NTPC to acquire running solar projects to expand renewable portfolio (Ld)

In a major acquisition spree, country’s largest power producer NTPC has invited bids to buy operational solar power projects of 50 MW and above to expand its non-fossil fuel based project portfolio.

This is the first time that the state-owned power generator has evinced interest in acquiring operational solar projects. Earlier, the company had invited bids to procure solar power and appoint developers to set up projects for the company.

As per the plan, the company proposes to initially acquire solar power assets located in India for a minimum capacity of 1000 MW. The acquisition will involve entire 100 per cent equity purchase by the NTPC into a special purpose vehicle or standalone asset willing to sell its plant.

To be sure that it’s offer gives it scale, NTPC has decided to invite bids for sale only from developers having minimum installed capacity of 50 MW in a single location. Also, target operational projects should also have a valid power purchase agreement with an approved tariff of not more than Rs five per kWhr. It should also be operational for at least one year prior to the bid submission and have operational evacuation line with central or state transmission utility.

The acquisition plan is part of the NTPC goal to add 10GW of solar generation capacity by 2022, with an investment of around Rs 50,000 crore. In fact, as per its 2032 vision document, the company plans to have a minimum of 32000 MW capacity through RE sources constituting nearly 25 per cent of its overall power generation capacity. RE portfolio of NTPC has ongoing capacity addition projects with around 2298 MW projects under construction.

Though not specifically mentioned in the tender document, official sources said that NTPC has decided to acquire only such plants that are being operated using local equipment and not largely based on imported solar cells and modules, particularly from China.

To support government’s Atmanirbhar Bharat mission and development of domestic capacities, Power ministry is looking to incentivise solar projects using domestic equipment and wants to deter development of projects using imports. In solar sector, around 80 per cent of equipment currently in use is from China.

The last date for the submission of techno commercial bids on NTPC tender is September 22 and the financial bid or price bid opening would be intimated later after opening the techno commercial bids.

To get wider participation, NTPC has invited selling bids from promoters, lenders, financial intermediaries power generation companies and independent power producers.

The NTPC’s acquisition plan is expected to be lapped up by several solar power generators looking to exit the sector after facing regulatory hurdles and difficulties in pricing power on renewed terms that some states are now pushing.