India's national solar mission back on track

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India’s ambitious solar plans have received a much needed boost from the government of Prime Minister Narendra Modi following disruptions caused by delays and trade diputes.

The Ministry of New and Renewable Energy (MNRE) last week issued guidelines for the installation of 1.5 GW of solar power plants — the biggest tender to date, according to India’s Business Standard.

In addition, the government has tapped state-owned company NTPC Vidyut Vyapar Nigam (NVVN) – the trading arm of the state-owned electricity giant NTPC — to accelerate the solar rollout and help meet the targets set by the solar mission, Business-Standard.com added.

The news website said NVVN, which assists in meeting the country’s expected rise in energy trading, would package generated solar power with cheaper conventional power and sell at an average rate.

According to the renewable energy ministry’s guidelines, the NVVN will select the grid-connected PV projects of 1.5 GW total capacity through a transparent, tariff-based reverse bidding process. "NVVN will purchase the power from the successful developers at their bid tariff and sell bundled power to distribution companies/utilities/other bulk consumers," the guidelines say.

The MNRE said the 1,500 MW of grid-connected solar projects would be developed under the bundling scheme, which would provide for deployment of only PV projects. However, it added that the selection of projects would be "technology agnostic" and that "crystalline silicon or thin film or CPV, with or without trackers," could be installed.

The bundling scheme will be carried out in a phased manner. According to the MNRE guidelines, the first tranche of PV project selection will include 750 MW of capacity between 2014 and 2015, followed by the remaining 750 MW selected in the second tranche between 2015 and 2016.

NVVN oversaw country’s solar tender in 2010, which led to solar power rates dropping from INR 17 ($0.28) a unit to INR 10-12 a unit. The price has continued to drop to its current range between INR 6.5 and INR 7 a unit – a decline of 60% in three years, according to the Business Standard.

Tarun Kapoor, the MNRE’s joint secretary, said the government was hopeful that the rate would come down further to at least INR 5 a unit during the latest bidding, quoted by the Business Standard. Kapoor added that there were now "serious players in the sector" who were expected to bid "aggressively."

India’s government is aiming to achieve grid parity by 2017, earlier than the original target of 2022.

The new tender process is expected to begin by the end of August.

The mission has set a goal of 20 GW of grid-connected solar power capacity by 2022 in three phases (1000 MW in the first phase up to 2012-13; 9000 MW in the second phase from 2013 to 2017; and 10,000 MW in the third phase from 2017 to 2022).