BSNL has tendered for grid-connected rooftop based solar PV system scheme for BSNL Buildings in different zones of Maharashtra under the RESCO Model
State-owned telecommunications company Bharat Sanchar Nigam Limited (BSNL), has issued a tender, inviting bids from eligible bidders for the implementation of grid-connected rooftop based solar PV system scheme for BSNL Buildings in different zones of Maharashtra under RESCO Model from the approved vendors by Maharashtra Energy Development Agency (MEDA).
The scope of work for the selected bidders will include the site survey, design, and proposal for the highest power generation capacity plants of rooftop based solar schemes for BSNL buildings in Maharashtra under the RESCO model.
The projects will be developed under the Central Governments’ Jawaharlal Nehru National Solar Mission (JNNSM) which now has a target of 100,000 MW of grid solar power by 2022, out of which grid-connected rooftop Solar PV systems is considered as very potent area and has a target of 40,000 MW. To achieve energy security and for having good optics, BSNL is envisaged to develop solar rooftop projects on a large scale by utilizing vacant roofs of buildings and adjoining lands of the campus, etc.
Only Government of Maharashtra departments /establishment, government institutions including Ministries/ Departments/ Organisation of both Central & State Governments and PSUs interested to set up rooftop solar power projects under CAPEX /RESCO model can approach MEDA impaneled Solar Project Developers /System Integrators /RESCO’s.
The tender also lists the eight developers/system integrators/ RESCOs empaneled by MEDA for the development of solar PV power plants in RESCO mode for Government sector buildings in Maharashtra.
As per the terms of a RESCO deal, the SPDs will have to incur a 100 percent cost for the development of the project. The selected bidders can develop solar power plants in RESCO mode from above eight developers at a competitive tariff of Rs. 2.74 per kWh (>10- 100 kW) & Rs.2.7395 per kWh (> 100500 kW) fixed for 25 years.
The last date for bid submission is July 17, 2020, and the techno-commercial bids will be opened on July 18, 2020.
Move comes amid heightened border tensions with China
Indian Prime Minister Narendra Modi on Friday launched a solar power plant with the aim to stop reliance on imports from neighbors China and Pakistan
The 750-megawatt power plant in the central state of Madhya Pradesh is being dubbed as the largest in Asia by local media.
The project is expected to reduce carbon dioxide emissions by 1.5 million tons each year.
“Several steps are being taken to increase domestic manufacturing and it has been decided that government’s departments and institutions will only buy domestically manufactured solar cells and modules,” said Modi, in the wake of recent border tensions with China.
China is a major exporting nation of solar equipment to India. However, border clashes last month which resulted in the killing of 20 Indian troops have triggered a trade war between the two Asian giants.
In the virtual launch of the Rewa Ultra Mega Solar Power Project, Modi highlighted that India’s progress in the field of solar energy will garner international interest.
“Hopefully very soon India will be a major exporter of power. The International Solar Alliance was launched with the motive to unite the entire world in terms of solar energy.”
The project is a step toward India’s ambitious target of installing 175 gigawatts of renewable energy by the year 2022.
India outlines 20% customs duty on solar modules, cells and inverters from August 2020
India is set to impose a 20% levy on imported solar modules, cells and inverters from August, replacing the current safeguard duty.
Numerous local reports state the levy was proposed by Indian power minister RK Singh yesterday during a call with industry representatives, confirming that Prime Minister Narendra Modi’s government intended to impose a Basic Custom Duty (BCD) of 20% on imports.
That BCD, which comes as part of the ‘Make in India’ initiative designed at stimulating domestic manufacturing, would replace the existing safeguard duty of 15% set to expire on 29 July 2020.
The update serves as a confirmation of duties first teased within the Union budget earlier this year, which at the time set no particular timeframe for the introduction of such levies. It would also seem to remove any confusion over potential exemptions for components or equipment, as were suggested a month later.
It also comes amidst a push from India’s Ministry of New and Renewable Energy to rekindle domestic renewable manufacturing having witnessed imports struggle with logistics issues posed by the ongoing COVID-19 pandemic. In May the government said that it had designated solar PV manufacturing, as well as advanced battery manufacture as ‘Champion Sectors’ of national self-reliance and would be supporting both with incentives.
In addition, RK Singh also confirmed that an approved list of PV manufacturers for use in government-backed solar projects would be published in October this year, having been pushed back from the original date of April following the onset of the pandemic.
While expected, the news will come as a blow to Chinese inverter manufacturers which have come to dominate India’s rooftop solar inverter market, as research compiled by JMK Research & Analytics showed earlier this year.
Even though the fossil fuels sector has been completely ravaged by the coronavirus pandemic, the renewable energy sector has been more than chugging along. The results of a recently concluded mega solar tender in India provides further assurance on the continuing growth in the clean energy sector.
Adani Green Energy Limited (AGEL) and Azure Power have been declared to be the winners of the largest solar tender. This will result in the installation of 12 gigawatts (GW) of solar power generation and 3 GW per year solar manufacturing with an investment pegged at almost US $9 billion.
The tender, organized by the Solar Energy Corporation of India, was a first of its kind as it linked the installation of solar power plants with creating domestic solar manufacturing facilities.
To put this in perspective, India installed 7.3 GW in 2019.
Beyond increasing India’s solar generation assets, the tender also aims to jumpstart competitive solar manufacturing in India to reduce solar imports from China.
Solar Imports In India From China
Broadly speaking, the transition to solar power in India is aimed at three objectives — to reduce electricity costs, achieve a low carbon energy mix, and address its energy security by reducing energy imports.
On the last point there, strategically speaking, over-dependence on China for solar equipment is similar to the current case for oil with the Middle East, thereby subjecting the Indian economy to external geopolitical risks.
Recently there have also been several campaigns in India calling for a reduction in Chinese imports due to public outrage on the Indo-China border tensions.
For the past three financial years, FY17, FY18, and FY19, the total value (China and beyond) of the country’s solar imports was the US $3,196.5 million, $3,837.6 million, and $2,159.7 million, respectively. Within this, Chinese firms supplied about 80% of the solar cells and modules used in India.
In order to contain this, almost two years back, India imposed a 25% safeguard duty on solar imports from China and Malaysia. But the results have been a mixed bag. Some developers were reported to have started circumventing the duty by routing solar cells through Thailand and Vietnam.
Not only that, but a report by the Directorate General of Antidumping and Allied Duties, India observed that “unscrupulous elements are able to import the Chinese goods by circumventing the goods put under anti-dumping framework through misclassification of products.”
The search for loopholes will continue until there is a domestic competitive alternative to cheap imports from China.
Besides energy security, the indigenous manufacturing base in India would also help enforce performance contracts, build the foundations of domestic recycling industry, and not to forget, create jobs.
Tender Innovations by SECI
For quite some time now, the Solar Energy Corporation of India (on behalf of the Ministry of New and Renewable Energy) had been trying to push private sector investments to accelerate the manufacturing of solar PV in India. Its big idea was to bundle large scale solar power generation orders with the requirement to manufacture solar panels in the country.
The genesis of this interesting idea may have been in the bundling of solar and thermal power which had been done earlier to reduce the perceived costs of the former when it was more expensive. (On a tangent there, now that five years have zoomed by, there are talks of “reverse bundling.” That is bundling low-cost solar power with the more expensive coal power so that the latter can be sold. Ha!)
On the surface, combining solar generation and manufacturing seemed like a great idea. But the bid deadline had to be extended more than seven times with only one bidder interested.
You see, solar manufacturing businesses would require higher equity, while solar power generation projects are built using higher debt. So doing both is a difficult proposition for the project developers currently active in the market.
But with its eyes firmly on the target, SECI did not give up. To sweeten the deal and attract more participation, SECI made a number of changes in the initial bid design. Through a series of iterations several attractive options were added — a tariff of ₹2.93 for the generated power, Interstate transmission charges waivers, a greenshoe option, and others.
Will Solar Imports From China Fall?
After the tender results, in an interview with the Economic Times, Gautam Adani, Chairman of Adani Group, forecasted that the solar imports from China would fall and become negligible over the next 3-5 years. He added,
You have to realize that you need to pay some more price to build up the capacity. So as a country, we have to be prepared to pay a little more for self-reliance. How to pay? The government cannot give cash incentives, so there has to be policy intervention such as to safeguard duty, anti-dumping duty, customs duty.
– Gautam Adani, Chairman, Adani Group
However, he attributed the current additional costs as a short term burden to build self-reliance.
Interestingly, while AGEL has now expanded its operations and pipelines solar power generation assets to 15 GW, its sister company Adani Power Limited is the largest private thermal power producer in India with an installed capacity of 12.5 GW.
AGEL had also developed the then world’s largest single location, the 648 MW Kamuthi Solar Power Plant in Tamil Nadu, India.
So, how much can India expect to save by cutting down solar imports from China?
India has achieved about 35 GW of its current solar target of 100 GW by 2022 with a pipeline of 23.7 GW utility-scale projects under development and another 31.5 GW of tenders pending auction. In fact, as per several media reports, India has now pushed its aggregate renewable energy target to 450 GW by 2030!
Going by the current costs of utility-scale power plants, reducing 10 GW of solar module imports amounts to at least $2.2-2.5 billion worth of import savings. In comparison to this, the cost of putting up 1 GW per year of a solar manufacturing plant is expected to be about $800 million.
But that’s not all.
Some Other Benefits For India
With the amount of solar power planned in India, strategically the country needs some reasonable manufacturing capacity to avoid over-dependence on China for what is well on its way to becoming critical infrastructure.
In doing so, there would be benefits beyond the reliance and resilience resulting from domestic manufacturing capacity.
The 12 GW of solar power plants to be built under SECI’s tender alone would displace the carbon dioxide equivalent to the action of over 480 million trees during the project lifetime. This is equivalent to about a fifth of the carbon sink which India wants to create by increasing forest cover as part of its INDC.
AGEL also claims that its projects under the SECI’s tender will create 400,000 direct and indirect jobs.
It is pertinent to point that these manufacturing facilities may face risk due to fast changes in solar technology itself, which has forced several manufacturers in India as well as China to close their shops.
In the next leg, the government would probably want to see the current ‘pilot’ snowball into a larger more diversified manufacturing base.
Even back in 2019, as per a report from Mercom India, Waaree Energies (partner of Azure Power in SECI’s tender) and Adani were the leading module suppliers in terms of shipments in the country. Adani’s existing 1.3 GW of capacity in Gujarat (incidentally several consortiums are planning Lithium battery manufacturing facilities in Gujarat) will further consolidate the Group’s position as India’s largest solar manufacturing facility.
Over the mid-term, from a diversification point of view, it would be important to nurturing other facilities as well.
But for now, it is certainly a time for SECI and MNRE to breathe a sigh of relief. Though it has taken them two difficult years, they have been successful in kickstarting the solar manufacturing process in India, at a scale that can make a difference.
The Indian state of Andhra Pradesh – which had commissioned an aggregate 3.53 GW of solar capacity as of May 31 – will set up the new plants to ensure nine hours of daily free power supply to the agricultural sector.
The state government of Andhra Pradesh has approved the planned development of 10 GW of solar capacity to meet the energy requirements of the agricultural sector. The project is aimed at providing nine hours of daily power supply to farmers, the Press Trust of India reported.
Separately, the State Cabinet, chaired by Chief Minister YS Jagan Mohan Reddy, also approved the establishment of an Integrated Renewable Energy Project (IREP).
Integrated Renewable Energy Project
“As part of the IREP, 550 MW of wind power, 1200 MW of pumped storage hydel power plant and 1000 MW of Solar power will be set up,” PTI quoted Information and Public Relations Minister Perni Venkataramaiah.
The proposal to set up 10 GW of its own solar power generation projects was floated by the state government in February this year as it has been incurring more than Rs 10,000 crore to meet the agriculture subsidy, lift irrigation power charges and aquaculture subsidy every year.
The subsidy has been on a continuous rise over the years with the increasing cost of power supply and also an increase in the number of agricultural pump set connections.