Cabinet approves NTPC’s proposal for 15000 MW grid-connected solar power project

The union cabinet today gave its approval for the implementation of the scheme for setting up of 15,000 MW grid-connected solar photo voltaic (PV) power projects under the National Solar Mission through NTPC/ NTPC Vidyut Vyapar Nigam Limited (NVVN).

The project will be implemented in three tranches - 3,000 MW under Tranche-l under mechanism of bundling with unallocated coal-based thermal power and fixed levellised tariffs, 5,000 MW under Tranche-ll with some support from government, to be decided after getting some experience while implementing Tranche-l, and the balance 7,000 MW under Tranche-III without any financial support from the government.

Successful completion of additional 15,000 MW capacity of grid-connected solar PV power generation projects, mainly in the private sector, with largely private investment, under the National Solar Mission would accelerate the process of achieving grid tariff parity for solar power and also help reduce consumption of kerosene and diesel, which is presently in use to meet the unmet demand, a government release stated.

For Tranche-l, which will be Phase-II of the National Solar Mission, 3,000 MW capacity of solar PV power plants will be based on bundling of solar power with unallocated thermal power capacity of 1,500 MW in the ratio of 2:1, for which the ministry of power has allocated the required 1,500 MW of thermal power.

The bundled power will be allotted to various states that come forward to: provide land for setting up the solar power projects and purchase a major portion of the bundled solar power for consumption within the state and ensure connectivity to the solar power project.

States, in turn will set up the capacity allotted them through developers, to be selected through international competitive bidding by NTPC /NVVN. Both private and government companies would be free to bid for projects.

Out of the 3,000 MW under the bundling scheme 1,000 MW capacity will be set up on land already identified in Andhra Pradesh. The balance 2,000 MW capacity under the bundling scheme will be allotted to other interested states that come forward.

It is estimated that implementation of Tranche-l of the scheme will entail total investment of over Rs18,000 crore, all of which will be met by project developers, mainly private.

It is proposed to set up a payment security mechanism / working capital fund with an estimated corpus of Rs2,300 crore to cover 3 months payment for bundled capacity of 3,000 MW of solar capacity while 1,500 MW NTPC coal power will be set up to ensure bankability of PPAs and timely payment to developers. This will be evolved through collaborative efforts of Government of India and solar project developers.

The modalities for setting up of the payment security mechanism / working capital fund will be finalised subsequently. Accruals from encashment of bank guarantees, penalties on developers, etc will also go into this fund.

Some capacity will be earmarked out of the total procurement under this scheme with provisions of domestically manufactured solar cells as well as modules. Further, this DCR will be technology neutral, for application on both the crystalline silicon and thin film SPV cells and modules.