SECI Seeks Offshore Wind Developers For 500 MW Gujarat Project

Solar Energy Corporation of India Limited (SECI), a ‘Navratna’, recently released a tender to select wind power developers to set up 500 MW ISTS-connected offshore wind power projects in India (Tranche-I). The tender set the bid submission end date (Soft Copy) as  10-12-2024 and the bid submission end date (Hard Copy) is 12-12-2024

The tender clarified, “SECI will enter into a Power Purchase Agreement (PPA) with the successful bidder based on the terms, conditions, and provisions of the document. SECI is not obligated to take ownership of the Project after the expiry of the PPA term. The power procured from the project is provisioned to be sold to the Gujarat Urja Vikas Nigam Limited (i.e. the Buying Entity) on behalf of the Distribution Companies of the State of Gujarat.”

The document also stated, “SECI will act as an intermediary nodal agency for procurement of power supplied by the Offshore Wind Power Developer (OWPD) and sale of such power to the Buying Entity entirely on a back-to-back basis, based on due performance by the OWPD as well as the Buying Entity.”

To grant viability gap funding for the project the SECI in its tender laid down the provision for the selected bidder will be eligible for a grant of Central Financial Assistance (CFA) in the form of Viability Gap Funding (VGF), to be released as per the provisions contained in this RfS. 

To supply energy to the offshore wind power developers, the tender mandates, “The Bidders will declare the annual CUF of the projects at the time of submission of their response to the RfS, and the OWPD will be allowed to revise the same once within the first three years after the Scheduled Commencement of Supply Date (SCSD). The revised CUF shall be greater than the CUF initially quoted by the bidder. After that, the CUF for the project shall remain unchanged for the entire term of the PPA.” Additionally, the document added, “PPA will be signed at a fixed Applicable Tariff of Rs. 4.50/kWh.”

Revised CUF

The tender further elaborated, “The declared/revised annual CUF shall in no case be less than 40%. The OWPD shall maintain energy supply to achieve an annual CUF of not less than 80% of the declared/revised value and not more than 120% of the declared/revised CUF value, during the PPA duration of 25 years. The lower limit will, however, be relaxable by SECI to the extent of non-supply on account of Force Majeure. The OWPD is free to generate energy in excess beyond the upper limit corresponding to 120% of the quoted CUF and sell it to any third party, subject to the first right of refusal of such excess energy being vested with SECI/Buying Entity. However, SECI/Buying Entity is not obliged to purchase such excess power offered by the OWPD.”

The OWPD may choose to install additional wind turbines in the project, with a total installed capacity not exceeding 550 MW, subject to the following conditions: i. Details of the overall project configuration, including additional capacity that the OWPD is proposing to install in the project, must be provided within 30 days of issuance of the LoA.

Going by international benchmarks, the reference bid for this tender is likely to be over Rs 6 per unit, which is where the viability gap funding will come in to try and bring it to an acceptable level for potential offtakers.