Railway Energy Management Co. Ltd. (REMCL), a joint venture of Indian Railway and Rail Indian Technical and Economic Service Ltd. (RITES), has released an invitation for bids for the installation of 750MW of ground-mounted PV systems on vacant parcels of land owned by Indian Railway. According to reporting by various green energy news outlets and research agencies, REMCL has been designated by the Indian Railway as the entity that oversees the tender proceedings, project development efforts, and power supply distribution for 3GW of PV generation.
Interested parties will have to submit their bids by August 26, 2021. The information about the bidders and their prices will also be revealed on the same date. To be eligible for the bidding process, prospective bidders must have a net worth that is greater than or equal to INR 8 million per MW (of the quoted capacity) as well as an annual turnover of at least INR 4.145 million per MW. Bidders will also have to provide an earnest money deposit of INR 400,000 per MW. And upon the completion of the bidding process, successful bidders will have to provide a performance bank guarantee of INR 800,000 per MW.
The electricity generated by the projects under the tender will be sold under 25-year PPAs that are arranged between successful bidders and relevant railway zone authorities. It should be noted that prices quoted by bidders have to include statutory taxes, duties, levies, and other relevant fees.
Regarding project development, successful bidders will be responsible for not only system installation but also grid connection. They have to acquire the right to connect their projects to the transmission system belonging to either the Central Transmission Utility or the state transmission utilities. Depending on the circumstance, a project will be connected to the grid through a dedicated transmission line, or it will share transmission line with several other related projects.
In terms of specifications, the tender mandates that only technologies that are commercially established and operational can be deployed at project sites. This requirement is to ensure that projects have minimal technological risks and can be timely executed. The tender has domestic content requirements as well, so bidders need to consider the Approved List of Models and Manufacturers (ALMM) that is published by the Indian Ministry of New and Renewable Energy (MNRE) before submitting their offers. Cells, modules, and other types of key equipment will have to be locally sourced.
The annual capacity utilization factor (CUF) of this tender has been set at 17%, and individual projects will have to keep their generation levels within +10% and -15% of the declared value for the first 10 years starting from their commissioning dates. Afterwards, the CUF will drop to 15%, and projects will have to keep their generation levels within +10% and -20% of the declared value until the expiration of their 25-year PPAs.
As for other requirements concerning performances of individual projects under this tender, each project has to attain a minimum profit of INR 830,000 per MW as of the last date of the financial year.This amount is before depreciation, interest, and taxes. Bidders should have, in principle, an approval letter from a lending institution indicating that the lender will be committing a line of credit of INR 1.036 million per MW toward meeting the capital requirement of the project.
In addition to the 740MW tender, REMCL has also floated another 400MW tender. The PV projects under this tender will also be built on lands owned by the Indian Railway. However, their business models will be based on the capital expenditure model, under which a project developer can hire an EPC company to provide an entire generation asset.