Manufacturing-linked solar scheme: Bids deadline extended to October 12

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New Delhi | Updated: September 28, 2018 5:07:47 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 generating capacities.

solar energy, solar schemeThe original deadline was August 20 and there were three extensions earlier.(Reuters)

The Solar Energy Corporation of India (SECI) has extended the deadline for receiving bids for the government’s manufacturing-linked solar scheme to October 12. A senior SECI official told FE that the postponement was done “on the request of few bidders”.

The original deadline was August 20 and there were three extensions earlier.

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 generating capacities.
The scheme was introduced to boost domestic solar manufacturing, where developers would be provided with assured power purchase agreements (PPA) against the capacity of solar module manufacturing plant they set up in the country.

“The scheme’s terms and conditions do not apportion the risks appropriately and we have asked SECI to look into these aspects,” an official from a potential bidder said on conditions of anonymity. “It would be difficult to source financing for the scheme because it is more difficult to get funding for setting up solar manufacturing plant, compared with solar development projects,” the person added.

To make the scheme attractive to developers, SECI has already eased a number of norms for firms potentially participating in the bids. Under the new amendments, the amount of bank guarantee to be submitted by the developers have been reduced by almost 25% to Rs 466 crore. The ceiling tariff for the auctions has also been cut to Rs 2.75/unit, instead of the Rs 2.93/unit set earlier. A single bidder can now bid for a minimum 600 MW manufacturing capacity, instead of 1 GW mandated earlier, to win 2 GW of solar power supply contracts.

SECI is currently discussing the scheme with the state authorities of Chhattisgarh, Andhra Pradesh, Karnataka and Uttar Pradesh. As FE reported earlier, as many as 29 companies participated in the pre-bid meeting for the scheme held in June. Participants of the meeting included representatives from Adani Green Energy, SoftBank Group’s SB Energy and global solar giant GCL.

To boost domestic manufacturing of solar component, 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. Solar developers, who source 88% of the products though cheaper imported component, have expressed their fears of rising project cost amid the lack of inadequate domestic production capacity.

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