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In a recent development in the power procurement sector, M/s Scoobee Day Garments India Limited, hereinafter referred to as the petitioner, has submitted a petition to the Commission. They aim to secure approval for a revised capacity of 4 MW/4.2 MW for their wind power project located in Palakkad, Kerala. This petition emerges against the backdrop of a significant tender issued by the Kerala State Electricity Board Limited (KSEBL) on December 8, 2021.
This tender was designed to facilitate the procurement of 100 MW of grid-connected wind power projects in Kerala through a tariff-based competitive bidding process, following the Build, Own, and Operate (BOO) model with a 25-year tenure. The guidelines for this tender adhered to those published by the Ministry of Power, Government of India.
However, due to unique challenges in Kerala, such as a shortage of available land and the intricate terrain, KSEBL had to make certain adaptations. One key change included the reduction of the minimum bid capacity to 5 MW, and the minimum project size at a single site was adjusted to 2 MW. Additionally, a ceiling tariff of ₹4.10 per unit was stipulated in the bid documents.
The bidding process took an unexpected turn when the L1 bidder offered only 10 MW, significantly less than the 100 MW bid quantum. In response to this development, KSEBL asked other bidders to lower their quoted tariffs to match the L1 rates. Nevertheless, two bidders, M/s Inkel Limited and M/s Pioneer Wincon Energy Systems Private Limited, were unwilling to adjust their rates. In contrast, M/s Scoobee Day Garments Limited displayed flexibility by reducing their tariff from ₹4.10 per kWh to ₹4.09 per kWh, aligning with the L2 rate.
Subsequently, the Commission issued a Common Order on October 19, 2022, which endorsed deviations from the Ministry of Power’s guidelines and adopted the L1 tariff derived from the tender. It is important to note that the Commission rejected KSEBL’s proposal to issue Letters of Intent (LoI) to bidders other than L1 at tariffs higher than the L1 rate. Instead, KSEBL was granted permission to engage in further negotiations with bidders who had quoted tariffs exceeding the L1 rate, with the option to enter into agreements with them for power procurement at the L1 rate.
M/s Scoobee Day Garments, in a proactive move, expressed their willingness to reduce their tariff to the L1 rate of ₹3.96 per unit in a letter dated June 22, 2023. However, they also reduced their offered capacity from 6.3 MW to 4.2 MW and sought KSEBL’s acceptance of the revised capacity.
KSEBL responded by reminding the M/s Scoobee Day Garments that the minimum bid capacity, as per the tender approved by the Kerala State Electricity Regulatory Commission (KSERC), was set at 5 MW. Consequently, KSEBL urged the petitioner to offer at least the minimum bid capacity of 5 MW.
As a result, M/s Scoobee Day Garments filed a petition, with the Commission. Their request was two-fold: they sought a review of the minimum bid capacity and sought approval for the installation of a 4 MW/4.2 MW capacity project at the L1 rate of ₹3.96 per unit.
A hearing on the petition was convened on October 4, 2023, with representatives from both parties present. During the hearing, M/s Scoobee Day Garments reiterated their initial participation in the KSEBL bid for procuring 100 MW of wind power through competitive bidding. Their initial bid offered 6.30 MW of wind power at ₹4.10 per unit, sourced from their land in Palakkad.
The respondent, KSEBL, underscored the scarcity of available land and the challenging terrain in Kerala, which necessitated the reduction of the minimum bid capacity and project size. KSEBL also highlighted that M/s Scoobee Day Garments’ offered quantum fell below the minimum bid capacity, resulting in their exclusion from the competitive bidding process for the 100 MW wind power procurement.
The Commission emphasized the need for clarity regarding whether KSEBL would consider the purchase of wind power from M/s Scoobee Day Garments at the L1 rate of ₹3.96 per unit for their reduced capacity of 4.2 MW.
The M/s Scoobee Day Garments was directed to provide comprehensive information about their land, including its current utilization, unutilized land, and the impact of the EHT line traversing their property. They were also required to submit the wind potential study report for their project site.
KSEBL was instructed to file a counter affidavit, and the M/s Scoobee Day Garments was allowed to submit a rejoinder, if necessary. Both parties were expected to adhere to specified timelines, and the Commission planned to schedule the next hearing separately.
Please download the document here for more details.
