HPPC asks SECI to allot solar capacity at fixed rate to fulfill its RPO target

HPPC petitioned to seek in-principle approval of the commission to purchase 250 MW of solar power from SECI under 2000 MW ISTS scheme. HPPC wished to purchase 250 MW of power from SECI at INR 2.93/kWh (excluding trading margin)  fixed rate for 25 years in order to meet the state’s solar RPO targets. The commission approved the petition and asked HPPC to deposit a filing fee of INR 2 Lakh. SECI has agreed to allot 100 MW solar project capacity to HPPC at 2.54/kWh (excluding the trading margin of INR 0.07 kWh) against the requisite of 250 MW.

The solar Power Purchase Obligation target till FY 2022 is as below:

Financial Year

Solar RPO (as a percentage of total consumption)
2013-14 0.10
2014-15 0.25
20 15-16 0.75
2016-17 1.00
20 17-18 1.25
20 18-19 1.50
20 19-20 2.00
2020-21 2.50
2021-22 3.00

The existing solar power capacity available with Haryana Discoms is 125.8 MW. As per the current contracted capacity, the potential energy consumption for FY 2018-19 is supposed to be 41906 MUs and similarly, the availability of solar power projects in the coming years along with the shortfall situation is as below:

Read the order here.

India to introduce a cap on solar tariff and reduces tender size for manufacturing unit

In a major development, the MNRE has directed the Solar Energy Corporation of India(SECI) to fix the upper permissible solar tariff at INR 2.50/kWh and INR 2.68/kWh for developers using domestic cells & modules (without safeguard duties) and imported products (with safeguard duties), respectively. SECI has reduced its solar manufacturing tender size from 5 GW to 3 GW and curtailed minimum bid capacity from 1 GW to 600 MW. However, the size of the PPA remains the same at 10 GW. This comes to post an announcement by the Power  Minister – that all the future renewable energy projects bid would have to cover at least a 50% of a project’s components with domestic manufacturing. Regarding the PPA, it must be executed within a maximum time frame of 90 days from the date of award and a minimum of 40% of commissioned within 21 months from the date of PPA signing. The remaining 60% of the capacity will have to be commissioned within 36 months from the date of the bid award letter. SECI has also revised the time allowed to set up manufacturing capacity to two years from the earlier three-year time period.

  • For silicon-based facilities, the module manufacturing unit has to be set up in India whereas polysilicon can be imported.
  • For non-silicon-based technologies, the primary functional raw material can be imported.

To support this development SECI has announced a 5 MW solar manufacturing tender linked to a 10 GW PPA, also in June. It was the first solar tender where developers were required to locally produce equipment in order to win projects.

MNRE proposes a draft schedule for solar tender activities to avoid clashes between agencies

The Ministry of New and Renewable Energy (MNRE) has approached all the central & state governments as well as public sectors implementing agencies for tendering of solar PV capacities to follow a timeline for implementing renewable energy projects. According to the letter “It has been seen that sometimes bids of two organizations clash with each other, thus distorting the market.” It is being assumed that by following a timetable for bidding, these organizations can evenly distribute their tender and auction activity throughout the year.

According to the timetable, SECI will have the months of Dec, Mar, Jun & Sept for its tender and auction activity. NTPC and other public sector units will utilize Jan, Apr, Jul, and Oct for tender & auction activity. Further, the state implementing agencies will use Feb, May, Aug, and Nov for the activities.

MNRE has requested implementing agencies to follow this timetable in light of the tender trajectory that was announced earlier. As per the trajectory, 30 GW of solar will be tendered and auctioned in the current and the next Financial years. The timeline is to be followed by the large-scale projects tenders only and not the rooftop solar tenders.

The manufacturers are in acceptance of the proposed plan and believe, that now they will be able to plan their activities in an efficient manner. However, people in the industry are skeptical if the state will follow this timetable, since MNRE is an organization providing guidelines and it is up to the state to decide whether to follow it or not.

SECI favours lowest bid in recent solar auctions, cancels rest

The nodal agency for National Solar Mission, Solar Energy Corporation of India (SECI) has canceled mostly all but the lowest bid project in its mega solar auctions held in July. The decision to cancel 2400 MW solar capacity out of 3000 MW came to light at a meeting of developers with government officials and SECI on August 1st, 2018. Out of all the tenders, only ACME solar won 600 MW for quoting INR 2.44/unit. The government felt all the other bids were too expensive and not competitive enough.

Among the canceled projects were 1100 MW by SB energy (a Joint Venture between Japan’s Softbank, Taiwan’s Foxconn & Bharti Airtel), 500 MW by Renew Power, both of which quoted INR 2.71/unit and lastly 300 MW each by Mahindra solar and Mahoba solar (Adani group) who quoted INR 2.64/unit. The developers felt that if they quoted below INR 2.71/unit, it would be not feasible for them to sustain.

Recently an auction in Uttar Pradesh was also canceled for 1,000 MW without stating any reasons.

Post the Safeguard duty implementations, Ministry of New and Renewable Energy (MNRE) has also requested the Finance Ministry to exempt the ongoing solar power projects from the 25% safeguard duty imposed on imported solar equipment. The developers showed their concern over the increase in capital of the projects. While the duty seeks to protect the domestic solar manufacturing industry, project developers have mentioned that the duty would increase solar power tariffs.

Looking at the trend of the competitive tariff over the past years, tariff prices have dropped drastically, and the developers have gone weary of the ongoing trend and believe that they won’t be able to sustain the long-term agreement. However, the government is of the opinion that the tariff is too high and not competitive enough yet.

WIND TARIFF HITS A NEW LOW

In the second auction conducted by SECI for 1 GW wind capacity on 4th October, the wind tariff reached an all time low of Rs 2.64 per unit. This tariff was quoted by ReNew Power for 250 MW capacity. This is the lowest wind energy tariff determined in the country after the wind auction conducted by TANGEDCO where a price of Rs 3.42 was determined. The following graph determines the decrease in wind tariffs determined through reverse bidding in 2017:


Article covering the same can be accessed here.

 

 

Solar Power Tariff hits new low

The solar power tariffs has hit a new low.  In a Solar Energy Corporation of India’s auction of rooftop solar power projects, Gurgaon-based Amplus Energy Solutions quoted a tariff of Rs. 3 /unit defeating the previous low of Rs 4 /unit for a solar park in Rajasthan by a quarter. The rooftop projects will be installed on buildings of NGOs, educational institutes, hospitals, trusts and notfor-profit companies in these states.

The lowest tariff quote for these projects is same as average tariff offered by state-run generation utility NTPC for power from its coal-fired plants and nearly half of tariffs charged by some private power producers.

Till now, a solar project at Badhla in Rajasthan held the record for the lowest tariff at Rs 4 per unit in the solar park category. The lowest tariff before that was Rs 4.34 per unit, quoted by Fortum India in January .

MNRE scheme for Development of Solar Zones in the country commencing from 2016-17 and onwards

MNRE has recently sanctioned the scheme for setting up of 10 solar zones. Each solar zone will be having around 10,000 hectares of government owned or privately owned wasteland, uncultivable land or fallow land in one or more than one patches. An estimated amount of Rs. 4400 crore has been granted as a Central Financial Assistance for this project.

Following are some of the highlights of the scheme:

  • The objective of the scheme is to promoted developers and investors and thereby helping the country in achieving the target of 100000MW by 2022.
  • This scheme will in return help the states in meeting its mandate RPO, and also provide employment opportunities to the location.
  • All the states and Union Territories will be eligible for benefiting under this scheme.
  • The solar zones will be developed in collaboration with the State Government and their agencies. SECI will act as MNRE’s agency for handling the scheme.
  • The state government shall identify an area having daily average insulation of over 4kWh per meter square and having around 10000 hectares of government owned or privately owned wasteland.
  • The solar zones will be set up in a span of 5 years commencing from 2015-16 and the solar projects may come in as per demand and interest shown by the developers.
  • Out of the total solar potential in the solar zone, 25% area will be set apart for deployment of manufactures of ingots, water, solar cell and modules to promote make in India.
  • 25% area for small and medium enterprises, farmers and unemployed youth and 50% for solar project developers.

The scheme can be accessed here.

  • Posted on July 29th, 2016
  • Posted by Team REConnect
  • Comments Off on MNRE scheme for Development of Solar Zones in the country commencing from 2016-17 and onwards
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MNRE Scheme for setting up of 1000 MW CTU-connected Wind Power Projects

The Ministry of New and Renewable Energy recently sanctioned the scheme for setting up of 1000MW CTU- connected Wind Power Projects by Wind Project Developers on build, own and operate basis. However, the capacity may go higher than 1000 MW, if there is higher demand from Discoms of non-windy States.

The Government of India has set an ambitious target of target of achieving 175 GW power capacity from renewable energy resources by 2022 and out of this 60 GW to come from wind power.

In order to facilitate transmission of wind power from these windy States to non-windy States provisions have been made in the Tariff Policy to waive the inter-state transmission charges and losses for wind power projects.

Some of the important highlights are:

  • The selection of wind power projects under the Scheme will be through a transparent e-bidding process followed by e-reverse auction for eligible bidders for procurement of wind power at tariff discovered through open competitive bidding process. SECI will develop guidelines for e-bidding process.
  • MNRE will play an important role by issuing Guidelines for transparent bidding process for implementation of the Scheme.
  • SECI will develop a suitable mechanism for monitoring the performance of the projects and will act as the nodal agency for implementation of this Scheme.
  • The objective of the scheme includes:
    • To facilitate supply of wind power to the non-windy states at a price discovered through transparent bidding process;
    • To encourage competitiveness through scaling up of project sizes and introduction of efficient and transparent e-bidding and e-auctioning processes
    • To facilitate fulfillment of Non Solar Renewable Purchase Obligation (RPO) requirement of non-windy states.

The full article can be accessed here.

Orissa to Set up 1000MW Solar Power Park

The Orissa government plans to add aggregate clean energy capacity of 1,000 MW by establishing solar parks in the state by 2020. The target, fixed by the state government in its draft Orissa Solar Park Policy, 2014, primarily aims at facilitating accelerated deployment of solar energy in the state to support sustainable development and address the climate change issues.

The state government had set an ambitious target of adding 3,000 Mw of renewable energy capacity by 2022 in the draft policy. The park has been approved by Ministry of New and Renewable Energy which will likely involve investment of about Rs 6,500 crores.

A total of 5000 acres of land would be required for setting up of the solar park. Since it’s difficult to find this stretch of land in Orissa, the park would be developed in three to four Green Energy Development Corporation of Orissa Ltd (Gedcol) will be signing a pact with Solar Energy Corporation of India clusters, where Gedcol will act as the nodal agency.

The above update has been taken from Business Standard’s article published on 17th October, 2015 which can be accessed here.

MNRE Releases Draft Guidelines for 3000 MW Solar Under JNNSM

Ministry of New and Renewable Energy (MNRE) has recently released the draft guidelines for selection of 3000 MW grid connected Solar PV Power Projects under Phase-II, Batch-II & tranche-I of JNNSM.

Under Part-I of Tranche-I, 1000 MW Solar PV Projects would come up in the Solar Park to be developed by the Joint Venture company of SECI, NEDCAP & APGENCO at Kurnool district in Andhra Pradesh.

The key points proposed in the draft are as below:

  1. The Scheme will be implemented by NVVN.
  2. The selection of Grid Connected Solar PV Projects of 1000 MW will be carried out by NVVN through a transparent tariff based bidding process.
  3. The generated power from developer will be purchased by NVVN and sold to AP distribution companies.
  4. To connect the projects to the transmission utility substations at 132kV and above, the Project capacity should be 50 MW.
  5. The maximum capacity to be allocated to a company or its group companies should be limited to a total of 250 MW.
  6. Out of total 1000 MW Under this scheme a capacity of 250 MW will come under Domestic Content Requirement (DCR).
  7. Keeping the slow-moving REC market in mind, it has been proposed that the NVVN will purchase 1 (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 purchased. The power sold to DISCOMs will cost them an extra Rs. 0.05/Unit, which is quite insignificant.
  8. The 1000 MW purchased by NVVN, will be bundled with 500 MW thermal power from NTPC.

 Time Schedule for Solar PV Projects:  Selection of Solar PV Projects shall be carried out according to the timeline given below:

The total bundled power of 1500 MW purchased, will result in injection of approximately 2250-2300 million units. As a result, NVVN will buy 56000-57500 REC per annum, which is insignificant compared to current inventory of 10.5 million RECs.

The relevant order can be accessed here.

Our previous Blog on MNRE JNNSM Phase-2 Batch-2 Scheme can be read here.

Contributed by Dheeraj Babariya.

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