NTPC Seeks to Procure 100 MW of Solar or Wind Power with a Tariff Cap of ₹3/kWh

The bid submission deadline is September 11, 2019


The National Thermal Power Corporation (NTPC) has issued a tender to procure 100 MW of power from solar or wind power projects.

The bid submission deadline is September 11, 2019. The technical bids will be opened on September 12, 2019, and financial bids will be opened on September 13, 2019.

The NTPC will sign a Power Purchase Agreement (PPA) with the selected bidders for the purchase of power for one month from the starting date of the power procurement from the project. The power procured will be utilized for flexible generation of its thermal power projects.

The least capacity that can be procured from the solar or wind power project is 50 MW. The rest will be in multiples of 10 MW. A single bidder can offer to sell renewable power from multiple solar or wind power projects.

The bidders will have to submit bids quoting a fixed tariff for the entire PPA duration of one month. The shortlisted bidders will then be invited for the reverse bid auction.

The NTPC has set a tariff cap of ₹3 ($0.04)/kWh for the first round of selection. Bidders quoting a higher tariff will be dismissed in the first round for being “non-responsive.”

To participate, the bidders should have already commissioned solar and wind power projects that are commercially operational on the date of bid submission. The projects can be located anywhere in India.

The eligibility criteria for bidders entail that the bidder should be a company or a conglomerate of companies and should own the solar or wind project. The bidder should not be involved in any litigation or legal discrepancy of any sort.

The project should mandatorily be interstate transmission system (ISTS) connected. To connect with the grid and for metering, the bidder must abide by the Grid Code, grid-connectivity standards, and all the transmission regulations.

The transmission cost from the renewable project up to the interconnection point, including the cost of line construction, wheeling charges, losses must be borne by the renewable power generator.

Earlier this month, the NTPC had to extend the bid submission deadline for 1.2 GW of ISTS-connected solar projects in western India after it introduced an upper tariff ceiling for this tender through an amendment. An upper tariff ceiling of ₹2.78 (~$0.039)/kWh was set for the tender.

A developer had told Mercom at that time that “the upper tariff ceiling was a deterrent.” It remains to be seen if an upper tariff cap of ₹3/kWh is more palatable to the bidders this time around.

Tariff cap in reverse auctions has been a huge problem for the sector as developers are very reluctant to participate in auctions where tariffs can only go in the downward direction.

Image Credit:  Epagemakerwiki [CC BY-SA 4.0 ]


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