Its All About Power Sector

Can JNNSM-Phase I Achievements Fuel Phase-II?

In 2008 solar energy was recognized as a key element of the national strategy to meet the twin goals of climate change and energy supply needs of the country. The launch of the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010 as one of the eight Missions under the NAPCC, signified the importance of this source of energy for the country. This importance was further underlined by providing for separate Renewable Power Obligations (RPO's) targets for solar power in the trajectory leading up to 2020. In 2010 itself, the Government of India committed itself to targets for harnessing solar energy in different forms for the next decade, i.e., leading up to the end of the XIII Five Year Plan (2022).

The FIVE POINT MISSION targets include

(Also Read what is instore for JNNSM-PhaseII)

For the first phase of the Mission, the Cabinet had approved a target to set up 1,100 MW grid connected solar plants including 100 MW capacity plants as rooftop and other small solar power plants till March 2013. In addition, a target of 200 MW capacity equivalent off-grid solar applications and 7 million square meter solar thermal collector area were also approved. The Cabinet had also approved setting up of large utility scale grid power plants through bundling of solar power with the unallocated thermal power available from NTPC stations and the policy to provide generation based incentive for small grid connected solar power plants.

Grid Connected Solar Power

The Phase I of the Mission comprises of two sub-components, (i) 1,000 MW of large grid solar plants connected to 33 KV and above grid line, and (ii) 100 MW of rooftop and small solar plants, connected to grids below 33 KV.

1,000 MW capacity Grid Solar Power Plants

In order to facilitate grid connected solar power generation under the first phase, without any direct funding by the Government, Cabinet had approved NTPC Vidyut Vyapar Nigam (NVVN) as the nodal agency to purchase 1000 MW of solar power from the project developers, bundle it with the unallocated power available from the NTPC coal-based stations and sell this bundled power to the Distribution Utilities. It was decided to select projects of 500 MW capacity each based on solar thermal and solar photovoltaic (PV) technologies. Considering the relatively longer gestation period of Solar Thermal Projects i.e. over two years, the selection of projects for 500 MW was completed in FY 2010-11. The size of solar thermal projects was in the range of 20 MW to 100 MW per project developer.

The selection of PV grid power projects of 500 MW capacity was decided to be done in two batches over two financial years of Phase 1 i.e., 2010-2011 and 2011-2012. The size of PV projects in the first stage in 2010-11 was fixed at 5 MW per project.

In February 2010, the guidelines for migration were approved. A total of 16 projects of 84 MW capacity (54 MW for PV and 30 MW for solar thermal) were selected. The last date for commissioning of 54 MW capacity PV projects was by end of October, 2011 out of which PV Projects of 48 MW capacity have been connected to grid. The 30 MW capacity solar thermal projects were to be commissioned by March, 2013. 2.5 MW capacity of solar thermal power has been connected to grid.

The selection of new grid solar power projects comprising of 150 MW of Solar PV and 470 MW of solar thermal capacities was started by NVVN in August 2010. The projects were selected based on tariff discounting. Bidders offered substantial discounts as given below:

Overview of outcomes of the bidding process for selection of solar Power projects under JNNSM

Solar PV		Solar Thermal
CERC Approved tariff for Solar PV (Normal Depreciation)		CERC Approved tariff for Solar Thermal (Normal Depreciation)
17.91 INR / Kwh		15.31 INR / Kwh
Max discount offered (INR)	Min. discount offered (INR)	Max discount offered (INR)	Min. discount offered (INR)
6.96	5.15	4.82	3.07
Final tariff after discount for Solar PV (INR / Kwh)		Final tariff after discount for Solar Thermal (INR / Kwh)
10.95	12.76	10.49	12.24

In all, a total of 704 MW capacity grid connected solar power projects were selected, which comprised of 500 MW capacity of solar thermal power projects and 204 MW of PV power projects. The Ministry also announced Payment Security mechanism to provide comfort to bankers for payment by NVVN to solar project developers in the event of defaults by the purchasing State Utilities. As approved by the Cabinet, a provision of INR 484 Crore has been kept in the Solar Payment Security Account.

Out of 150 MW of solar PV grid connected projects, 130 MW have been commissioned ( 2 projects of 5 MW each could not achieve financial closure and 2 projects, 5 MW each terminated as not commissioned as per schedule). Regarding 470 MW of solar thermal projects, the commissioning was scheduled by May, 2013. However, a time extension of 10 months has been granted.

Guidelines of Batch-ll of Phase-I of JNNSM for balance 350 MW Solar PV capacity was issued on August 24, 2011. Notice for request for submission was issued by NVVN on August 24, 2011 and response for 154 bidders for 218 Solar PV Projects for 2515 MW was received. The discount offered for Solar PV Projects were as under:

Solar PV

CERC Approved tariff for Solar PV (Normal Depreciation)
15.39 INR/Kwh
Max discount offered (INR)	Min. discount offered (INR)
7.90	5.95
Final tariff after discount for Solar PV (INR / Kwh)
7.49	9.44

Letter of Intent was issued to 22 selected bidders for 28 Solar Power Projects. 27 projects totalling 340 MW achieved financial arrangement and the commissioning schedule of these projects was by February, 2013. Out of the above 24 projects totaling 290 MW grid connected solar PV projects have been declared commissioned by March, 2013.

100 MW capacity Solar Power Plants
MNRE announced the Guidelines for Rooftop and other Small Solar Power Plants connected to distribution network (Below 33 kV) in June 2010. This component of the Mission was designed essentially as a State driven scheme to encourage the states to declare their solar policy for grid connected projects focusing on distribution network and to strengthen the tail end of the grid. Under this scheme, the state utilities purchase power from any of the generation companies based on the tariff fixed/approved by the respective State Electricity Regulatory Commissions (SERCs) Another purpose of the scheme was to encourage as many states as possible to set up small solar grid connected projects. This would also help to create a database of performance of solar plants under different climatic and grid conditions. This was considered necessary for large-scale replication in future, particularly for meeting rural needs in the next phase of the Solar Mission.

Under these guidelines, a cap of a maximum 20 MW capacity projects per State was put. The project size was limited to a maximum of 2 MW capacity to be connected to distribution grid. The role of the Ministry was limited to providing a fixed Generation Based Incentive (GBI) to the State utilities at a rate equal to the difference of the CERC tariff for 2010-11 (INR 17.91 per kWh) and a reference rate of INR 5.5 per kWh. The projects were registered with IREDA through a web, based process, and 78 projects were selected to set up 98 MW capacity projects from 12 States. 69 projects of total capacity 88.80 MW have connected to grid. 

Off-grid Solar Applications including Solar Heating

The guidelines for implementation of off-grid solar applications were also announced on June 16, 2010. A provision of 30% capital subsidy and/or soft ban at 5% was made for general category states. In case of solar photovoltaic applications, a capital subsidy limited to a maximum of 90% of the benchmark cost is available for Government driven projects in the special category states viz. NE, Sikkim, J&K, Himachal Pradesh and Uttarakhand and also the international border districts and islands, keeping in view special needs of the region and overall policy of the Government, IREDA was assigned the task to provide refinance to the interested banks to enable them to offer loans to consumers at 5% annual interest rate. In order to encourage multiple channel partners to access support and reach out to the people, a process of accreditation of solar system integrators was introduced by the Ministry. Reputed agencies such as CRISIL, Fitch and ICRA were involved in the process.

Out of 200 MW capacity, Ministry fixed a target of sanctioning 32 MW capacity projects in 2010-11 against which 40.6 MW capacity off-grid solar PV projects were sanctioned in 2010-11. Another 77.471 MWp were sanctioned during 2011-12 against a target of 68 MWp for the year. During 2012-13, 134.5 MW capacity projects were sanctioned. The total capacity sanctioned during Phase-I thus was 252.5 MW. For solar thermal collector area during the first phase, about 7.001 million square meter of collector area has been installed against a target of 7.0 million. 

Targets & Achievements of Phase-I

Application Segment	Target for Phase-I : (2010-13)	Achievement for Phase-I
Grid solar power (large plants, roof top & distribution grid plants):	1,100 MW	1,684.4355 MW, (including those under state initiative)
Off-grid solar applications allotment	200 MW	252.5 MW
Solar Thermal Collectors (SWHs, solar cooking, solar cooling, Industrial process heat applications, etc.)	7 million sq. meters	7.001 million sq. meters

JNNSM: Projects under Phase-I, Batch-I

Scheme		Projects allotted (MW)	Projects Commissioned (MW)	Weighted Avg. bid tariff
Large PV projects through NVVN		150	140	12.16 Rs. / Unit
			2 Projects of 5 MW each Cancelled
Migration Scheme	SPV	54	48
	ST	30	2.5
RPSSGP Scheme (PV)		98.05	88.80	CERC linked tariff
Solar Thermal projects through NVVN		470	50 MW commissioned	11.48 INR / Unit
Total		772.05	316.8	-

JNNSM: Projects under Phase-I, Batch-ll

Scheme	Projects allotted		Projects Commissioned		Minimum bid tariff	Maximum bid tariff	Weighted Average bid tariff	% Reduction in tariff
	No.	MW	No.	MW
Large PV projects through NVVN	28	350	25	310	7.49 INR / Unit	9.44 INR / Unit	8.77 INR / Unit	43%

State-wise Capacity addition

State/UT	MW	State/UT	MW
Andhra Pradesh	66.90	Punjab	9.325
Arunachal Pradesh	0.025	Kerala	0.025
Chhattisgarh	7.0	Rajasthan	606.65
Gujarat	857.9	Tamil Nadu	17.05
Haryana	7.8	Uttar Pradesh	17.375
Jharkhand	16.0	Uttarakhand	5.05
Karnataka	24.0	West Bengal	7.05
Madhya Pradesh	122.315	Andaman & Nicobar	5.1
Maharashtra	179.65	Delhi	2.5555
Odisha	15.5	Lakshadweep	0.75
Puducherry	0.025	Others	0.79
Total	Total Capacity by March 31, 2013		1684.4355
	Total Capacity by till date		1968.8355

(Also Read what is instore for JNNSM-PhaseII)

(Also Read JNNSM Phase-II to Mind these Facts Before Unveiling)

Source: Cerebral Business Research Pvt. Ltd