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The Solar Energy Corporation of India (SECI) was created in 2011 to implement the National Solar Mission and ensure robust project development.
SECI, through its various tenders, has played a significant role in mitigating the risk of power offtake by distribution companies (DISCOMs) across the country.
The agency has been framing innovative and targeted tenders to address the challenges unique to renewable energy to meet the requirements of consumers through third-party sale and DISCOMs.
At an exclusive session by SECI in Mercom India’s Solar Summit 2022 on July 28 in New Delhi, panelists AK Sinha, AGM, SECI, Manish Karna, Head of Business Development, Adani Green Energy, and Naveen Singh, Head of Business Development and Policy Advocacy, HPX India, discussed SECI’s new-age tenders.
The session was moderated by Priya Sanjay, Managing Director, Mercom India.
Sinha said, “SECI has been one of the biggest implementers of renewable energy. We plan to implement approximately 15-20 GW annually. We are aiming for a more stable, dispatchable power source for which hybrid is usually the norm, and then you have round-the-clock with storage. At SECI, we request a certain amount of output and then let you choose the renewable components to derive that output, whether wind, solar, or storage. Whenever tenders are to be published with SECI, the pre-bid suggestions usually lead to many changes in the original request for selection (RfS) before it becomes a tender with the primary focus on grid stability, which then leads to innovative tenders.”
“This way, we ensure that consumers and generators feel their requirements are met. Communicating with DISCOMs to understand their exact requirements is crucial to speeding up the power purchase agreement (PPA) signings. The structural part of the tenders is important as most DISCOMs look for assured power. We might see the PPA durations reduce from 25 years to just 5, 10, and 15 soon,” he said.
According to Karna, hybrid and RTC projects fit the quotient perfectly when it comes to optimizing the system, which helps manage the transmission and meet the demand curve of DISCOMs. “SECI’s hybrid tenders help utilize the resources and assets up to 70-75% ensuring maximum optimization. Even when power is offered to a consumer, one should never offer just standalone wind or solar or even just hybrid or just storage but a mix of it all aiming for a stable supply. SECI effectively allows asset owners to meet buyers directly and acts as the medium, like ride-hailing services.”
Singh said price signals in the exchanges drive the market for SECI tenders. “At HPX, we have covered approximately 33% of the Term-Ahead Market, which is expected to go up to 36% in the future. With innovative tenders, consumers can procure actual energy than just RECs to meet their green energy requirements. We at HPX don’t have 100% green energy procurement options available yet, but we can help meet a certain percentage of that requirement for green power.”
Hybrid plus storage
Sinha believes that hybrid with storage options is the way to go. He said individual solar and wind energy options may not continue unless they meet a specific consumer-specific requirement. “With SECI tenders, we take care of end-to-end tasks and ensure every aspect is covered. With renewable energy, an ecosystem needs to be built but taking the first step is always risky, which is where SECI comes into the picture. With wind energy, we still face challenges as solar has set the tariffs very low, making it difficult to find off-takers for wind. Our first-ever standalone battery storage tender has received a positive response, which encourages us to initiate more such projects.”
Karna felt that hybridization would help deliver a better product to the consumers. SECI should realize that the demand is not only from the DISCOMs but also from captive users and the dispatch centers. Tenders to cater to these demanding consumers must also be introduced.
DISCOMs were slowly shaking off the belief that they have surplus power, making them more accepting of renewable power sources. “We have seen 17 GW of PPAs signed this year alone. We also have seen non-conventional with storage touching the capacity utilization factor (CUF) of 70%, which is as good as thermal. It must be considered as complementing and not competing,” he said.
Singh spoke about merchant power plants that are expected in the future. He said they currently find it challenging to get funding from financing institutions. “It might just work if IT companies are okay to purchase power at a higher price. Innovation is a challenge in exchanges we plan to bring along with long-duration contracts to boost merchant power plants. In SECI tenders, whenever there is a surplus left behind, exchanges come into play to utilize and trade it effectively.”
In April this year, SECI issued a request for selection to set up pilot projects of 500 MW/1000MWh standalone battery energy storage systems (BESS) under a build, own, operate, and transfer (BOOT) model.
Previously, SECI sought quotations for a short-term working capital credit facility of up to ₹5 billion (~$62.78 million). The credit facility can be in the form of a standby letter of credit, letter of credit, or bank guarantee.