First PSA of 500 MW Solar Power From ISTS Manufacturing Linked Scheme Signed With GRIDCO Limited At Bhubaneswar

• Though a small start considering the scale of the projects waiting for similar deals, the 500 MW deal with GRIDCO is a start.

• More deals in the coming months will finally kickstart what was meant to be India’s largest single developer and manufacturing play

Late last week, SECI (Solar Energy Corporation of India) announced the first power supply agreement (PSA) in connection with its manufacturing-linked solar tenders, floated in November 2019.

These were won by Adani Green and Azure Power finally. Signed in Bhubaneshwar between SECI and GRIDCO Limited (or Grid Cooperation of Odisha), a subsidiary of Odisha Electricity Regulatory Commission (OERC), the deal will see GRIDCO acquire 500 MW of solar power from SECI under the interstate transmission system (ISTS)-connected solar projects linked with manufacturing program (Tranche-I). GRIDCO will be buying the power to fulfill its renewable purchase obligation (RPO) targets.

Interestingly, one of the winners, Azure Power, had indicated in an investor meet that it expects a slight markdown in tariffs to get these projects moving.

This is the first deal to be signed under for the manufacturing-linked tender, which had seen developers Adani Green Energy and Azure Power emerge as bid winners in January 2020. Since the award of letters to them over a year ago, this massive batch of solar projects has been stuck on account of its large capacity and high discovered tariff, resulting in SECI not finding any discoms willing to sign PSA’s and move the process along. Now that GRIDCO has made the first deal, things might be looking up for the rest of the unexecuted solar projects.