JNNSM Phase 2 bids announced – A comprehensive analysis

SECI opened the bids under batch 1, phase 2 of the JNNSM yesterday. Contrary to popular opinion, the response from the developers has been overwhelming with the total capacity bid for under the scheme standing at about 2170 MW as opposed to an allocation target of 750 MW.

2170 MW has been bid for across 68 projects. In the Domestic Content Requirement(DCR) category which aimed to allocated 375 MW, bids totaling 700 MW were received. The non-DCR category (which allows developers to use imported modules) saw bids totaling about 1470 MW as against an allocation cap of 375 MW. It is fairly clear that the developers are favoring the non-DCR category due to greater flexibility in sourcing components for the projects. There are 32 projects in the DCR category and 86 projects in the non-DCR category. Interestingly, the average project size is higher in the DCR category – standing at about 22 MW as opposed to 17 MW in the non-DCR category.

JNNSM Phase 2

While it was speculated that more developers would be aiming to go for the 200 MW cap across both categories, only one developer – Azure Power has bid for the entirety of the 200 MW (100 MW in DCR and 100 MW in non-DCR). (ACME is also reported to have bid for the entire 200 MW through different group companies). Azure is followed by Welspun who have bid for a cumulative capacity of 160 MW (60 MW in DCR and 100 MW in non-DCR). IL&FS closesly follows with 150 MW.

EPCs like Mahindra EPC, Shapoorji Pallonji(promoters of Sterling and Wilson) and BElectric Photovoltaic India are among the bidders.

Independent Power Producers(IPPs) like SunEdison, Solairedirect, Renew Power(backed by Goldman Sachs), Green Infra(backed by IDFC) and Hero Solar Energies are also in the fray. KSK Ventures is another notable bidder.

First Solar, the leading Thin Film manufacturer, has also bid for a project under the open category. Other PV manufacturers to bid include Tata Power(DCR category), Moserbaer Power Gen(DCR) , Waaree Energies(DCR) and Swelect Energy Systems( DCR) to name a few.(Swelect is a stakeholder in Bangalore based PV Manufacturer – HHV).

State utility companies to have taken part in the bid include West Bengal State Electricity Distribution Company, Gujarat Power Corporation Limited, Karnataka Power Corporation Limited and Gujarat State Electricity Corporation Limited. The PSU, Neyveli Lignite Corporation Ltd, has also bid.

Interestingly, some big developers such as Kiran Energy(backed by PEs like Bessemer)  and SunBorne Energy(Backed by Khosla ventures) did not take taken part in the bid.

Of the total 68 bids, only 13 bids have opted for capacity allocation under both categories. Of this, 9 bids have an even split between the two categories bidding for an equal capacity under both categories indicating an equal distribution of project risk. The remaining developers have significantly favoured non-DCR based projects over DCR based projects which as stated previously might be due to greatly flexibility in component choice and sourcing offered by the non-DCR category.

Please note that this is preliminary data which is subject to change pending a formal announcement by SECI. The financial bid will be opened by 20th February 2014 and it would be interesting to note what kind of VGF differences exist between the DCR and non-DCR categories considering the differences in pricing strategies (especially that of modules) between the two categories.

Please come back for more updates.

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