The Kerala State Electricity Regulatory Commission recently reviewed a petition filed by the Cochin Port Authority (CoPA) concerning a proposed 1.5 MW floating solar photovoltaic (PV) plant at Willingdon Island. The petition sought approval for the draft tender document and Power Purchase Agreement (PPA) aligned with the Ministry of Power’s updated guidelines from 2023.
Initially, CoPA invited tenders under the Renewable Energy Service Company (RESCO) model, setting a 28% Capacity Utilization Factor (CUF) as a performance benchmark. However, the tender process drew minimal interest, with only a single bidder, SAPSON Solar System, participating. The bid was ultimately rejected due to failure to meet qualifying criteria related to work experience and financial turnover. The lack of response was attributed primarily to the high CUF requirement, which made achieving the target expensive and commercially unviable.
In response, CoPA filed a review petition seeking a reduction in the CUF. The Commission acknowledged the practical challenges associated with achieving a 28% CUF and revised the requirement, allowing bidders to propose a minimum CUF of 21%, with additional weightage for higher CUF quotes. This adjustment aimed to encourage greater participation while ensuring competitive efficiency.
During subsequent deliberations, CoPA amended its tender documents in compliance with the Ministry of Power’s guidelines. Specifically, the revised draft introduced the Quality-Cost-Based-Competitive (QCBC) formula for evaluating technical and financial bids, granting 20% weightage to technical performance, including CUF, and 80% to financial bids. However, the Commission flagged concerns over potential deviations from the prescribed guidelines, which explicitly require tariff per unit as the sole evaluation parameter. The Commission emphasized that prioritizing CUF over tariff could lead to higher procurement costs for solar energy.
Following a hearing, the Commission directed CoPA to modify the bid evaluation process. The final approved format stipulates that bidders quoting the lowest tariff (L1) will be prioritized, while higher CUF will act as a tie-breaking criterion in cases of identical tariffs. The revised provisions also include penalties for shortfalls in generation and mechanisms for dealing with excess energy generation. Specifically, penalties amounting to 1.5 times the tariff will apply for energy shortfalls below the minimum CUF, while surplus generation may be sold to third parties, with the procurer having the right of first refusal.
The Commission also ensured that the bidding documents aligned entirely with the Ministry’s updated guidelines, mandating proper structure, indexing, and numbering of all clauses. It reiterated that the CoPA must seek formal tariff adoption under Section 63 of the Electricity Act, 2003, post-bidding and submit the finalized PPA for approval.
The Commission approved the revised draft tender documents and PPA with necessary modifications, emphasizing compliance with regulatory standards and safeguarding competitive procurement processes. The petition was subsequently disposed of with instructions for CoPA to proceed accordingly.
