SECI tender a ‘game changer’ for low-cost renewables and energy storage in India

The reverse auction was launched with a Notice Inviting Tender (NIT) issued by SECI on 15 March for the Request for Selection (RFS). Buying entities for the solar-generated power will set 2-hour periods each day during which energy will be drawn from the energy storage system (ESS), determined on a day-ahead basis.

Projects will be set up on a build-own-and-operate (BOO) basis, with SECI entering into 25-year power purchase agreements (PPAs) with winning bidders. The SECI competitive solicitation for the aggregate 1,200MW solar PV capacity and BESS capacity was run under Ministry of Power guidelines for tariff-based competitive bidding.

While results are still to be published, according to the state-run solar corporation’s e-tender portal there were four winning companies (see above): Pace Digitek Infra, awarded 100MW at IR3.41/kWh—which was the lowest bid—Hero Solar Energy, awarded 250MW at IR3.42/kWh, ACME Solar Holdings (350MW, also at IR3.42/kWh) and JSW Neo Energy, which won the most capacity at 500MW, again with a bid of IR3.42/kWh.

NTPC Renewable Energy and ReNew Solar Power, two of India’s biggest players thus far in solar PV and energy storage tenders, lost out with bids that couldn’t match the winners: NTPC Renewable Energy only just, at IR3.43/kWh, and Renew Solar Power further out at IR3.71/kWh.

Debmalya Sen, energy storage expert and India lead at the World Economic Forum (WEF), commented on business networking site LinkedIn that the SECI tender’s price discovery demonstrates how competitive solar PV and BESS now are.

Winning bids were almost a Rupee lower than recent peak power tenders, and even beat some of the recent hybrid solar-wind renewable energy tenders, making it a “very encouraging set of results,” Sen wrote.

Amol Phadke, a senior scientist and affiliate at the University of California, Berkeley, and staff scientist at Lawrence Berkeley Lab (Berkeley Lab), called the results a “game changer”.

“This bid signifies that low-cost storage has arrived in India, which has profound implications for future investments in peak and baseload power from other competing resources,” Phadke wrote in a post.

Phadke noted that the hybrid projects would be capable of providing two hours of evening peak power at just around IR0.8/kWh more than the cost of solar PV. The results implied that around 20% of power delivered during hours when solar is not generating would come in at a cost of IR6.6/kWh, while output during solar hours would cost about IR2.6/kWh, leading to the weighted average cost of just over IR3.4/kWh, according to the scientist.

This meant solar-plus-storage could likely come in cheaper than new coal-fired facilities and be much faster to develop and build, he wrote.

In a report published earlier this month, market analysis and research group Mercom India identified that there are now 219MWh of large-scale battery storage facilities online across India, and 90.6% of that is at projects paired with solar PV.

Tenders have been vital in driving forward the adoption of energy storage in the country, including pumped hydro and batteries, helping bring down costs and stimulating investment appetite. A couple of weeks ago, SECI also launched India’s biggest tender for standalone BESS capacity to date, seeking 1,000MW/2,000MWh of resources.

Further info on the solar-plus-storage tender, ‘RfS for Setting up of 1200 MW ISTS-connected Solar PV Power Projects with 600 MW/1200 MWh Energy Storage Systems (ESS) in India under Tariff-based Competitive Bidding (SECI-ISTS-XV)’ can be found on SECI’s website.