Mahindra lowest bidder again in India’s Andaman solar-storage retender

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Flickr: Sankara Subramanian

UPDATE: Major Indian solar EPC firm Mahindra Susten has put in the lowest bid for a solar and energy storage auction in the Andaman and Nicobar Islands for the second time, having seen its victory in the original auction torn away by authorities as they reportedly explored other sources of power generation.

The company has now quoted a price of ~INR1.33 billion (US$20.29 million) for the 20MW of solar PV and 8MWh of energy storage up for grabs from state-run mining and power firm NLC India. 

However, there is a clause in the bid, which says that bidders with more than 50% local content will be given a chance to match the L1 price. Both Larsen and Toubro and Bharat Heavy Electricals bid with eligible local content and will be given a chance to match the Mahindra price.

The results were as follows:

Rank Bidder Final Price (INR) US$ (million)
L1 Mahindra Susten 1,327,938,040 ~20.291
L2 Pennar Engineered Building Systems 1,337,938,040 ~20.444
L3 Larsen and Toubro 1,377,938,040 ~21.055
L4 Hero Solar Energy 1,407,938,040 ~21.513
L5 Bharat Heavy Electricals 1,487,938,040 ~22.736

Manish Singhal, head, business development of Mahindra Susten, told PV Tech: “Mahindra Susten has shown it's strong commitment again towards PV-plus-storage solutions, which is a result of our two-year effort and a strong in-house technology team. We aspire to be at the forefront of this emerging opportunity worldwide.”

In 2017's original bidding, hailed as India’s first successful, large-scale, solar-plus-storage auction, Mahindra won by quoting a price of INR2.99 billion (US$46 million), but in January NLC India scrapped the tender. While it remained quiet on the issue, other industry commentators said that the Ministry of Power had been keen on exploring alternative sources of power generation in the Andamans – quite likely an LNG-fueled power facility.

At the time, Singhal said Mahindra was disappointed at the government’s meddling with the original tender, but said it was willing to continue working closely with the authorities on this promising hybrid technology. However, he also said: “Events like scrapping of NLC tender after it is opened – that too at a price which is significantly lower than government estimates – do not give comfort to players who are looking to enter Indian storage market and the government should be cautious about taking such decisions.”

NLC subsequently issued a new tender, with the storage element significantly reduced to just 8MWh of energy storage, down from the 28MWh of storage set for the original tender. The solar PV capacity remained at 20MW.

The viability and suitability of solar and storage on the Andaman islands is clear, since the local government usually has to ship fuel for 1,200 kilometres and burn it on inefficient diesel gen-sets.

Hybrid renewable energy projects entered bold new territory this week, when Indian developer Hero Future Energies launched the country’s first solar-wind hybrid project in the state of Karnataka (see PV Tech blog from inauguration). The addition of the third pillar, energy storage, is also gaining momentum with wind-solar-storage activity in Andhra Pradesh and Kerala.

Article corrected to include local content caveat and to say that three companies are still in the running.

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