Draft guidelines released for 3,000 MW solar PV projects

The Union Ministry of New and Renewable Energy (MNRE) has released draft guidelines for selection of project developers for the 3,000 megawatt (MW) grid-connected solar PV power projects under the Jawaharlal Nehru National Solar Mission (JNNSM). Public and interested parties can send their comments and suggestions on the guidelines. The projects are to be allocated under batch II, tranche I of State Specific Bundling Scheme, under which the more expensive solar power would be bundled with less expensive thermal power from coal power plants chosen by states.

This is the first official document that mentions that government of India is planning to enhance the target for solar power apart from announcements from energy minister Piyush Goyal. In November 2014, Goyal had announced that JNNSM’s 20 gigawatt (GW) target by 2022 was being reset to 100 GW. The scheme document, however, does not give a specific number for the new target in spite of Goyal’s announcement.

The ministry plans to implement solar PV capacity of 3,000 MW through NTPC Vidyut Vyapar Nigam Limited (NVVN). In the draft released in October 2014, 15,000 MW were divided into three tranches (see table).

Break-up of 15,000 MW of Phase II, Batch II of JNNSM

Tranches	Capacity	Years	Scheme
Tranche-I	3,000 MW	2014-15 to 2016-17	Bundling with 1,500 MW unallocated NTPC Power from Coal Station allocated by MoP
Tranche-II	5,000 MW	2015-16 to 2017-18	Selection mechanism to be decided later
Tranche-III	7,000 MW	2016-17 to 2018-19	Selection mechanism to be decided later

“Since the 3,000 MW is under State Specific Bundling Scheme, we will indicate the total quantity for various states based on responses received from the states. NVVN may then procure that quantity through one or more state specific tenders,” states MNRE.

One of the new clauses mentioned in the draft scheme, which was absent in the previous draft, is the development of the projects in solar parks. The projects will be implemented by NVVN on solar parks to be developed through association of Central and state agencies. The bidder has to approach the Solar Park Implementation Agency (SPIA) for allotment of land and connectivity. The details of land and the timelines for availability, allotment, possession and connectivity for the projects before submission of bids will be provided by SPIA. This will include the cost of land, annual charges, and connectivity charges, which the developer needs to take into consideration in the bid.

NVVN will bundle the one unit of solar power with two units of unallocated thermal power from coal-fuelled power plants of NTPC in the ratio of 2:1 (2 MW of solar with 1 MW of thermal). In phase I, the bundled power was in the ratio of 4:1 (four units of thermal power to one unit of solar power). N K Sharma, CEO of NVVN, said, “the cost of bundled power has reduced since the cost of solar power has come down.” However, the guidelines are silent on the same issue.

Although the bid is primarily for projects to be located in solar parks, if the total capacity of solar power project bids are higher than the capacity allocated in the park, the developers will be given the option to locate the project either in the park or outside (to be decided on the basis the bid price—the lowest bidder gets first choice followed by the next and so on).
There are some questions unanswered in the draft scheme. It is indecisive about the domestic content requirement, which mandates sourcing of solar equipment from local market. It states that the decision will be taken at a later stage.

The capacity of 3,000 MW would be part of the 22,100 MW to be developed in 25 solar parks.  Also, the capacity allocated to each state has not been specified. The bidding process is also state-specific, and the base would be the benchmark set by Central Electricity Regulatory Commission.
 

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