RFS DOCUMENT FOR

1000 MW GRID CONNECTED

SOLAR POWER PLANTS
IN ANDHRA PRADESH

SALIENT POINTS

efficientcarbon
 Salient features of AP 1000 MW Solar RfS (Draft)

RfS (Draft) release date: 5th December, 2012

Pre-bid meeting date: 14th December, 2012

Final RfS to be released shortly after Pre-bid meeting.

This document highlights the important features of the RfS bid document and attempts to point a
few issues identified through thorough review.

Capacity details:

Total Capacity: Approximately 1000 MW (Total Capacity identified with sub-stations is 1160 MW)

Minimum capacity for bidding: 1 MW

Number of bids allowed per company per location (sub-station): 1

Here is a table containing the different capacities of power plants based on the substation type and
voltage levels

Interfacing/Grid substation Capacity of Plant

S.No. Voltage Level
(interconnection point) (MW)
1 33/11 KV 33 KV 1-5
2 132/33 KV 33 KV 1-10
3 132/33 KV 132 KV 10-20

Companies eligible for participation:

i) Companies incorporated in India under the Companies Act 1956.

ii) A foreign company can also participate individually or as a member of consortium at RfS stage.
But before signing of PPA, keeping the original shareholding unchanged it has to be
incorporated as Indian Company registered under the Companies Act 1956.
iii) Limited Liability Partnership (LLPs)/ Limited Liability Companies (LLCs) are not eligible for
participation.

Also, each company is allowed to submit only 1 bid per location (chosen sub-station).

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Timelines:

S.No. Event Date

1 Notice for Request for Selection (RfS) As per the bid notification
2 Pre Bid Meeting As proposed in bid notification (14th Dec, 2012)
As per the scheduled date i.e., 45 days from the
3 Submission of response to RfS
date of notification of bids.
Opening of technical bid
4 Within 2 days from the date of bid submission.
Opening of financial bid.
Evaluation and Short-listing of
5 Within 15 days from opening of financial bid.
Bidders,
6 Issue of letter of intent Within 15 days from evaluation of bids.
Communication of acceptance of LoI
Within 10 days from the date of issue of LoI
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by successful bidder excluding the date of issue.
Within 30 days from the date of issue of letter of
8 PPA Signing
intent.
Submission of documents for financial closure /
Financial closure / Financing
9 Financing Arrangement within 60 days from the
Arrangement for the project
date of signing of PPA

Within 6 months for Solar PV and 13 months for

STP from the date of signing of the PPA (or) 8
10 Commissioning of the Project
months for Solar PV and 15 months for STP from
the date of issue of LoI, whichever is earlier

Process of selection of bids:

The procedure for bid selection as mentioned in the RfS document is as follows:

 Selection of eligible bidders will be based on least quoted price per commercial unit of
electricity.
 The bidders will be required to submit Financial Bid in format-6.12 quoting their lowest
minimum levelized tariff over a period of 25 years to survive the plant for whole tenure of the
agreement.
 The developer shall submit a Contract Performance Bank Guarantee (CPBG) to the concerned
DISCOM before issuing LOI, for the difference of amount between viable tariff determined by
the Committee constituted and the L1 tariff on the expected energy from the project in a year.
However CPGB is not required if the tariff difference is below 5%.
 In case any bidder does not communicate acceptance of the LoI within 10 days from the date of
issue of the LoI (excluding the date of issue), then his EMD (Bid security) and CPBG will be
forfeited and bids will be further processed.
 If some of the bidders do not agree for L1 price, L2, L3, L4………Ln whoever agrees will be called
for acceptance and LoI will be further processed .
 In the eventuality of a tie in the bidding process in a particular location, the applicant would be
selected by draw of lots.

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Power Purchase Agreement (PPA):

Once the LOI is accepted by the selected bidder, a PPA will be signed between the respective
DISCOM and the bidder. The PPA shall be valid for a period of 25 years from scheduled Commercial
Operation Date (COD).

A maximum variation of 10% in the rated output is permissible in the first one year. However,
DISCOMs shall not purchase any additional electricity generated beyond the PLF of 20% for Solar PV
and 25% for Solar Thermal plants. An annual reduction (resulting from degradation) of 1% is
permissible Year 2 onwards.

Technical Qualification:

Standard technical requirements seem to have been placed for both Solar PV and Solar Thermal
equipment. The following are the minimum criteria that Solar Panels (in case of Solar PV plants) and
Solar Thermal equipment need to meet:

Solar PV Module

 The PV modules used in the grid connected solar power projects must qualify to the latest
edition of any of the following IEC PV module qualification test or equivalent BIS standards:
o Crystalline Silicon Solar Cell Modules IEC 61215
o Thin Film Modules IEC 61646
o Concentrator PV modules IEC 62104
 In addition, PV modules must qualify to IEC 61730 for safety qualification testing. For the PV
modules to be used in a highly corrosive atmosphere throughout their lifetime, they must qualify
to IEC 61701.

Solar Thermal

 Only new plant & machinery to be used.

 Any of the Concentrated Solar Power (CSP) technology, such as, Parabolic Trough Collectors,
Solar Dish Stirling (or any other prime mover), Linear Fresnel Reflector, Central Tower with
heliostats, or their any other combination could be used.
 All grid connected solar thermal power plants will install equipment for regular monitoring of
solar irradiance (including DNI), ambient air temperature, wind speed and other weather
parameters and simultaneously for monitoring of the amount of electric power generated from
the plant. They will submit this data to the Ministry on line and/or through a report on regular
basis for the entire duration of PPA.

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Financial Criteria:

Net Worth:

The net worth of the bidder should be equal to or greater than the value calculated at the rate of Rs
1 Crore per MW. The Net Worth criteria should be met on any date within seven days prior to the
date of submission of RfS document by the Project Developer.

There seems to be some ambiguity with respect required documents to be submitted for the net
worth criteria to be satisfied. The bid documents in one place mentions requirement of annual
audited accounts for the last four financial years viz 2008-09, 2009-10 and 2010-11, 2011-12 (If the
period of existence of the company is less than four years, then accounts starting from the year of
incorporation) and in another place mentions only last financial year (2011-2012).

In case a new company, there has been no clear cut specification as to what qualifies as a new
company. But where annual accounts have not been prepared for a new company, the bid
document requires unaudited financial statements of the company too, for the date on which the
Certificate of Chartered Accountant has been obtained. New companies were given the provision to
seek qualification on the basis of financial capability of its parent, ultimate parent and / or its
affiliate(s) for the purpose of meeting the qualification requirements. But the required net worth has
to be infused in the project Company before signing of PPA.

In a consortium of companies, financial requirement is to be met as per the equity committed by

each of them in the project company. Until signing of the PPA with DISCOM, the project company
incorporated should maintain same share holding pattern as given at the time of RfS. The controlling
shareholding (> 50 % of the voting rights) should be maintained for a period of 1 year after
Commercial Operation Date (COD).

Guarantees:

The Bidders are required to provide:

Bid security:
 EMD in the form of BG or DD of Rs. 2 lakhs/MW DD drawn in favour of Pay
Officer/APTRANSCO (or) BG in favour of Chief Engineer/IPC/APPCC/APTRANSCO.
 Validity period - 90 days from the date of bid submission.
 Claim period: one month over and above validity period.

Performance Bank Guarantee:

 Before signing PPA.
 Valid for a period of 22 months from the date of submission.
 Three Numbers of Bank Guarantee in the amounts of Rs. 2, 3 and 5 lakhs/MW to
APTRANSCO/DISCOMs, at least 7 days before signing PPA.

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Land Requirements:

 2 hectares/MW i.e. 4.94 acres (~ 5 acres)/MW must be under clear possession of the project
developer. Ownership hold rights for at least 30 years in the name of the project developer
and possession of 100% of the area of land required for the project.
 Certificate by the concerned and competent revenue authority for the acquisition/
ownership/ vesting of the land in the name of the project developer.
 Sworn affidavit from the developer listing the details of the land and certifying total land
required for the project under clear possession of the project developer.
 All land documents must be submitted within 60 days of signing the PPA or at the time of
financial closure whichever is earlier.

Penalty for not meeting Commissioning deadlines:

The deadlines for Commissioning are as follows:

 Solar PV: 6 months from date of signing of PPA or 8 months from date of issue of LoI
whichever is earlier
 Solar Thermal: 13 months from date of signing of PPA or 15 months from date of issue of LoI
whichever is earlier

In the case of project developers not meeting this deadline, Performance Bank Guarantee (PBG)
shall be encashed as per following schedule:

 Delay up to one month from Scheduled Commercial Operation Date(COD): 2 lakhs/MW

 Delay of more than 1 month up to 2 months from Scheduled COD: 3 lakhs/MW
 Delay of more than 2 months up to 4 months from Scheduled COD: 5 lakhs/MW

Penalty for shortfall in supply of electricity:

While the monetary terms have not been mentioned, penalty will be computed based on difference
between minimum pre-determined level of electricity generation (80% of expected energy
generation) and actual quantum of electricity generated during the given year.

Clarification needs to be made as to whether the monetary penalty would be the product of this
difference in energy and the tariff at which PPA has been signed.

Documents to be submitted for bid submission:

The following is the list of documents to be submitted in response to the RfS:

1. Demand Draft/Receipt of cash payment made towards cost of the RfS.

2. RfS document duly signed and stamped on every page.
3. Covering Letter (as per Format 6.1 in the RfS document)
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4. Power of Attorney/Board Resolution (as per Format 6.2 in the RfS document)
5. Earnest Money Deposit (EMD) in the form of Demand Draft
6. Processing fee in the form of Demand Draft
7. Performance Guarantee (as per Format 6.3 in the RfS document)
8. Board Resolution (as per Format 6.4 in the RfS document)
9. Consortium Agreement (as per Format 6.5 in the RfS document)
10. Financial Requirements criteria (as per Format 6.6 in the RfS document)
11. Technical Criteria (as per Format 6.7 in the RfS document)
12. Letter from Developer confirming connectivity (as per Format 6.8 in the RfS document)
13. Disclosure Statement (as per Format 6.9 in the RfS document)
14. Technological Tie Up (as per Format 6.10 in the RfS document)
15. Checklist of Bank Guarantee (as per Appendix-A in the RfS document)
16. Data Sheet (as per Format 6.11 in the RfS document)
17. Tariff Bid (as per Format 6.12 in the RfS document)
18. Calculation of Net worth
19. Memorandum and Articles of Association
20. Certificate of Incorporation
21. Annual audited accounts for the financial year 2011-12 and also for relevant years as per RfS. All
financial documents submitted along with the RfS must be signed on allpages by the Chartered
Accountant.
22. Shareholding pattern indicating the controlling shareholding certified by chartered accountant.
23. Shareholding pattern statement of the Foreign Company, duly certified by competent authority.
24. Proof of listing in the Stock Exchange if a public limited company.
25. Submission of bid document and all other relevant documents in English language only.
26. Any other document mentioned in the RfS or PPA.

List of sub-stations: As per the RfS document, the capacities mentioned for each 132/33 KV
substation are cumulative of capacities available at the 33/11 KV substations under the respective
132/33 KV sub-stations. Download the list of sub-stations identified by APTRANSCO for the 1000
MW capacity addition here.

A few issues identified:

1. Non-refundable Processing Fee of Rs.2 Lakhs is a very high amount to be shelled out just for
submitting the bids.
2. Financial Criteria: Ambiguity prevails regarding the submission of audited financial records is
for the last 4 years or 1 year.
3. New Company: No specific definition has been provided as to what a new company refers
to. It could be a company that has been just established for the purpose of participation in
the RfS which may or may not have financial records/statement or it could mean a company
that has been in existence for less than an year and has considerable data.

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4. Penalty for Shortfall in supply of electricity: The penalty has been mentioned only in terms
of the difference between minimum pre-determined level of electricity generation (80% of
expected energy generation) and actual quantum of electricity generated during the given
year. Though it is most likely to be the value of this energy deficit at PPA tariff, no clear
indication has been given in the document.
5. Earnest Money Deposit (EMD): An EMD of Rs.2 lakh/MW has to be deposited at the time of
submission of bids. However, no mention has been made as to who will be entitled to
receive a refund of this amount and when such a refund would be made.
6. No payment security mechanisms such as Letter of Credit (LC) to ensure timely payments to
the selected bidders.
7. Committee determined benchmark Price: This benchmark price has been specified to play a
role in determining the Contract Performance Bank Guarantee (CPBG). However, it has not
been mentioned how this price will be arrived at and when it will be disclosed.
8. Performance Bank Guarantees (CPBG): 2 different formats (Forms 6.3 and 6.13) for Bank
Guarantees have been provided in the ‘Formats for Bid Submission’ section in the RfS
document. Both these documents contain the same information and hence a clarification
regarding the same is required.
Moreover, the definition of CPBG itself is ambiguous and there is no justification as to why
this amount is to be paid by successful bidders to DISCOM (in the case of difference between
L1 price and committee determine benchmark price is less than 5%). In addition to this,
Annexure B (Page 87) says that CPBG is not required in case the price difference is not less
than 5% while point 3.7 (c) of ‘Selection process of bidders’ (Page 27) states that CPBG is not
required if the price difference is less than 5%.

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 Appendix
Solar PV and Solar Thermal Benchmark Costs by CERC

As per Suo-Motu petition 242/SM//2012 dated 25th October, 2012, Central Electricity Regulatory
Authority (CERC) proposed that the Benchmark Capital Cost for Solar PV and Solar Thermal projects
for 2013-14 be Rs.8 Crores/MW and Rs.12 Crores/MW respectively. Here’s a breakup of the costs for
Solar PV projects as recommended by CERC:

Capital Cost Norm for Solar

S.No. Particulars % of total cost
PV project (Rs. Lakh/MW)
1 PV Modules 344.50 43%
2 Land Cost 16.80 2%
3 Civil and General Works 94.50 12%
4 Mounting Structures 105.00 13%
5 Power Conditioning Unit 60.00 7%
Evacuation Cost up to
6 Interconnection point (Cables 105.00 13%
and Transformers)
Preliminary and Pre-Operative
7 Expenses including IDC and 80.00 10%
contingency
Total Capital Cost 805.80 100%

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