Tuesday, October 15, 2013: MNRE (The ministry of new and renewable energy) has released revised draft guidelines for phase two, batch one of the National Solar Mission (NSM) programme. The renewed guidelines are reportedly addressing many concerns, which were raised earlier. The final guidelines will be announced in sometime.
The cabinet committee on economic affairs has given its nod to the implementation of 750 mw grid connected solar power projects of phase II batch-I of NSM (2013-17) with viability gap funding (VGF) support from the national clean energy fund (NCEF), reported mydigitalfc.com.
The Solar Energy Corporation of India (SECI) will be responsible for the allocation process as well as for providing VGF and sign the power purchase agreements (PPA). The body wants to sell the solar power to state distribution companies.
As part of the revised guidelines, it is now important to first gain confirmation from them to buy solar power under VGF scheme at Rs 5.50 kwh before issuing a request for selection (RfS) for the developers. The RfS document will be released by 21 November.
Bridge to India, a renewable energy firm said, “This process addresses a key concern for developers and help them chose right locations for their projects. Most developers look to high irradiation locations in the west and south of India. However, considering that states like Rajasthan, Tamil Nadu, and Karnataka are already meeting their RPO (renewable purchase obligation) targets, their state utilities may not be interested in buying power from SECI. On the other hand, states like Maharashtra, Bihar and Haryana that do not have a dedicated state policy in place and fall short of meeting their solar RPO targets might want to buy solar power from phase two of the NSM. It will be one of the cheapest options for them.”
The revised document has also cleared the confusion about the domestic content requirement (DCR) in solar projects. It has been stated that out of the 750 mw, 375 mw will have a DCR. The developers can opt for “DCR” or “Open” or both categories at the time of bidding, however, these will be followed by separate bids for DCR and non-DCR projects.
“It is expected that the tariffs for projects with DCR will be slightly higher. Indian cell manufacturers such as IndoSolar, Webel and Jupiter are expected to benefit the most. International suppliers such as ReneSola, which have contract manufacturing in India, are also likely to benefit,” added Bridge to India.
VGF mechanism stays pretty much the same in this draft too, however, disbursement of the incentive has been revised. The report added that VGF will be released in six tranches through a performance-based approach instead of three tranches announced earlier. It also stipulates penalties for delays in completion of the projects. The rules state that any project that is delayed beyond three months will become unviable.