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India plans ‘huge step up’ with large solar-plus-storage tender

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An Indian state-directed agency has launched three huge tenders across the country with various combinations of solar, energy storage, wind and hybrid concepts, in what the India Energy Storage Alliance has described as 'the long-awaited step'.

First, Solar Energy Corporation of India (SECI) announced a pan-India tender for 1.2GW of solar PV projects to be connected to the Interstate Transmission System (ISTS). It then announced a tender for 1.2GW of ISTS-connected solar to be combined with 3,600MWh of energy storage, followed by a third tender for 1.2GW of ISTS-connected wind-solar hybrid projects. The government has made it clear before that energy storage capacities can also be included in the hybrid projects.

The Request for Selection (RfS) documents for all three tenders will be released on 8 March.

Vinay Rustagi, managing director of the consultancy firm, Bridge to India, told PV Tech that at this stage, SECI is just issuing the notices and the tender documents are clearly not ready yet. It is likely that the rush is to circumvent the two-month policy hiatus that usually precedes a general election – likely to start from 5 March in this case.

Auction and tender activity has been frantic at the end of last year through to the present day and the backlog of solar tenders continues to pile up, even with capacity awards in Gujarat, Maharashtra and pan-India recently.

Last January, Rustagi warned that the tender flurry was over-ambitious, noting that of the 50GW of clean energy tenders last year, there were only around 20GW of allocations, as per the table below:

Credit: Bridge to India

Tender bonanza reality
Today, Rustagi said that nothing has fundamentally changed in the market and despite a number of auctions in the last two months, the field of winning bidders is “getting narrower and narrower”.

He added: “All the second and third-tier developers are struggling to raise money. It’s a pretty challenging environment, because of all the negative developments in the last year, whether on the tax front, cost of financing, interest rates, rupee rate etc.”

While all the announcements are likely to be part of a plan to fast-track approval from MNRE since the unique new tender parameters will have taken time to concoct, Rustagi noted: “The fact remains that India doesn’t need as much renewable power as the tender programme of the government suggests, and we've seen so many tenders being cancelled or undersubscribed.

“One hopes that quality of these schemes would not be compromised in the last minute rush.”

Yesterday, SECI even announced plans to tender for 1GW of solar in the mountainous and forest-covered Northeastern states and Sikkim, adding even more capacity to the pot.

Storage leap
On the plus side, the latest tenders also compound the long-awaited rise of energy storage tendering in India. Besides this week's issuances, seven tenders with a total storage capacity of 84MWh combined with 78MW of solar PV had been issued in the last 12 months, according to Bridge to India figures.

Rustagi described the new 1.2GW solar / 3,600MWh tender as “a huge step up”, given that clearly, the cost of power will be very high. However, it is difficult to comment without the full tender details on off-take and ceiling tariffs.

He also said it would be interesting to see what kind of government support may be added, such as viability gap funding (VGF), because Bridge to India believes that making the distribution companies (Discoms) bear the extra costs would be unrealistic.

Solar and storage tenders over the last year have been issued by SECI, NTPC and NLC mostly in remote areas of Ladakh, Lakshadweep, Himachal Pradesh and Andaman & Nicobar Islands. There have also been 760MW of new wind-solar hybrid tenders in Andhra Pradesh with the option of adding storage.

Bridge to India tabs the country's current grid-scale commissioned storage capacity at just 10.75MWh. 

Earlier this month, AES and Mitsubishi also inaugurated a landmark 10MW / 10MWh energy storage facility in Delhi.