India uses coal tax to help fund 21GW of new solar development

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

The Indian government has today announced the approval of 21GW in new solar development with over US$800 million in government funding made available.

The new solar projects will predominantly use Viability Gap Funding (VGF).

VGF is available due to India’s ‘polluter pays’ system. Coal companies pay INR50 (US$0.80) per tonne of domestically produced, and imported coal.

These polluter fees are channelled onto the National Clean Energy Fund, operated by the Ministry of Finance, and awarded to the Ministry of New and Renewable Energy (MNRE).

The national government is providing INR5050 crore (US$809 million) in total, for two solar development schemes, one for at least 20GW of ‘ultra mega’ solar power parks, and another for 1GW of on-grid solar.

The national cabinet approved 25 solar power parks, 500MW and up in size, or ‘ultra mega’ solar power parks, across India, where land is available, including some smaller parks in challenging terrain, such as Himalayan territory.

State government is to oversee development of the ultra mega solar parks, with construction from 2014 to 2019, and INR4050 crore (US$649 million) in government funding to be made available.  

The second scheme approved is part of the National Solar Mission’s second phase and aims for 1GW of on-grid solar to be developed by central and state schemes.

The 1GW on-grid will be funded by VGF of INR1000 crore (US$160 million).

Announced by the Cabinet Committee on Economic Affairs (CCEA), the 1GW of on-grid solar is to begin development nationwide in three year segments, to start in between 2015 and 2018.

The 1GW developments are also to be 100% local content – cells and modules must all be made in India. In August, energy minister, Piyush Goyal told Indian manufacturers to run at full capacity and expand.

Central Power Supply Unit (CPSU) and government agencies will be able to participate in the 1GW scheme, with inexpensive land used in rural areas for solar parks, and tenders awarded from central and state governments.

To allow the 1GW to be on-grid, transmission lines for the 1GW will be developed, allowing solar developers to save on the cost of also building transmission lines. This will also protect landscapes with limited transmission line development and will enable more developments quicker, as fewer clearances will be required.

State government will be responsible for picking suitable land to develop the 1GW of solar parks, and for choosing developers and sending proposals to MNRE for approval.

Both the 20GW ultra mega scheme, and the National Solar mission 1GW on-grid scheme, will see developers VGF amounts of up to INR25 lakh (US$40,000) for carrying out reports and surveys on possible solar developments. Reports are then to be sent to the national government solar body, the Solar Energy Corporation of India (SECI), for a further INR20 lakhs (US$32,000), or, if lower, 30% of the project costs.

Grants will be made by SECI at various milestones of solar project development  with a 60 day time limit for reports to be carried out.  

Already thermal power plant companies, utilities and power distribution companies as well as entities such as Indian Railways are applying for solar power development grants.

Another INR500 crore (US$80 million) was also set out in India’s national budget for the 20GW scheme, with renewable energy said to be highly prioritised by the new Finance Minister, Shri Arun.

Before the elections, the national budget saw MNRE’s allowance slashed by prior Finance Minister, Shri Chidambaram.

The two schemes are in line with reports of India raising its solar ambitions to 100GW by 2022, and reports of solar parks being mapped out last month to meet solar advocate Prime Minister, Narendra Modi’s election ambitions.

26 January 2022
Join this free webinar for our analysis of the growth of N-Type technology including; new capacity expansions and production output. We'll also be looking at the global manufacturing footprint with forecasts on how much product will be made outside of China this year and which companies are driving technology change across the crystalline silicon value chain.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.
8 March 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 March 2022
When it comes to storage, the US market exceeded a gigawatt of advanced energy storage installations (weighted towards lithium ion) at 1.46 GW, more than the previous six years in total! An exponential growth rate could see the market hit 7.5 GW p.a. by 2025. The summit will provide a wealth of content around this vital piece in the US power puzzle, with sessions dedicated to explore how companies are making money from batteries, the latest chemistries and their applications as they apply to different use-cases. We ask how investors can match ESG criteria to batteries and we will bring case studies of successful deployment and project execution onto the stage to examine how you can ensure your own projects are successful.
29 March 2022
Now in its 10th sell-out year, Large Scale Solar returns to Lisbon in 2022. We are excited to gather together face-to-face with the European solar industry as we provide unique and exclusive access to a powerful selection of the market's key stakeholders. Join this elite summit to find out how the market is maturing, which new markets are becoming more exciting, how technology is evolving and who's driving the market forward into the 2020s. Always senior, packed with developers, EPCs, utilities and investors this is the event for companies serious about European solar PV.

Read Next

January 25, 2022
The Czech Republic’s largest utility, ČEZ Group, should scale up its domestic solar PV portfolio over the next decade instead of pursuing new nuclear power plants, the Institute for Energy Economics and Financial Analysis (IEEFA) has said.
January 25, 2022
SK Ecoplant, part of the South Korean conglomerate SK Group, has signed a US$200 million joint venture (JV) agreement with Vietnamese rooftop specialists Nami Solar for the development of 250MW of rooftop solar in Vietnam over the next four years.
PV Tech Premium
January 25, 2022
European solar power purchase agreement (PPA) prices can be expected to level off this year following a turbulent end to 2021 as the market undergoes a shift in the balance of power to the seller side.
January 25, 2022
Indian PV encapsulant and backsheet manufacturer RenewSys has brought its encapsulant production capacity up to 3GW with the commissioning of a new line in Bengaluru, India, with the company eventually targeting 11GW of capacity through a “phased manner”.
January 25, 2022
A consortium including Saudi solar developer ACWA Power has inaugurated the 500MW Ibri 2 solar project in Oman, which becomes the country’s largest utility-scale solar project to date.  
January 25, 2022
PV CellTech 2022 is to be held in Berlin, Germany, the first time the industry-leading event will be located in Europe. Finlay Colville previews the event and provides attendance details.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
January 26, 2022
Free Webinar
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal