NLC India along with a state-run coal mining has recently auctioned a 20MW solar PV project, it is to be added with a 28MWh of energy storage capacity in Andaman and Nicobar Islands.
For the first time such big auction for utility-scale storage has taken place in India with bids announced, according to the consultancy firm Bridge to India.
This came as positive news for the sector. Earlier this year Solar Energy Corporation of India (SECI) had decided to cancel its major solar-plus-storage tenders in Andhra Pradesh and Karnataka, the reason was drop in price of PV went too low in the country that it had needed to be reworked from scratch. There were similar drops of Tender in Andaman and Nicobar Islands by NTPC.
The Indian Energy Storage Alliance (IESA) has also said that the Indian market for Solar PV is in an “Interesting Phase” at present, there are 19 applications for energy storage in India that would create around 200MWh of opportunities for next 5 years.
The NLC tender includes EPC and O&M services for 25 years and Indian firm Mahindra Susten won the auction with a quote of INR 2.99 billion. Amongst the other top bidders were Adani, Sterling and Wilson, Ujaas, Exide, Hero and BHEL, according to Bridge to India.
The large variation in the bids for the EPC segment suggests that the understanding of the technical specifications was not consistent among the bidders, as per reports by Bridge to India. SECI’s own tenders faced similar problems, lack of consistent knowledge of technical specifications accompanied with price caps led to delay before the cancellation.
Andaman and Nicobar Islands attracts developers for storage as one can bank on them for expensive diesel generation making storage economically feasible.
Bridge to India also mentioned “The technical specifications of NLC tender are fairly stringent and comes up with penalties for full 25-year duration of contract.”
There is a lack of understanding for the benefits of storage and distribution companies have tended to opt for “power cuts and curtailment in order to balance power demand and supply rather than opting for expensive storage solutions.”, as cited by Bridge to India.
A month back, Bharat Reddy, deputy general manager for SECI, said that there has been an effect on SECI’s large-scale storage tenders due to low solar bids in the Rewa tender in Madhya Pradesh.
Reddy added that they are trying to work with the ministry again.
He also cited that SECI is facing difficulties in getting land in Karnataka, but these issues have settled down to a great extent and SECI will be releasing new tenders soon.
Reddy added that for the meanwhile SECI has tendered off-grid mini-grid projects in Jammu and Kashmir State, at Leh and Kargil. The project will be around 14 MW of Solar and 42MWh of storage. The location is already equipped with a diesel grid and so the project will be integrated with diesel generation.
India’s Central Electricity Authority is currently working upon how and whether to mandate solar and wind projects to be combined with energy storage for certain size of projects.