The Solar Energy Corporation of India (SECI) has unveiled the results of its 15 GW tender designed to give a boost to India’s solar manufacturing sector. The tender comprises 12 GW of solar PV plant capacity and 3 GW of domestic solar cell and module manufacturing capacity.
Adani Green Energy, part of India’s Adani Group conglomerate, has emerged as the biggest winner under the tender. It has won the world’s largest solar order to build 8 GW of PV power plant along with a 2 GW domestic solar panel manufacturing unit in the country. Adani won this capacity at a tariff of Rs 2.92 (3.9 cents) per kilowatt-hour (kWh). According to the terms of the tender, the first 2 GW of solar projects will be built by 2022, with three more 2-GW chunks to be added in each of the subsequent three years.
Adani’s solar projects are estimated to ring in investments worth over $8 billion. With its existing facilities in the state of Gujarat, Adani Green is expected to set up further manufacturing there only, while the generation PV plants will be spread out across more states, notably Rajasthan. Earlier this year Adani Green spun several gigawatts of its operational solar assets into a new company, with French energy major Total taking a 50 per cent stake in the new venture for $510 million.
Azure Power has emerged as the second winner under the SECI tender. It has been awarded 4 GW of project development capacity at a tariff of Rs 2.92 per kWh along with 1 GW of production contract. Of the former category, 500 MW of projects have to be set up by 2022 while the remaining 1.5 GW capacity has to be built by 2025. The manufacturing facility has to be completed by 2022. The developer had earlier indicated that Waaree Energies, one of the leading domestic solar manufacturers in India, would partner with it on the manufacturing side of the deal. Though it is unclear if Waaree would be partnering for the full 1 GW capacity. Overall, Azure’s projects (project development and manufacturing line) will add another $4 billion of possible investments into the sector.
The tender for these manufacturing linked projects had been floated in November 2019, with Adani Green and Azure emerging as winners in January 2020. SECI was working with the two companies to finalise the terms of the contract before announcing the details.
REGlobal’s take: Indian government has been trying to boost domestic solar equipment manufacturing for several years but the lack of continuous project visibility restrained manufacturers from setting up new production lines. SECI’s manufacturing-linked tender will provide manufacturers enough comfort of a ready demand, assured offtake and good pricing for at least up to 2025. With this manufacturing-linked project development model, India can set a precedent for many other countries to promote domestic manufacturing.
