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Innovative RESCO tender attracts 31+ domestic and international bidders for 35 MWp Solar rooftop project in Madhya Pradesh. Financial bids opened today

Innovative RESCO tender attracts 31+ domestic and international bidders for 35 MWp Solar rooftop project in Madhya Pradesh. Financial bids opened today

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  • Tender capacity oversubscribed its tender capacity by more than 630%
  • Tariff range quoted between Rs. 1.69 per unit and Rs. 2.35 per unit

National: Madhya Pradesh has achieved spectacular bid results with its innovative Solar Rooftop RESCO program. This has laid down path for fast track adoption of solar rooftops in the country. Solar rooftop sector has been struggling with issues like significant upfront cost for individual consumers and lack of enabling framework for Independent Power Producers (IPPs) to develop scalable business model. The bid results for 35 MWp Solar Rooftop tender are testimony to numerous policy, contractual and procedural innovations deployed in the RESCO program to find solutions to these gaps.

Madhya Pradesh’s RESCO tender attracted 31 international and domestic bidders, who oversubscribed its 35+ MWp rooftop tender capacity by more than 630%.

Amongst all State Government buildings, the lowest rate is for municipal bodies, which would get power at Rs. 1.69 per unit. Tariff of Rs. 1.74 per unit has been discovered for medical colleges, which is about one fourth of what they are presently paying. PowerGrid, a Central Government PSU, was also a beneficiary in the tender and has got a rate of Rs. 1.58 per unit, which is the lowest in country so far. Police establishments all over the State would enjoy power at Rs. 2.33 per unit. All government engineering colleges, ITIs and polytechnics would get power at Rs. 2.35 per unit. The lowest rate amongst private institutions have been Rs. 2.28per unit.

RESCO model facilitates the beneficiary consumer to enjoy solar power with zero upfront investment and at rates much below the prevailing DISCOM rates. The beneficiary consumer pays for the electricity as it is generated by the selected contractor, who undertakes design, supply and installation, along with comprehensive Operation & Maintenance for 25 years. The selection of the Contractor is made on the basis of the lowest tariff offered in transparent electronic bidding.

Under this tender, 291 government colleges across the length and breadth of the State would have a total of 5399 kW of solar systems set up, ranging from a 80 kW system in Motilal Vigyan Adarsh Mahavidyalya, Bhopal to a 10 kW system in Government College in Deosar town of Singrauli district, a good 675 km away from Bhopal adjacent to Sonbhadra district in UP, and a 15kW system in Govt. Mahaveer College in Petlavad town in Jhabua, 211 km away from Bhopal adjoining Gujarat. These Government colleges would have to make no capital investment at all and would get solar power at Rs 2.21 per unit, which is one fourth of their present rate. This would lead to first year saving of Rs 3.95 crore to government colleges of the State, which can be used to improve their educational infrastructure. Similarly, Government universities in Bhopal, Jabalpur, Gwalior, Rewa, Ujjain and Sagar, as also Rajiv Gandhi Proudyogiki Vishwavidyalaya at Bhopal, Agriculture University in Jabalpur, Ambedkar University of Social Science in Indore, Indira Gandhi National Tribal University at Amarkantak and Sanskrit University in Ujjain, would have a total of 4000 kW systems with solar power at only Rs 1.91 per unit with a first year saving of Rs 2.31 crore.

Medical colleges in Gwalior and Sagar would have solar systems of 1000 kW each, and Rewa would have a 1500kW solar system without any capital cost. They would get solar power at Rs 1.74 per unit at less than one-fourth of their present cost. This would lead to an annual savings of Rs. 2.10 crore to these medical colleges and a total saving of Rs 76.5 crore over project life, which can be used to address their important needs.

156 police establishments all over the State would have a total of 3458 kW of solar systems set up; they would get solar power at Rs 2.33 per unit leading to an annual saving of Rs 2.30 crore and Rs 84 crore over project life. All government engineering colleges, ITIs and polytechnics would have a total of 2168 kW of solar systems set up; they would get solar power at Rs 2.35 per unit, leading to an annual saving of Rs 1.07 crore, which could be used to strengthen them.

Water pumping stations of municipal bodies of Gwalior, Devas and Balaghat would have solar systems installed with a total capacity of 5200 kW. They would get solar power at Rs 1.69 per unit leading to an annual saving of Rs 2.46 crore.

Beneficiary consumer groupMinimum tariff under RESCO* (Rs./kWh)Annual savings of electricity cost (Rs.)
Colleges under Dept. of Higher Educations in MP2.213.95 Crore
Govt. Medical Colleges under Dept. of Medical Education1.742.10 Crore
Institutions of Central Government/ National Importance1.673.01 Crore
Govt. Universities in MP1.912.31 Crore
MP Police Establishments2.332.30 Crore
Govt. Engineering/Poly-Technic/ITI Colleges in MP2.351.07 Crore
Municipal Corporations/Nagar Palika Parisad in MP1.692.46 Crore
Central Gov. Undertaking – PGCIL1.581.31 Crore
Private entities2.281.73 Crore

* First year tariff will escalate at 3% per annum over 25 years project life

Numerous policy, contractual and procedural innovations and best practices were deployed and followed by MPUVN in this RESCO program, some also emanating from the learnings of the Rewa project, which has made this low tariff possible. Pre-identification of 643 project sites and grouping them into 27 project groups created the much needed market. This saved bidders from spending their energy in identifying procurers that have sufficient electricity demand and space for rooftop solar solutions. Further, it enabled good economies of scale, efficient material procurement, project execution planning and efficient financing. MPUVNL had extensively collaborated with the beneficiary consumers to obtain pre-clearance on the terms of Power Purchase Agreements, which usually comes in the way of implementation of a typical RESCO project. First time in India for the ease of doing business, unique data room is created and made accessible to the bidders to address information asymmetry. This includes information like google coordinates of the buildings, indicative Solar PV array layout superimposed on Google image and electricity consumption history. The bidders even knew the number of panels and inverters, and the length of cable needed to implement the project. This greatly reduced the risk profile of the projects and enabled more informed bid participation. This data room was developed with Technical Assistance from the World Bank. Complete contractual clarity was provided to the bidders on effecting change of law, facilitative cash flow, outcome driven project monitoring, early monetization, deemed generation, payment security, compensation on early termination, etc. The documents have an appropriate risk allocation between building-owners, RESCO developers and MPUVN. Extensive pre-bid consultations were held with the prospective bidders during the conferences held at Bhopal and Delhi. Discussions were also held with prominent lenders for enhancing bankability of project contracts. Workshops for commercial and industry consumers were conducted in four cities in MP to generate interest from private entities for solar rooftops and so as to facilitate concessional financing.

The RESCO project in MP is being implemented as a part of the larger Rooftop Solar Program of GoI with support from World Bank and International Solar Alliance. The idea is that the good practices of Madhya Pradesh should be replicated in other States as also ISA member-countries. The International Solar Alliance live webcast the proceedings of the pre-bid in New Delhi on their site to their 121 member countries. Earlier, the National Focal Points of ISA Member countries had visited Madhya Pradesh and showed a great interest in the rooftop program and also other solar programmes in the state.

The Hon’ble Chief Minister of Madhya Pradesh, Shri Shivraj Singh Chouhan has stated that Madhya Pradesh plans to be in the forefront to fulfill the commitment made by the Prime Minister to the world, of having 100 GW solar by the year 2022. He recalled that 750MW project at Rewa implemented by Madhya Pradesh had been recognized the world over as a model project and had for the first time brought down the price of solar energy below grid parity. He expressed satisfaction that, even with small rooftop projects, Madhya Pradesh has breached another frontier. He said that the savings made in government colleges, medical colleges, engineering colleges, police, ITI, polytechnics, etc. would now be used for the betterment of these institutions, apart from showing a path to other States.

Contact: 

Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL)

Urja Bhawan Link Road No. 2

Shivaji Nagar, Bhopal – 462016

Telephone No.: +91-755-2553595, 2556566, 2767270

Fax No: 91-755-2553122

For more information, follow twitter handle @MPUVN_Bhopal

Anand Gupta Editor - EQ Int'l Media Network

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