Adani to Remove Domestic Content Requirement for 700 MW Solar Auction
The MERC has allowed AEML to conduct bidding for 350 MW of solar with another 350 MW under greenshoe option
April 11, 2019
The Maharashtra Electricity Regulatory Commission (MERC) has approved Adani Electricity Mumbai Limited’s (AEML) request to initiate the bidding process for 700 MW of solar without the domestic content requirement condition through an e-reverse bidding process under single-stage bidding process as stipulated under standard bidding guidelines
MERC decided to allow the change after going through a petition filed by AEML seeking deviation from standard bidding guidelines.
AEML had requested MERC to approve the competitive bidding process to procure 350 MW of solar power with a greenshoe option of additional 350 MW on a long-term basis and to approve bid documents; draft request for selection (RfS) and draft power purchase agreement (PPA) along with deviation.
While going through the submissions, MERC observed that AEML’s intention to call for bids by adopting the two-stage bidding process instead of a single-stage bidding process. MERC also noted that AEML in its bid documents has stipulated that bidders would be selected in the ascending order with lowest quoted tariff (being L1) until the total capacity of 350 MW is exhausted. After that, based on the discretion of AEML, an additional 350 MW capacity under greenshoe option is to be allocated to the next quoted tariff and so on until the capacity under greenshoe option is exhausted.
Under the bidding document, AEML has clarified that it intends to procure minimum 350 MW and if discovered rates are attractive, it may procure an additional 350 MW. Bidders have been allowed to bid up to 700 MW. The MERC has allowed AEML to conduct bidding for 350 MW + 350 MW of solar PV power.
MERC was also of the view that if AEML maintains transparency in the bidding process and adopts e-reverse auction process, then there should not be any objection to allow AEML’s Group Companies to participate in the bidding process. It will only help increase the competitiveness of the bidding process.
MERC has allowed AEML to conduct bidding for 350 MW + 350 MW of solar PV power, but under single-stage bidding process as stipulated under standard bidding guidelines. The commission has also ordered AEML to remove the condition of “Domestic Content Requirement” from its bidding documents and also to adopt e-reverse auction process of rate discovery.
MERC has directed AEML to initiate the bidding process at the earliest after considering the directives provided by it.
In January 2019, to fulfill its solar renewable purchase obligation, AEML had issued RfS for the purchase of power from 350 MW of grid-connected solar projects on a long-term basis through a competitive bidding process.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.