Modi govt to bid out Rs 4,697 crore power projects in first reverse e-auction

In a major change aimed at infusing transparency in the infrastructure sector, the Modi government will conduct its first-ever bidding of power transmission projects through reverse auction on an electronic platform and award six mega contracts worth Rs 4,697 crore through the novel initiative.

"The projects would be bid out in the next few months through the reverse e-auction route. The process will evaluate tariff-based competitive bids submitted by companies for the first time," a senior official close to the development told ETEnergyWorld. He added power projects financing firms Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) would act as the nodal agencies for implementing the electronic tenders.

The electronic bidding is being seen as a huge opportunity for some of the key players in the sector including Sterlite Power, Adani Transmission, Kalpataru Power, Alstom T&D and KEC International apart from the largest and the state-owned Powergrid Corp (PGCIL).

PFC will execute the bidding process of four projects including Rs 536 crore Transmission System for Ultra Mega Solar Park at Fatehgarh in Rajasthan, and Rs 863 crore additional 400 KV feed to Goa and an additional system for power evacuation from generation projects at Raigarh in Chhattisgarh.

The power ministry's Public Sector Undertaking (PSU) will also bid out Rs 743 crore connectivity system for Lanco Vidarbha Thermal Power and inter-state transmission system strengthening in Madhya Pradesh apart from Rs 318 crore connectivity and long-term access to Himachal Pradesh Power Corporation's 450 MW from Shongtong Karcham hydro project.


In addition, Rural Electrification Corp will execute the bidding of Rs 916 crore New Western Region-Northern Region 765 kV Inter-regional corridor and Rs 1,321 crore Eastern Region Strengthening scheme.

"The projects may not be awarded this year. But we will start issuing the Requests for Qualification (RFQs) and Requests for Proposal (RFPs) beginning next month," the official said.
Apart from the six projects, the centre is currently working on two additional projects where RFPs have been issued through the previous manual process while the RFQs would be issued through e-auction.

The Modi government has ramped up pace of implementation of power transmission projects in a bid to end regional disparity in electricity supply and make round-the-clock power available to all the citizens by 2019 in Asia's second-largest economy. Power minister Piyush Goyal had last month launched the reverse e-auction process form bidding for power transmission projects on the lines the coal block auctions.

The minister had said the e-bidding and reverse auction of transmission projects will facilitate better price discovery. Currently, India has a transmission network of 350,792 curcuit km with a transmission capacity of 59,000 Mw. The government plans to raise it to 65,000 Mw by March 2017.

 

My View:

Carrying out a reverse e-auction in power transmission will help the competition to grow in transmission segment. The project which is included in bidding will help to improve the infrastructure. It also includes the transmission project of solar plant. It would be interesting to see the kind of bidding will happen in first ever reverse e-auction in transmission segment.



 

Solar projects in Maharashtra receive Rs 4.42 per unit bid

The proposed 450 mw grid connected solar projects in Maharashtra under National Solar Mission has received lowest bid of Rs 4.42 per unit and nine other companies submitted bids of Rs 4.43 per unit.

Lowest bidder was Vijaya Printing Press Pvt Ltd which offered to build a 10 mw solar plant at a tariff of Rs 4.42 per unit. This was followed by Solar Edge Power and Energy Pvt Ltd (130 mw). Others were Light Source Renewable Energy Holdings, Neel Metal Products Ltd (100 mw) and Canadian Solar Energy Holding (80 mw).

Jasmeet Khurana, Associate Director Consulting said: "The Maharashtra bid goes to show that new investor interest exists even at current tariff levels. UK based Lightsource and China based Canadian Solar are known to have been looking at opportunities in India. They have finally taken a plunge. Due to a big swell in new allocations over the past 6-8 months, many of the prominent developers are reaching investment and operational limits. This should open up avenues for new developers and investors waiting on the sidelines."

This was under Part-B of the National Solar Mission Phase-II which Solar Energy Corporation of India (SECI) is implementing along with a large number of schemes under the National Solar Mission (JNNSM) including this one in Maharashtra.

This projects are also eligible for viability gap funding (VGF) although the lowest bid of Rs 4.42 did not ask for any such funding while the rest opted for viability funding of Rs 1.46 lakh per megawatt on the lower side to Rs 2.48 lakh megawatt on the higher side. VGF support is a Government Grant that is provided by SECI upon successful commissioning of the plant.

Under these schemes, solar power projects are set up by private developers on Build-Own-Operate (BOO) basis, either in government designated solar power parks or in any other location of the developer's choice. Power purchase agreements (PPA) are signed with SECI for 25 years.

However, Khurnana said that the underlying off-taker in the case of this bid (Maharashtra) is more bankable that some of the other SECI bids (in other states) and that does have an impact on risk perception and tariffs.

"This is aided by a rapid reduction in equipment costs due to the ongoing global supply glut. Maharashtra has the highest power consumption amongst all states in the country but it lags far behind many states in terms of adoption of solar power. The state will need to play an important role in future growth of the utility scale solar market in the country," he said.

My View:

The main factor is bankability of offtaker. If the offtaker is in good position, so investor will also be happy to bid for the projects. PPA of 25 years period is quite huge in perspective of solar power.

IPCL to adopt smart grid with USTDA in Gaya

India Power Corporation Ltd has entered into a partnership with US Trade & Development Agency to implement smart gird technology on India Power's distribution network - particularly to its Gaya Franchise in Bihar. It will boost efficiency and reliability while minimizing wastage.

A smart grid is commonly characterized by the application of digital processing and communications to centralize data flow and information management. American expertise will help overcome challenges like integration of new grid information - one of the key issues in designs of smart grids.

At present, electric utilities now find themselves making three classes of transformations: improvement of infrastructure; addition of the digital layer; and business process transformation, necessary to capitalize on the investments in smart technology. Much of the work going on in electric grid modernization, especially for substations and distribution automation, is now included in the general concept of the smart grid.

The opportunity to conduct USTDA sponsored technical assistance for IPCL will be completed by interested US firms through Federal Business Opportunities.


My View:

The initiative taken by IPCL is good one. The smart grid will help to reduce wastages which can improve the present condition in Gaya. It can become an ideal example if it becomes a successful project.

CleanMax eyes 400 MW rooftop solar installed capacity in 2 years

Buoyed by the Centre's increased focus on renewable energy sector, solar solutions provider CleanMax Solar is looking to enhance its rooftop installed capacity by nearly eight-fold to about 400 MW in the next two years, a top company official said.

"With a current installed rooftop solar capacity of 55 MW across the major metros in the country, we are looking at increasing it to up to 400 MW in the next two years," company's Managing Director Kuldeep Singh told PTI here.

He said the government's vision of 40,000 MW of installed rooftop solar capacity by 2022 gives the company a huge opportunity to grow.

"Along with this, a number of private and government entities are also coming forward where we provide bespoke rooftop solar solutions," he said.

The company, which enjoys nearly 28 per cent share in the total rooftop solar market, has presence in six metros including Mumbai, Pune, Bangalore, Jaipur, Chennai and Hyderabad.

When asked whether the government's ambitious target of 40,000 MW was achievable, Jain said, "The target is massive and we should not go much into the numbers. But the positive side to it is that there is improved activity and acceptability in this space."

CleanMax caters to clients across sectors like automotive/auto components, food and beverages, government establishments, academic institutions, IT/ ITeS and other manufacturing industries.

Founded in 2011, the company develops solar projects on a turnkey basis, providing power on a per-kWh basis, under long-term power purchase agreements, typically at rates cheaper than grid tariffs.

It also installs solar power plants on a capex basis, and can supply off-site solar power through open access in Karnataka and Tamil Nadu.

My View:

The target by Clean Max is quite ambitious. The competition is immense in solar rooftop segment. The offtakers are still not coming in full fledged manner. The policies and technology is also coming up in positive manner which is facilitating solar industry.

Lets hope that in future more efficient technology can come which can help the industry to grow.

Himachal cabinet decides to amend hydro policy 2006

Himachal Pradesh cabinet on Monday decided to amend the Hydropower Policy 2006 in respect to transfer of shares by Himachalis to non-Himachalis. Now Himachalis can sell or transfer 49% equity shares to non-Himachalis at any stage after allotment of projects upto 2 MW capacity and full disinvestment after two years of commissioning of the projects.

In case of bona fide Himachalis, to whom projects upto 2 MW to 5 MW capacity are allotted, they can sell or transfer 51% equity share to non-Himachalis at any stage after allotment of projects and full disinvestment after two years of commissioning of the projects. However, subject to the condition (in both the above cases), it was decided to levy some appropriate fee for transfer of equity.

The cabinet gave its nod to cancel four projects namely Joiner-II (3MW) in district Chamba, Kanda (0.80 MW) in district Sirmaur, Rawin (1 MW) in Shimla district and Chahod (2 MW) in district Mandi.

It approved the Himachal Pradesh Miscellaneous Adventure Activities Rules, 2004, which, besides existing HP Aero Sports and River Rafting Rules, also would include miscellaneous adventure activities like river crossing, zorbing, hot air ballooning, skiing, trekking, rock climbing, bungee jumping, rolling balls or water balls and zipline among others. However the objections and suggestions with regard to rules would be invited from the general public before finalization.

Cabinet approved amendments in section 3 of the Himachal Pradesh Tax on entry of goods into Local area Act, 2010. It also accorded approval to 100 units of free electricity per month to families affected by hydel projects as per subsidized tariff determined by Himachal Pradesh Electricity Regulatory Commission (HPERC) from time to time with respect to local area development committees of the districts and the balance amount equivalent to quantum of subsidy with state government.

This shall be done once in a year since the tariff is determined by HPERC. It was also decided to provide 35kg ration to the Above Poverty Line (APL) families in tribal areas. All three pulses would be provided to all ration card holders.