SECI’s Innovative Tenders Address Peak Power and PSTN Supply Issues

The Solar Energy Corporation of India (SECI) was established in 2011 to implement the National Solar Mission and ensure the development of sound projects.

SECI, through its various tenders, has played an important role in mitigating the risk of electricity offtake by distribution companies (DISCOM) across the country.

The agency has framed innovative and targeted calls for tenders to meet the challenges specific to renewable energies in order to meet consumer requirements through sales to third parties and DISCOMs.

During an exclusive SECI session at Mercom India Solar Summit 2022 on July 28 in New Delhi, panelists AK Sinha, AGM, SECManish Karna, Business Development Manager, Adani green energyand Naveen Singh, Head of Business Development and Policy Advocacy, HPX Indiadiscussed SECI’s new-age tenders.

The session was moderated by Priya Sanjay, Managing Director, Mercom India.

Innovative tenders

Sinha said, “SECI has been one of the largest implementers of renewable energy. We plan to implement around 15-20 GW per year. We are aiming for a more stable and distributable power source where hybrid is usually the norm and then you have 24 hour storage. At SECI we ask for a certain amount of production and then let you choose the components sources to derive this production, whether it is wind, solar or storage. Whenever RFPs are to be published with SECI, the pre-tender suggestions usually result in many changes to the Initial Selection Request (RfS) before it becomes a focused RFP. primarily on grid stability, which then leads to innovative tenders.

“In this way, we ensure that consumers and producers feel that their requirements are met. Communicating with DISCOMs to understand their exact needs is crucial to expedite the signing of Power Purchase Agreements (PPAs). The structural part of tenders is important because most DISCOMs are looking for assured power. We could see PPA durations drop from 25 years to just 5, 10 and 15 soon,” he said.

According to Karna, hybrid and RTC projects perfectly match the quotient when it comes to optimizing the system, which helps manage transmission and meet the demand curve of DISCOMs. “SECI’s hybrid tenders enable the utilization of resources and assets by up to 70-75%, guaranteeing maximum optimization. Even when electricity is offered to a consumer, it should never be offered only stand-alone wind or solar or even just hybrid or just storage, but a mix of all of these aiming for a stable supply. SECI effectively allows asset owners to meet buyers directly and acts as a medium, like ride-sharing services.

Singh said price signals in exchanges drive the SECI tender market. “At HPX, we have covered around 33% of the futures market, which is expected to reach 36% in the future. Through innovative bidding, consumers can source real energy beyond RECs to meet their green energy needs. At HPX, we do not yet have 100% green power supply options, but we can help meet a certain percentage of this green power requirement.

Hybrid plus storage

Sinha thinks the hybrid with storage options is the way to go. He said vanilla solar and wind power options may not continue unless they meet a specific consumer-specific requirement. “With SECI tenders, we take care of the end-to-end tasks and ensure that all aspects are covered. With renewable energies, you have to build an ecosystem but taking the first step is always risky, that’s where SECI comes in. With wind power, we still face challenges because solar has set the tariffs very low, making it difficult to find buyers for the wind. Our very first autonomous battery storage tender received a positive response, which encourages us to launch other projects of this type.

Karna felt that hybridization would help deliver a better product to consumers. SECI should realize that demand is not only coming from DISCOMs but also from captive users and dispatch centers. Calls for tenders to meet these demanding consumers must also be launched.

DISCOMs were slowly shedding the belief that they had excess energy, which made them more open to renewable energy sources. “We have seen 17 GW of PPAs signed this year alone. We also saw some unconventional with storage hitting the capacity utilization factor (CUF) of 70%, which is as good as thermal. It should be seen as complementary and not competitive,” he said.

Singh talked about the merchant power plants that are expected in the future. He said they are currently finding it difficult to secure financing from financial institutions. “It could work if IT companies agree to buy electricity at a higher price. SECI tenders, whenever there is a surplus left, exchanges come into play to utilize and trade it efficiently.

In April this year, SECI launched a selection request to set up pilot projects of 500 MW/1000 MWh Battery Standalone Energy Storage Systems (BESS) under a Build, Own, Operate and Transfer model. (BOOT).

Previously, SECI was seeking quotes for a short-term working capital credit facility of up to ₹5 billion (~$62.78 million). The credit facility can take the form of a stand-by letter of credit, a letter of credit or a bank guarantee.

Carol N. Valencia