SECI’s Unique Business Model: Powering India’s Renewable Energy Growth

The Solar Energy Corporation of India (SECI) plays a crucial role in the development of renewable energy (RE) projects in India through a unique business model that aligns with the country’s ambitious goal of reaching 500 GW of installed renewable energy capacity from non-fossil sources by 2030. SECI is one of the Renewable Energy Implementing Agencies (REIAs) appointed by the Ministry of New and Renewable Energy (MNRE), and it works alongside other agencies to fulfill this national target.

The process begins with the MNRE and Ministry of Power (MoP) issuing standard bidding guidelines for various RE projects, including solar, wind, hybrid, and Round The Clock (RTC) tenders. SECI, as well as other REIAs, invites tenders based on the Bidding Trajectory set by MNRE using a transparent electronic bidding method. This allows both private and public participants to submit bids. Following the e-bidding and e-Reverse Auction process, the lowest tariffs are determined, and the available capacity is offered to Distribution Companies (DISCOMs) across India for power procurement.

Once the tariffs are discovered, SECI’s website publishes the details, enabling DISCOMs to select the capacity they need at the specified tariff. If the discovered tariff is high and no DISCOM agrees to the price, bidders may voluntarily lower the tariff. DISCOMs then seek internal approval and provide their consent for the power offtake, after which SECI signs a Power Sale Agreement (PSA) with DISCOM.

After the PSA is signed, SECI enters into a Power Purchase Agreement (PPA) with the winning bidders. During the project implementation phase, SECI monitors progress and helps resolve issues. Once the project is commissioned, SECI acts as an intermediary power trader, purchasing electricity from the projects and selling it to the DISCOMs as per the PPA/PSA terms.

SECI’s involvement in these projects offers several benefits. It helps developers secure better financing options due to SECI’s higher credit rating, which improves the projects’ viability. SECI’s presence also leads to lower RE tariffs, benefiting consumers. Additionally, SECI has a strong track record of meeting payment commitments to developers, even when payments from DISCOMs are delayed. To date, SECI has awarded over 70 GW of RE tenders.