Uncertainty looms over JNNSM Phase II bids

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The Indian government is considering postponing bids for the second phase of the Jawaharlal Nehru National Solar Mission (JNNSM) to the end of April or beginning of May.

In a bid to boost its domestic manufacturing the government will use the next two months to decide whether to include thin-film in its domestic content requirement (DCR), according to local media reports.

Currently, the DCR only applies to crystalline silicon based modules with thin film being exempt. However, this has resulted in companies importing thin-film technologies to the detriment of its domestic module manufacturers.

Hari Manoharan from Indian consulting firm RESolve said the government’s motivation behind this delay is to abate imports from the US. “One of the (if not the) largest thin film supplier to India is First Solar which is a US based manufacturer. Bringing in thin film DCR would significantly dampen imports from USA and with the World Trade Organization complaint looming, this could be one of the reasons for the delay,” said Manoharan.

The Indian Solar Manufacturers’ Association last year filed a complaint with its government alleging that module suppliers from the US, China, Malaysia and Taiwan are selling below cost, or “dumping”, on the Indian market.

As a result, the US filed a complaint with the World Trade Organization claiming India’s national solar programme discriminated against US solar manufacturers.

“The other reason for the delay might be due to funding,” added Manoharan.

“The previous batch of projects used a scheme known as 'bundling' where the more expensive solar power was bundled with cheaper fossil fuel supply thus reducing the financial burden on NVVN [Vidyut Vyapar Nigam, the agency which implements the JNNSM].”

Bundling allowed energy to be sold to utilities at a cheaper rate than offered by solar power alone.

“This is no longer possible as they do not have any unallocated capacity that can be used for this bundling. With this in mind, something called viability gap funding (VGF) was proposed with the offtaker being the newly established Solar Energy Corporation. However, I think funding for such an undertaking has not been announced yet (there was no mention in the budget announcement either), which could also be another reason for the delay,” concluded Manoharan.

“The tenders inviting bids for 750 MW of solar photovoltaic projects will happen by April end or May first week,” Tarun Kapoor, Joint Secretary at the Ministry of New and Renewable Energy was quoted saying by Indian news portal the Hindu Business Line.

The JNNSM programme is the Ministry of New and Renewable Energy’s three-phase approach to encourage the adoption of solar power in India. The first phase was due to end this year having launched last year. The second phase is to last until 2017 and the finale will be in 2022 with the aim of having reached its goal of 20GW.

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