Indian Solar Developers Urge MNRE to Postpone Auctions Due to Transmission Issues

Various solar project developers have also sent their request to the ministry with the SPDA letter


The Solar Power Developers Association (SPDA) has written to the Ministry of New and Renewable Energy (MNRE), seeking postponement of scheduled auctions for projects, considering the ongoing transmission issues.

The project developers in the country are skeptical of the final rules relating to the grant of connectivity to the Inter-State Transmission System (ISTS) as well as the regulations for General Network Access (GNA) for renewable energy projects are yet to be announced.

This, in turn, has led to uncertainty over grid connectivity for renewable projects in the country. In its letter, the SPDA asserted that the draft procedure for granting connectivity has many contradictions with respect to allocation of connectivity in multiple stages. “Without resolving such issues, it will lead to unfair allocation of connectivity. Comments on the procedures have been represented by industry members to Central Electricity Regulatory Commission (CERC). It is understood that the public hearing for procedure of grant of connectivity is yet to be scheduled, which is required to be conducted before the finalization of the same by CERC,” the letter said.

Therefore, SPDA has asked the ministry to direct NTPC and SECI to defer the bid submission deadlines of all the tenders for lSTS-connected solar projects until the procedures for grant of lSTS connectivity and GNA regulations are finalized by CERC.

In its letter to the MNRE, the association said, “The recent tenders released by SECI and NTPC for 10,000 MW of solar projects through ISTS are scheduled for bidding in May and June of 2018. It is essential that bidding  for these projects be held only after the regulations for grant of connectivity at ISTS are finalized by CERC and they have been able to hear comments from stakeholders. This will help encourage participation, discover fair pricing, and reduce the risk of disputes that may arise out of ambiguities on account of procedures for grant of connectivity”.

The SPDA added that unless there is clarity in terms of obligations of developers, off-takers and interfacing agencies, project developers might find themselves unable to connect their power projects to the national grid, even after completing the work.

“The wind sector is already struggling for allocation of connectivity for around 7,000 MW of projects already auctioned by SECI because regulations for ISTS connectivity are pending before CERC.  Around 10,000 MW of solar tenders by SECI and NTPC that are out for bid submissions shall only add to the issues and developers will not have the ability to meet PPA obligations (obtaining grid connectivity) without proper regulations in place. Therefore, bid submission dates of solar tenders must be extended until the above regulations are finalized.  SPDA has also requested that SECI and NTPC release the list of CTU substations with capacity available for evacuation,” Shekhar Dutt, the director general of SPDA, told Mercom.

Solar project developers like Azure Power, Avaada, and Sprng Energy have also sent their request to the ministry along with the SPDA letter.

In its letter, Azure Power stated that in order to be eligible for connectivity at a particular ISTS substation, a developer has to acquire at least 50 percent of the land required for the project in its vicinity. It also noted that according to the rules, the applications will be processed on first come-first served basis.

“Bidders to whom connectivity is not granted will be at a huge loss on account of the investment made in the land required to submit the application. There is a possibility of multiple bidders applying for stage II connectivity for the same substation for these tenders, and for their application they would have taken on a lease for at least 50 percent of the required land,” Azure’s letter noted.

Azure recommended removal of land acquisition from the eligibility criteria to improve competitiveness in the bidding process and timely execution. According to the company, the seriousness of the bidder would already have been proven through the PPA and bank guarantee.

Sprng Energy also requested postponement of auctions until the finalization of connectivity issues by CERC; and until CTU issues an updated status allocation of bays at the appropriate pooling substations based on the final ruling.

There is growing skepticism on whether India’s transmission infrastructure is equipped to handle the influx of new intermittent renewable power generation. Mercom recently reported on transmission issues and non-availability of CTU in detail.

Considering the recent surge in government-issued tenders for ISTS to connect solar and wind projects, the need for a robust grid infrastructure is becoming more important than ever.

“Passing the buck by government agencies is a huge concern. Once a tender is announced, no one seems to want to take the full responsibility and facilitate various aspects of project development all the way to commissioning. Ease of doing business with regards to building solar projects has become tough. A developer must deal with multiple government agencies, not to mention the endless paperwork and approvals that are needed. Transmission issues need to be handled swiftly to boost confidence in the solar sector and with investors. All government agencies will need to work in sync if the country is to achieve Prime Minister Modi’s goal of installing 100 GW of solar by 2022,” said Raj Prabhu, CEO of Mercom Capital Group.