14

December

20

Excerpts from the 1000 MW AP Solar Pre-bid meeting

by Pradeep

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This is a follow up post to the article summarising the model Rfs document released by AP for procurement of 1000 MW of Solar Energy. You can view the original article here: http://efficientcarbon.com/blog/salient-points-of-andhra-pradesh-1000-mw-solar-rfs-document

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Location: Vidyut Soudha, Khairatabad, Hyderabad

Duration of the meeting: Meeting was conducted in 3 batches with each lasting for 1-1.5 hours.

No. of people attended: 500+ (Whoa!!)

 

Long day at APTRANSCO office today. Here are the updates of what happened at the pre-bid meeting.
The meeting was poorly planned as, clearly, dividing the whole bunch of 500+ attendees into 3 different groups ticked off people who were waiting since morning but were asked to attend the 3rd batch of the meeting just because they were from Hyderabad (this included us). Preference was given to those who have come from outside of Hyderabad so that they can leave early owing to their plans to travel back.

Finally, when the meeting (3rd batch) kicked off at 1:30 PM, APTRANSCO officials announced a few important points from the discussions in the previous 2 batches:

  • Time-frame to setup an SPV plant (6 months as per RfS document) will be reconsidered.
  • In the case of a winning bid, the single quote that was submitted during the bidding process will be fixed for 25 years i.e. no tariff escalation as in the case of TN 1000 MW programme.
  • PPA for 25 years is the only security for a project developer. No specific mention about security was made though there was talk about a 1 month revolving Letter of Credit (LC).
  • L1 bidding is to be taken at the local substation level, not at the state or region level.

Further to this, the floor was declared open for questions and questions just poured in during the next one hour. The following are the important points that were gathered:

  1. APTRANSCO has nothing to do with the land. It can be any land, doesn’t matter as long as APERC/CERC guidelines have been met.
  2. 20% PLF limit will not be applicable. The final value of power is taken at the meter level. The meters will be set up at the substation (132 or 33 KVA) and the payments will be made as per the metered energy.
  3. Clarity in terms of members of a consortium to be either individual or partnership needs to be given. There is still some info to be given on this.
  4. The developers need to talk to the substations on how much of capacity is available at the substation they want to inject power into. It is their responsibility, not APTRANSCO’s.
  5. Developer has to get information regarding how many bays are available in a local substation.
  6. Billing period is 60 days. 2% will be deducted for early payments – all payment rules as per APTRANSO’s existing guidelines.
  7. No limit for capacity generation from the developers. Developers can submit different quotations at different substations according to the capacity.
  8. Lines and connections to the 33KVA substation have to be laid & maintained by developer. No new connections need to be given by AP Transco.
  9. No clearances required from AP Transco. All mandatory clearances from other govt departments have to be taken up.
  10. Benchmark price will be determined by the expert committee post the submission of bids - Biggest point of controversy. Also, it will be uniform across the state. Upon probing as to how a bidder will be able to understand at what price he can quote without a definite benchmark, officials simply said that it is the government policy.
  11. Either L1 or Benchmark price (in case L1 > Benchmark Price) is the lowest to be taken up at a substation level.
  12. Penalty for shortfall in supply of electricity will be calculated as product of PPA tariff (signed) and difference in injected power and minimum guaranteed power.
  13. Committee Determined Benchmark Price is going to be the ceiling price. If L1 > Benchmark price, then benchmark price will be paid by the govt.

Overall, questions have been answered but concerns about the method of benchmark pricing and the timing of announcement for the same needs to be addressed. How transparent will the process be is the key! It waits to be seen as to how many of the above points will make their way into the final RfS document.

Amid high drama, the meeting ended with the APTRANSCO officials announcing that all queries that have been asked during the meeting and also those that haven’t been asked be sent through email to ce_ipc@rediffmail.com

Alternatively, you may also contact APTRANSCO on the following numbers regarding the Solar bid process:

  • 9440907269
  • 9490156633
  • 9490156625

We would request our readers to let us know any additional queries you might be having so that either we can clarify it or we can forward the same along with a bunch of other queries that weren’t clarified today.

 

-       Team EfficientCarbon

 

20 thoughts on “Excerpts from the 1000 MW AP Solar Pre-bid meeting

  1. Sudhakar

    My clients has 126 acres of land at single place in Karnataka just beside the road within 2 kms from 66/11 kv grid, if any body interested contact me.
    Sudhakar,
    Gajamukh solar consultancy
    8088680388, 9886535464
    psudhakarclk@gmail.com

    Reply
  2. Pradeep (Post author)

    Dear Mr.Vishwanath,

    Thanks a lot for your message. Having a high initial tariff would certainly help solar projects and medium sized entrepreneurs. However, AP has mentioned that the price quoted for AP solar tender is going to be uniform, for 20 years.

    Best Regards,
    Pradeep Palelli

    Reply
  3. Pradeep (Post author)

    Dear Mr.Gangadhar,

    Thanks a lot for your message. You can certainly setup Solar PV plants outside of the AP Solar bidding tender. You may choose any substation for this purpose provided the necessary capacity is available for injection. Sale of power to private party is definitely good option. And yes, you can certainly claim RECs for sale of Solar Power to private party. Currently, the average Solar REC price is hovering at around Rs.12500 per REC.

    Kindly contact me on pradeep@efficientcarbon.com or +919052224701 for more info and to know how we can help you through our services.

    Thank you and good day.

    Best Regards,
    Pradeep Palelli

    Reply
  4. G.B.GANGADHAR REDDY

    Dera Pradeep,

    Thanks for giving information about solar power and clarifications raised by pre-biders. APTRANSCO has notified some substations, apartfrom the said substations can we plan to start the solar power plant.
    With out participating in govt biding, can we start solar power plant through private power purchase agreement.
    what is the risk to go to private ppa. If we go to private ppa the REC will applicable or not. What is the present REC value per unit. Pls clarify.

    Thanka & Regards/-
    G.B.GANGADHAR REDDY,

    Reply
  5. VISWANATH

    BENCH MARK PRICE FIXED MEANS

    IN GUJRAT,RAJASTAN IN EVERY WHERE FIRST 5 YEARS X RS NEXT FIVE YEARS X-5 RS NEXT FIVE YEARS X-6RS

    THE RATE IT WILL BE IN STEPWISE,IT WILL GIVES SOME ALLOWANCE TO THE CONTRACTOR FOR FIRST 6 YEARS.OTHERWISE IT IS MORE CRITICAL TO MEDIUM COMPANIES TO PARTICIPATE .RFS FINANCE BID IS NOT SUPPORTING THIS PATTERN

    Reply
  6. Ruchita

    Hi Pradeep,

    On the outset, I must say very well reported.
    I was just curious to know, if there is any clarity on the AD benefit to be taken into account or not. will there a separate tariff BM for AD and without AD. Also, are they completely indifferent to the type of technlogy?PV or CST?

    Reply
    1. Pradeep (Post author)

      Dear Ruchita,

      Thanks a lot for your comment. The question you have raised is very valid. There hasn’t been a single mention about AD in the entire bid document. Let us get back to you on that.

      Regarding PV or CSP, the document says that the bid process is technology agnostic but we do not think anyone would setup CSP plants under this scheme as the maximum limit available for a particular substation is only 20 MW (moreover, there is only 1 substation with 20 MW capacity) and hence the economic may not workout for a CSP plant of such low capacity.

      Reply
      1. Ruchita

        Hi Pradeep,

        Thanks for your response!!

        However, I wonder not to completely agree with you!
        If you look back on the karnataka solar project allotment, companies have been alloted with 10 MW of Solar thermal as well. However, I may agree for the fact that if there is no separate tariff treatment and also the timeline as prescribed by the AP authorites to achieve various milestone, will demotivate the people from experimenting with the technology.

        Reply
        1. Pradeep (Post author)

          Dear Ruchita,

          I agree with you. I was referring more to the economic viability of a CSP project at lower scales. And when compared to SPV, it’s definitely not viable when there is no separate benchmark for CSP.

          Reply
  7. kumar

    Pradeep,
    I did mean the cost of setting up a 1 MW solar plant,so we can work backwards to arrive at a bidding price that is feasable.As for the warranties, I am skeptic how many companies would be around for 25 years to honor the warranties be it domestic or international.

    Reply
  8. kumar

    Thanks for the clarification Pradeep. WHat is the lowest estimate you have seen so far regarding setting up 1 MW plant

    Reply
    1. Pradeep (Post author)

      Dear Mr.Kumar,

      Kindly let me know if you are referring to the cost of setting up the power plant or the bid price to be quoted. There are people who are providing equipment+EPC service for close to 6 crores too. However, they may not come with proper warranties or certifications and the quality of the equipment may not be good enough for 25 years operation of the plant.

      Reply
  9. Pingback: Andhra Pradesh Solar allotment pre-bid meeting highlights | RESolve Energy Consultants

  10. Basker

    Dear Pradeep,

    Since all the substations are under APTRANSCO, they can get the details of available bay in a minute or so. Why are they asking the developer to find out the same.

    Bhasker

    Reply
    1. Pradeep (Post author)

      Dear Mr.Basker,

      The simple answer would be that APTRANSCO would like the Developers to do all the due diligence and ground work themselves. All that they are interested in is to buy the power at a certain price.

      Reply
  11. Pradeep (Post author)

    Dear Mr.Prakash,

    Thank you for your comment. Let me answer your questions one by one.
    1. RECs are not available for any project that gets a preferential tariff i.e. anything more than the APPC and receives any promotional benefits. Hence, the 1000 MW capacity addition does not come into the REC route.
    2. As per the information from APTRANSCO officials and the RfS bid document, the L2, L3, L4… bidders will be asked to match the price of L1 (the lowest bid price). In case none of the L2, L3, L4… bidders agree to the L1 price, that particular capacity will be left unmet. (We know this defeats the whole purpose of setting a 1000 MW target but that’s how the officials feel about it)
    3. Developer has to bear all the costs from his power plant upto the substation.

    Hope your queries have been answered.

    Thanks.

    Reply
  12. prakash nayak

    Will REC avaialble to Developer, What happens if for a particular substation we quote for 5 MW and one quotes for 1MW and he is lowest, will he get 1 MW or 5 MW, if no what what happens toremaining 4 MW. Will developer have to pay for transmission line as wheelng charges

    Reply
  13. kumar

    Thanks Pradeep for the great recap.I was expecting more clarity from this meeting.Nothing new has been announced that was not already mentioned in Rfs.

    I have the eblow questions,please comment if they have already been addressed.

    Was there any talk about the 2 lac non-refundable amount.(will they refund the amount if we do not agree to the benchmark price that AP Transco shall come up after the bidding )
    Also, if there are say 5 bidders for a certain substation(say 10 Mw capactiy) each bidding for 1 MW, will each get their bid approved at the price quoted as there are not enough bidders for 10 MW.?
    What is a the minimun guaranteed power for a 1 Mw plant?
    What sort of payment Guarantee shall Ap Transco provide for the developers considering that this is a 25 yr PPA?

    Reply
    1. Pradeep (Post author)

      Dear Mr.Kumar,

      While I wouldn’t agree that nothing new has been announced as the officials have agreed to reconsider the timeline for Solar PV project commissioning and removed the 20% PLF cut-off, nothing can be said until the above mentioned changes are incorporated in the final RfS document.

      Regarding your queries:
      - There is not going to be a change in the non-refundable fee as the officials feel that it would weed out the non-serious guys. We too agree with that.
      - The words of the APTRANSCO officials suggested that they are ok with not having the entire 1000 MW capacity filled. Clarification is required on this.
      - Minimum guaranteed power for a plant is what the developer is going to promise at the time of signing PPA. As per the bid doc, the product of PPA signed tariff and the difference between the actual energy generated and 80% of the minimum guarantee is the monetary penalty levied in case of shortfall in supply.
      - The officials said that PPA is going to be the assurance of payment security for developers. However, a one-month revolving Letter of Credit (LC) is something that they are exploring.

      Thanks you.

      Reply

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