India updates draft guidelines for 3 GW solar auction

India’s Ministry of New and Renewable Energy (MNRE) has issued updated draft guidelines explaining how the bidding process for the next tranche of the Jawaharlal Nehru National Solar Mission (JNNSM) auction will unfold.

Phase II, Batch II, Tranche I of the JNNSM project amounts to a 3 GW solar power auction, expected to get underway in the first quarter of this year. The MNRE has revealed that the minimum capacity size for projects awarded under this tranche is 10 MW, rising in multiples of 10 and no greater than 300 MW in size.

The key announcement under Tranche I will be the "bundling" of power generated via solar PV projects with that developed under coal-based thermal energy projects. This approach gives a two-to-one rating in favor of solar PV when priced on the markets – a move that the MNRE hopes will persuade power distribution companies to purchase renewable energy rather than other forms of power. NTPC Vidyut Vyapar Nigam Limited (NVVN) will first purchase the solar power generated from the selected sites, at the agreed tariff rate, before selling it on to the utilities.

The bidding process will also be handled by NVVN, which will divide the bid lot into different-sized projects in order to match plot sizes available in each region. Capacity allocation across the country will be based on where prospective developers are located, with state-specific allocations enforced. Developers are invited to submit e-bids, with the lowest-quoted levelized tariff in each region set to be awarded the contract.

The auctions are expected to attract a record number of solar developers as India continues to make waves on the global solar scene. U.S. solar manufacturers First Solar and SunEdison recently participated in their first successful solar auction, with the latter securing a deal to develop 5 GW of solar PV capacity in the state of Rajasthan.

The MNRE also confirmed that a large proportion of the 3 GW of capacity set to be deployed under this latest round of the JNNSM would have to come from domestically manufactured sources, but did not explicitly state how much. Under domestic content requirements (DCR), however, requisite P-type or N-type wafers and other raw materials used in the manufacture of C-Si modules can be imported, but manufacturing must take place in India.

For thin-film technologies under DCR, the entire assembly process must occur within India, with only starting substrate without any semiconductor junction (solar glass) allowed to be imported. These rules apply only to projects awarded under the DCR category.