Single tender for thermal & solar power flags concerns

Jaipur: The energy department's single tender for both thermal and solar power of 3,200MW and 8,000MW respectively has set tongues wagging with many in the industry questioning the rationale of clubbing them.
They fear that a single tender, likely the first time it is being done in the country, will restrict competition and distort price discovery hurting discoms that are already reeling under a debt of over Rs 1 lakh crore.
Additional chief secretary (energy) Alok told TOI that they cannot comment on the tender as it is currently under process. “We have followed all the guidelines of the government of India for floating the tender,” he said.
However, industry said that the single tender would make several large solar power developers in the country ineligible unless they form a JV with the coal-based energy generator.
There are not many companies in the country that are into both coal and solar power generation, they added. “If we restrict participation to a few players, the bidding may not be competitive. That means the cost of purchasing power will be expensive, burdening the consumer further,” said the industry expert preferring anonymity.
On the other hand, the government believes, as mentioned in the tender document, that the economy of scale will reduce prices, an argument described by the industry as generic and lacks relevance in this contest.
DD Agarwal, director at Samta Power, an NGO in the energy sector said, “Instead of awarding such large capacities to one player or a consortium leaves the room open for risks. Also, they should have floated the two tenders separately to attract better participation.”
In fact, thermal power capacity of 3200 MW requires investments of around Rs 26,000 crore and Rs 40,000 crore for 8000 MW solar plants, as per industry estimates, taking the cumulative investments to over Rs 65,000 crore.
The solar industry has been pushing the government to promote decentralized projects at village and town levels so that the requirement of power evacuation and investments in power transmission lines will be miniscule.
Sunil Bansal, president of Rajasthan Solar Association, said, “Solar projects at the substation or village or town level are key to increasing coverage of renewable energy. Also, a large number of small projects increase economic activities and help the MSMEs in the sector.”
The financial bids of the tender is scheduled to open on June 24.