Solar surge slows in India with re-launching of tenders

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In the past week, state government agencies of both Karnataka and Maharashtra, located in the south-west and west of India respectively, have re-launched solar tenders due to poor initial responses.

Karnataka Renewable Energy Development Ltd (KREDL) issued a tender for 1,200 MW in January this year but only received bids for 550 MW, for which PPAs were awarded in March. The agency is now re-tendering the remaining 650 MW of solar capacity, which is to be installed in the Pavagada solar park in the state.

The capacity will be awarded in 50 MW blocks, with interested parties invited to bid for projects with a minimum capacity of 50 MW and a maximum of the entire 650 MW. Successful bidders will sign 25-year Power Purchase Agreements (PPAs) with distribution companies (DISCOMs) operating in Karnataka and develop the projects on build, own and operate (BOO) bases.

Furthermore, the Maharashtra State Electricity Distribution Company Limited (MSEDCL) has re-launched a 1000 MW solar tender which was originally issued in December 2017. The submission deadline was postponed from January to March due to a lukewarm response from developers, before the tender was cancelled altogether.

Interested parties are now invited to bid for either: projects located within Maharashtra with a minimum capacity of 5 MW at a single location; or projects located in other states with a minimum capacity of 50 MW at a single location. MSEDCL shall enter into 25-year PPAs with the bidders selected.

A key factor in the initial failures of these tenders is the ongoing uncertainty around proposed taxes on critical components of solar projects, which have made it difficult to forecast project costs and deterred developers from bidding.

Although, these issues have not discouraged the authorities. MSEDCL recently issued a Request for Expressions of Interest (RFEOI) for a 1000 MW floating solar power plant to be located on the Ujjani Dam water reservoir in the Solapur district of the state. The successful bidder will sign a 25-year PPAs with MSEDCL.

For more information on all of these tenders, see the Business Opportunities section of our website.