State-owned Indian Oil Corporation Ltd (IOCL) has for the second time withdrawn a tender for the construction of India’s first green hydrogen plant at its Panipat refinery in Haryana, the Economic Times reported.
IOCL marked the tender as “cancelled” on its website on Monday. The tender was withdrawn as only two bids were received, the report, citing sources, said. The bidders were previously reported to be Noida-based GH4India and Neometrix Engineering.
This tender was special because it was the first time that India determined the cost of green hydrogen through competitive bidding.
GH4India is a partnership of IOCL, ReNew Power and Larsen & Toubro, with 50% ownership.
The cancellation of the first tender
In August last year, IOCL had invited bids for setting up a 10,000 metric tonne per annum green hydrogen production unit at its Panipat refinery. The unit would be built, owned and operated for 25 years.
According to the tender conditions, the winning bidder had to start supplying hydrogen gas within 30 months of the project award. The project included a 75 MW electrolyser capacity to generate 300 MW of clean energy, with a total capital expenditure estimated at $400 million.
However, industry participants highlighted several clauses in the bid document that appeared to favor GH4India. The first tender was reportedly canceled after an industry association filed a case in the Delhi High Court, arguing that some of its terms were anti-competitive and biased in favor of GH4India.
Determining the price of green hydrogen
This initiative was meant to be India’s first attempt to price green hydrogen through a bidding process. Despite initial interest from leading engineering and industrial gas companies, many did not submit bids, mirroring the outcome of the previous year’s tender. That earlier tender also faced legal challenges over allegations of anti-competitive practices.
IOCL explained that the second tender procedure included a number of extensions to allow bidders sufficient time to submit their proposals.
About 30 entities obtained pre-bid documents in May, including Indian companies such as Inox-Air Products, Acme, Tata Projects and NTPC, as well as international companies such as Siemens, Petronas/Gentari and EDF. Technical bids were opened recently, with the date for the price bid announcement yet to be determined.
Why were bidders afraid?
Potential bidders have raised concerns about the eligibility criteria, in particular the requirement for experience in operating hydrogen systems, EPC and electrolysers. The criteria stated that a qualified bidder must have EPC experience and have operated a refinery, petrochemical plant or fertiliser plant for at least 12 months.
This has led to some potential bidders requesting an extension of the deadline to form joint ventures with industrial gas producers, as only a limited number of companies have the required size and experience.
First print: Aug 6, 2024 | 1:15 PM IST