The Ministry of New and Renewable Energy has released draft guidelines for selection of 3,000-MW grid-connected solar photovoltaic power projects under Batch II Tranche I of the second phase of National Solar Mission.

A total of 15,000 MW of solar PV capacity is proposed to be added in three tranches as part of Batch II of the second phase of NSM. Tranche I will run from 2014-15 to 2016-17. In Tranche II (2015-16 to 2017-18) and Tranche III (2016-17 to 2018-19), solar PV capacity of 5,000 MW and 7,000 MW respectively will be added.

The draft guidelines lay down the policy and operational framework for development of 3,000 MW solar PV projects under Batch II Tranche I of the second phase of NSM adopting the bundling scheme. NTPC Vidyut Vyapar Nigam Ltd will implement the projects on solar parks to be developed through association of central and state agencies. As in phase-I of NSM, the bundling mechanism will be adopted to facilitate grid-connected solar power generation.

For Tranche II & III, the mechanism has not yet been decided.

Under the bundling mechanism adopted for Tranche I, 3,000 MW will be bundled with 1,500 MW thermal power from the unallocated quota of Ministry of Power generated at NTPC coal-based stations.

The Solar Energy Corporation of India is implementing 750-MW grid-connected solar PV projects in Batch I of the second phase of NSM with Viability Gap Funding support from the National Clean Energy Fund.

Under Part-I of Tranche-I, Batch II (NSM Phase II), 1,000 MW capacity grid-connected solar PV projects will be selected. These projects are going to be set up in a solar park to be developed at Kurnool district in Andhra Pradesh by a joint venture company of SECI, New and Renewable Energy Development Corporation of Andhra Pradesh Ltd and Andhra Pradesh Power Generation Corporation Ltd. The joint venture company will create necessary infrastructure for speedy implementation of the solar projects. Solar power developers will have to enter into an Implementation Support Agreement with the joint venture company for land and associated infrastructure. The connectivity will be provided by state transmission utility APTRANSCO/Central Transmission Utility Power Grid Corporation of India Ltd with the provision of the STU/CTU pooling substation for the solar park. The SPD will have to enter into connectivity and transmission service agreement with the STU/CTU for power evacuation through STU/CTU system.

Transparent bidding process
In accordance with the mechanism of operation laid down in the guidelines, the selection of grid- connected solar photovoltaic projects of 1,000 MW total capacity will be carried out by NTPC Vidyut Vyapar Nigam Ltd through a transparent, tariff-based bidding process. NVVNL will purchase the power from successful developers at their bid tariff and sell bundled power (1,000 MW solar capacity to be bundled with 500 MW thermal power from the unallocated quota of Ministry of Power generated at NTPC coal-based stations) to distribution companies in Andhra Pradesh after adding trading margin and other incidental expenses.

The guidelines state that selection of projects will be technology agnostic and crystalline silicon or thin film or concentrating photovoltaic, with or without trackers can be installed. The capacity of each project will be 50 MW.

NTPC Vidyut Vyapar Nigam Ltd will invite solar power developers to participate in the bidding process against Request for Selection for development of solar PV power plants on build-own-operate basis. The total capacity to be allocated to a company including its parent, affiliate or ultimate parent or any group company will be limited to 250 MW. Out of the total capacity of 1,000 MW, a capacity of 250 MW will be kept for bidding with Domestic Content Requirement. The company can submit application for a maximum of five projects (three projects in open category and two projects in DCR category) but the aggregate capacity cannot exceed 250 MW.

SPDs who meet the qualification criteria specified in the guidelines will be asked to submit Request for Proposal with separate bids for DCR and open category indicating the applicable tariff in paisa/kWh for 25 years. The applicable tariff indicated cannot be more than the CERC approved applicable tariff. Bidders will be ranked in the ascending order of discovered applicable tariff in paisa/kWh through bidding process. The projects offering the least tariff will be selected first.

The Power Purchase Agreement executed between NVVNL and the SPDs will be for a period of 25 years from Commercial Operation Date with a provision to extend further by 15 years at the rate of Rs. 3/kWh. The projects will have to be commissioned within 13 months from the date of signing of PPA.

Taking into consideration the lack of compliance at state level in enforcement of Renewable Purchase Obligations by entities which has led to a glut in the Renewable Energy Certificate market with accumulation of a number of solar and non-solar RECs, NVVNL will purchase one non-solar REC (or proportionate solar REC so as to match expenditure on non-solar REC) for every 40,000 units of bundled power. These RECs will be taken into account by NVVNL while pricing bundled power.

The NSM, launched in January 2010, had set a goal for deployment of 20,000 MW grid connected solar power capacity by 2022 in three phases (1,000 MW in first phase up to 2012-13, 9,000MW in second phase from 2013 to 2017 and 10,000 MW in third phase from 2017 to 2022).

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