India: Guidelines for selection of 750 MW grid-connected PV projects22. April 2013 | Applications & Installations, Industry & Suppliers, Markets & Trends | By: Shamsiah Ali-Oettinger
The Ministry of New and Renewable Energy (MNRE) has released the draft guidelines for the second phase of batch 1 under the Jawaharlal Nehru National Solar Mission (JNNSM) to set up 750 MW of grid solar PV power projects. Comments and suggestions have been requested by the end of April to facilitate the finalization of the guideline.
The guideline states that the capacity of each project has to be at least 10 MW and the maximum capacity has been set at 50 MW. The plant capacity also has to remain in multiples of 10 MW.
The Solar Energy Corporation of India or SECI will be handling the power procurement for the second batch of JNNSM. It was reported this February that over the last three years, the MNRE has assigned 1,172 GW of grid-connected solar power, of which 369 MW have been commissioned.
Under the mechanism of Viability Gap Funding (VGF), a fixed tariff of INR5.45 (US$0.10) per kWh will be paid to developers over a 25-year period. In the event an accelerated depreciation is available for a project, the tariff will be reduced 10% to INR4.95 ($0.09) per kWh. The upper limit of the VGF is 30% of the project cost or INR2.5 crore (about $461,425) per MW, whichever is lower.
The VGF model being adopted now is different from the first phase of JNNSM that employed a reverse auction model to select solar projects.
The guideline also states that some capacity will be kept for bidding with Domestic Content Ruling (DCR), which calls for cells and modules used to be made in India. The capacity has not been stated in the guideline.
RESolve Energy Consultants' Hari Manoharan adds that the announcement should provide some insight into the VGF process for project developers. He further writes in the report that the interesting fact is that the DCR is not going to be enforced in full force.
Manoharan adds that DCR does not state that it is applicable to crystalline silicon technology exclusively, and only suggests that technology selection, be it thin film or crystalline silicon, would be covered by the ruling.
The draft calls for suggestions and comments before the end of April so that the guideline can be finalized.
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