solar companies would now get 36 months, a year more than the timeline mandated earlier, for commencing commercial operations from their manufacturing units. They ‘should produce at least 80% of the installed capacity within first year and 90% of the installed capacity within second year’, the amendment document said.

SECI has also tweaked the minimum shareholding criteria for the bidders in the special purpose vehicles (SPVs) incorporated for executing projects under the tender. The new amendment says that if successful bidders enter into a manufacturing contract with any other entity, they cannot reduce their shareholding in the SPV below 26% till one year after the solar plants and manufacturing units are commissioned. SECI maintains that if no other entity is involved in the SPV, bidders need to keep a minimum 51% stake till the aforementioned period.
Earlier, SECI had cut the requisite bank guarantee amount by almost 25% to Rs 466 crore. The ceiling tariff for auctions had been cut to Rs 2.75/unit, from Rs 2.93/unit set earlier.

The scheme was launched to boost the domestic solar manufacturing industry, which was growing tepidly in spite of huge surge in solar generation capacity in the country. Solar developers sourced 88% of the products though cheaper imported component in FY18. To aid domestic manufacturing, the government has levied a 25% safeguard duty on import of solar cells — the basic ingredient needed to manufacture solar panels — for a year ending July 19, 2019.
The duty would be 20% for the next six months till January 29, 2020, and 15% in the subsequent six months.

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