India reveals rules for 1,500MW next phase of solar mission

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India’s Ministry of New and Renewable Energy (MNRE) has published guidelines for developers bidding in the next part of its national solar programme.

A total of 1,500MW of grid-connected solar is available under the second batch of the second round of the JNNSM solar mission.

Projects must be 10-50MW in size and will be given 13 months to be commissioned from the date of signing power purchase agreements.

The allotment of 1,500MW is to be commissioned in segments – the first 750MW in 2014, the second 750MW in 2015-2016, with a six month gap between auctions.

As was the case with the first phase of JNNSM, the 1,500MW will be ‘bundled’ with thermal power to meet the price quota for conventional energy.

Currently the average price for energy is around INR4-5 (US$0.07-0.08) per unit, while solar units are between INR6-7 and thermal (coal) power as low as INR3 per unit.  

The ‘bundles’ of thermal units and solar are then sold at the normal rate of power to energy companies.

In the first batch of the JNNSM second round, solar was sold at INR5.45 per unit and viability gap funding (VGF) was used to settle the difference.  

As part of the national solar mission’s objective to advance domestic manufacturing, 500MW of the second batch will be reserved under a domestic content requirement (DCR). All solar cells and modules must be made in India, with 250MW under DCR in 2014 and 250MW in 2015.

However, Jasmeet Khurana, consultant at analyst firm, Bridge to India, told PV Tech that government officials had privately indicated that if an anti-dumping duty is introduced, then the 500MW DCR will be removed from the batch.

In May, India published proposals for anti-dumping duties on US, Chinese and Malaysian solar manufacturers, for up to US$0.81 per watt. A final decision on the proposed duties is expected this August.

Local developer, Welspun, US manufacturer, First Solar and local manufacturer Tata Power, as well as Bridge to India have argued for and against the dumping duties, raising concerns over the abilities of local cell and modules manufacturers, as well as world trading standards and conflicts with the new prime minister Narendra Modi’s solar goals.

If no anti-dumping duties are imposed, the 250MW yearly DCR “will be possible” for local manufacturers to meet this demand in time, said Khurana. He said the government has “got the balance right this time” for encouraging domestic manufacturing without decreasing international opportunity and interest.

Batch II will be technology agnostic, accepting bids from crystalline silicon, thin film or concentrated photovoltaic (CPV) projects.

The JNNSM is aiming for 20GW by 2022 in three phases; the current second phase, of which the 1,500MW batch is part, is aiming for 9GW of solar to be commissioned between 2013 and 2017.

Khurana said VGF funding would not be used this time; developers will only receive a pre-agreed tariff for energy generated, which starts with a benchmark price of INR6.99.

Developers are to bid at a discount from the benchmark price, and the highest discount will win the project, with no further capital for construction or development to be awarded.

This time around, developers will have to bid according to the viable price for generating energy, rather than a discount tariff with additional capital from VGF funding.

Khurana said the estimated tariff for solar energy to remain viable without VGF, would be between INR 5.8 to INR6.8 per unit.

Tarun Kapoor, joint secretary of MNRE told the Economic Times newspaper that bidding for the first 750MW segment would begin in July-August.

The quote of “Khurana said the estimated tariff for solar energy to remain viable without VGF, would be between INR 5.8 to INR6.8 per unit.” has been corrected from the previous INR6.5 per unit.

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