Overwhelming response to SECI, 2 GW, ISTS (Tranche-IX) solar tender
Solar Energy Corporation of India’s (SECI) tender for 2 GW of Interstate Transmission System (ISTS) connected Solar PV Project under tranche IX has received an overwhelming response from the project developers resulting into an over-subscription by about 2.35 GW. The tender received bids of total 4,350 MW solar capacity from 12 project developers. SECI floated this tender in the month of March 2020. But, due to COVID lockdown, its bid submission deadline got extended till June 22, 2020.
Figure 1: Tentative list of bidders for SECI, 2,000 MW, Solar, ISTS, Tranche-IX tender
Source: JMK Research
This is the first major tender by SECI where bid submission is conducted after almost a gap of four months due to COVID-19. This has also been the first tender after the MNRE announcement of the removal of ceiling tariffs for wind and solar tenders. THE minimum CUF condition for this tender is 17% and the commissioning timeline is 18 months. Reverse auction for this tender is expected by next week.
In this tender, some new names can be seen which were not active in the last few solar tenders like SolarPack and ENEL. NTPC and NLC are two central public sector undertakings (CPSU) that are continuously building their solar project portfolio and are now actively participating across all major tenders.
Apart from this 2 GW tender, additionally there are about 18.2 GW of SECI tenders where bid submission date is before July 31, 2020.
Figure 2: SECI tenders where bid submission date is before July 31, 2020
Source: SECI, JMK Research
July 2020 is a critical month for solar project developers as new form of duties in form of Basic Custom Duties (of upto 20%) are likely to be notified before the lapse of safeguard duty (15%) by July 31, 2020. With ongoing China border issues, it is likely that 20% of BCD will be applicable now on imported solar modules instead of earlier expected staggered implementation of BCD starting from 10% in initial years to gradually to 20%. This will increase the solar project costs as module prices will increase. However, for projects where auctions are already completed before the notification of BCD, these projects will be protected under the ‘grandfathering’ clause.