The Indian Ministry of New and Renewable Energy (MNRE) has met to discuss revised plans to tender 10GW of solar capacity on a state-by-state basis over the next year.

According to consultancy firm Bridge to India, these projects will be split between 3GW of tariff-based bidding and 7GW of Viability Gap Funding (VGF)-based bidding.

India’s central government is understood to have approved the 7GW block of VGF projects. MNRE expects to complete allocation of these projects by the end of the current financial year, said Bridge to India.                  

The VGF projects will be tendered on a state-by-state basis. MNRE has so far received confirmation from states for 2,670MW of projects:

  • 500MW each in Karnataka, Uttar Pradesh, Maharashtra, Tamil Nadu
  • 250MW each in Rajasthan, Gujarat
  • 100MW in Kerala,
  • Smaller-scale projects in Uttarakhand, Delhi, Meghalaya and Lakshadweep

Bridge to India said: “If India is able to allocate the entire 10GW in this financial year, it will be path-breaking from a global perspective.”

However the consultancy is of the opinion that the allocations might stretch beyond the timelines stated, due to multiple operational reasons, including land availability and off-taker willingness to procure power.

A large capacity allocation in a short period of time could also involve a lack of bidding interest, which would in turn lower the competitiveness of the bids. Bridge to India was also concerned that a sudden surge in demand for capacity could lead to higher installation costs and a higher VGF/tariff.

Bridge to India consultant Mudit Jain tweeted:

In related news the utility National Thermal Power Corporation (NTPC) issued a tender for 500MW of solar capacity in the state of Andhra Pradesh. These projects will be awarded via tariff-based bidding and solar power will be sold by NTPC to distribution companies on a bundled basis along with thermal power. According to Bridge to India, MNRE officials claimed that tenders for a further 2,500MW of projects under the same scheme will be announced in the next two months.

NTPC and the power utilities Andhra Pradesh Eastern Power Distribution Company Limited (APEPDCL) and Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL) have also signed a power purchase agreement (PPA) for procurement of power to be generated from a 250MW solar power plant.

NTPC plans to install 3,000MW of solar PV capacity during the financial year according to I J Kapoor, NTPC director.

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