Ministry of New and Renewable Energy

19/03/2015

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Hon’ble Finance Minister, inter-alia, announced asunder:

“New & Renewable Energy deserves a very high priority. Itis proposed to take up Ultra Mega Solar Power Projects inRajasthan, Gujarat, Tamil Nadu, and Laddakh in J&K. Ihave set aside a sum of Rs. 500 crores for this. We arelaunching a scheme for solar power driven agriculturalpump sets and water pumping stations for energizing onelakh pumps. I propose to allocate a sum of Rs. 400 croresfor this purpose. An additional Rs. 100 crores is set asidefor the development of 1 MW Solar Parks on the banks ofcanals. Implementation of the Green Energy CorridorProject will be accelerated in the financial year to facilitateevacuation of renewable energy across the country.”

Budget Announcement 2014-15

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Bird’s Eye view of Charanka Solar Power Project, Gujarat

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Solar power park: Is a large chunk of land developed for setting up of anumber of solar power projects wherein the solar power developers will bemade available land which is free from statutory clearances with commoninfrastructure facility such as water, transmission lines, roads, drainage,communication network etc. in place.

This is on the lines of Charanka Solar Power Project in the state of Gujarat.

Ultra Mega Solar Power Projects: Ultra Mega Solar Power project is a single power project with capacity of

over 500 MW. These projects may be set up in some of these Solar Parks.

The projects may be bid out after developing the park or simultaneously with park developments. In some cases full park may be one Ultra Mega Project.

In such cases the J.V. set up to develop the Ultra Mega Solar Projects may become the implementing agency also.

Concept of Solar Power Park and Ultra Mega Solar Power Project

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A1 A2 A3 A4 A5 A6

POOLING STATION66KV

AC

AC AC AC

Solar Park

POOLING STATION66KV

POOLING STATION66KV

AC AC

B1 B3

SUB-STATION 220KV/400KVTRANSFORMER

A & B= Solar Projects

AC to Grid

B2 B4 B6B5

Schematic Representation of Solar Park

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Setting up of 25 Solar Parks and Ultra Mega Solar Power Projects, each with acapacity of 500 MW and above, thereby targeting 20,000 MW of solar powerinstalled capacity.

Duration: Span of 5 years starting from 2014-15

Eligibility: All the states and Union territories are eligible for benefits under the

scheme.

Capacity of Solar Park: 500 MW and above.

Smaller parks in Himalayan & other hilly States where contiguous land may be difficult to acquire in view of the difficult terrain will also be considered.

Smaller parks may also be considered in States where there is acute shortage of non-agricultural lands.

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• Implementation Agency:

MNRE’s Nodal Agency - Solar Energy Corporation of India (SECI) onbehalf of Government of India (G0I). SECI to handle funds to bemade available under the scheme on behalf of GOI.

The states, to designate an agency for the development of solarparks to be developed in following three modes:

Mode 1: The State designated nodal agency undertakes the development& management of the solar park. This agency could be a StateGovernment Public Sector Undertaking (PSU) or a Special Purpose Vehicle(SPV) of the State Government.

Mode 2: A JV Company is set up between State designated nodal agencyand SECI for the development & management of solar park with 50%equity from SECI and 50% equity from the State Government Agency(State Government may also allow more than one agency provided totalequity from State Government remains 50%).

Mode 3: The State designates SECI as the nodal agency and SECIundertakes the development and management of solar park on behalf ofState Government on mutually agreed terms.

Mode 4: Private entrepreneurs promote solar parks without any equityparticipation from SECI, but may have equity participation from the StateGovernment or its agencies.

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Activities to be undertaken by the Implementation Agency or SPV:

Develop, plan, execute, implement, finance, operate and maintain the Solar Power Park.

Identify potential site and to acquire/possess land at potential sites for Solar Power Park.

Carry out site related studies/investigations.

Obtain statutory & non statutory clearances and to make area development plan within Solar Power Park.

Design a plan for sharing development cost between the developers and the park.

Create necessary infrastructure like water, transmission lines, roads, drainage etc. to facilitate Solar Power Project developer for faster implementation of Solar Power Projects.

Frame out transparent plot allotment policy and specify procedures pursuant to the relevant State policies and their amendments thereof.

Provide directives for technology-specific land requirements.

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Engage the services of national/global experts/consultants to promoteSolar Power Park related activities.

Facilitate the State Government to establish educationalinstitutions/training facilities within Solar Power Park for developmentof manpower skill related to Solar Power.

Any other activities related to Solar Power Park as per the directivesfrom MNRE and the State Government.

Environmental clearances before allocating the land to prospectivedevelopers.

Note: All infrastructural requirements outside the park suchas connecting road, provision of water supply, constructionelectricity, etc. to make the park functional, will be the soleresponsibility of the concern State Government.

Contd...

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Financial model: Allotment price of plot:

The implementing agency will sell/lease out the plots to prospectiveproject developers. Lease period of 30 years or as per State landpolicy.

The Allotment Price per metre square (inclusive of all applicable taxes,duties, cess etc.) payable by the plot applicant for the applicationsmust be specified in a transparent manner.

The allotment price will be reviewed annually and an annual incrementmay also be specified.

Registration for the plot:Suggested Recovery Pattern:

A one-time registration fee (per project or per MW) will be collectedby inviting applications from the prospective buyers when the schemeis finalized, land identified and marked.

An advance will be collected from the prospective buyers when 50% ofthe land is acquired. This advance will be 10% of the sale price orlease amount.

Another instalment of 25% of the price of land or lease amount maybe taken when full land is acquired.

Further instalments may be collected while plot are being developed.Final 15% of the price of land or lease amount may be collected at thetime of allotment of the plot to the buyer.

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Self sustenance of the Implementation Agency: The surplus money that will accrue from the sale may be converted

into equity of promoters so that the implementing agency gets afinancial strength for long term sustenance.

The implementation agency may put in some of its own equity andcan raise loans, depending on the availability of funds andrequirement.

The subsidy of MNRE under the scheme would bring down the costof the project to that extent.

The SPV will also create a small corpus fund to ensure upkeep andmaintenance in the future, which may be supplemented with someannual charges.

Land acquisition / site selection: Land for the setting up of the solar park will be identified and made

available by the State Government.

States to identify sites receiving good solar radiation and sites whichare closer to CTU (i.e. Power Grid), preferably locations with sparesolar installed capacity and water availability.

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Power Purchase arrangement:The selected solar power developer for solar park, shall enterinto Power Purchase Agreements (PPAs) with the beneficiary ofsolar power, viz. the State Utilities/ Discoms who are willing tobuy power under any State Scheme, or go for any third partysale.

State Government’s Obligation to purchase power: State Government to buy power through its Discom at least

20% of the power produced.

Preference to such states which agree to buy higherpercentage of power.

Connectivity with CTU systems to be ensured in case Staterefuses to buy power. State to waive off wheeling charges.

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Transmission and Evacuation: The Implementing Agency to construct few 66KV Pooling stations

and draw transmission lines from Pooling stations to Sub-stations. CTU/STU to construct 220KV/400KV Sub-station.

SPD to draw transmission lines from respective project to thePooling station.

STU to create Sub-station nearby Solar Park if substantial poweris purchased by State Government otherwise CTU shall maketransmission arrangements for dispatch of power to load centres.

If the cost of transmission/evacuation infrastructure is high,separate proposal for funding through NCEF/ExternalFunds/Green Corridor Project would be necessary.

Power to remove difficulties If there is need for any amendment to the Scheme for

implementational problems, MNRE will be competent to makesuch amendments with the approval of Minister-in-charge.

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MNRE Support:

Grant upto Rs. 25 lakhs for preparing DPR, conducting surveys etc.

Grant at the rate of up to Rs.20 lakhs/MW or 30% of the project cost including Grid-connectivity cost, whichever is lower, which will be released as per the following timelines:

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S. No. Milestone % of subsidydisbursed

1 Date of issue of administrativeapproval

5%

2 Land acquisition (50% landacquired)

20%

3 Transmission plan finalization(internal and external)

10%

4 75% of Land acquisition and startof work on transmission

20%

5 Remaining to be disbursedbased on progress andrequirements of funds

35%

6 Final Instalment 10%

S. No. Milestone Timelines

1 Date of issue of

administrative approval

Zero Date

2 Land acquisition and

Financial Closure

6 months from zero

date

3 Construction of Pooling

Substation, Land

Development and other

Common facilities as per

DPR

15 months from

zero date

4 Transmission line and Grid

Connectivity

18 months from

zero date

5 Final instalment on

completion

18 months from

zero date

S.

No.

State Capacity of Solar Park

(approx..)

Land Identified at Area of Land

(approx..)

1 Gujarat 700 MW Taluka- Vav, Distt.-Banaskantha 1407 hectares

2 Madhya Pradesh Two parks each with

capacity 750 MW

Rewa-Distt. +

Neemuch & Agar

1400 hectares

1400 hectares

3 Telangana 1000 MW Mehboob Nagar-Distt. 2189 hectares

4 Andhra Pradesh Two parks with capacities

1500 MW & 1000 MW

Anantpur & Kadapa Dist.

+

Kurnool Dist

5628 hectares

5 Karnataka 2000 MW Tumkur Dist 3000 acres

6 Uttar Pradesh 600 MW Jalaun, Sonbhadra, Allahabad &

Mirzapur Dists.

1038 hectares

7 Meghalaya 20 MW West & East Jaintia Hill Dists. 27 Hectares

8 Punjab Two parks each with

capacity 500 MW

Patiala, Fatehgarh Sahib, Ludhiana

& Gurudaspur

5285 Heatares

9 Rajasthan Three parks with capacities

700 MW, 1000 MW &

1000 MW

Bhadla Phase II, Bhadla Phase III and Jaisalmer Phase I

5400 hectares

10 Tamil Nadu 500 MW Ramanathapuram Dist. 568 Hectares

11 Total 12,520 MW

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The Total Cost of Solar PV Project in a Solar Park considered is Rs.7.00 Cr/MW(CERC- Rs.6.91 Cr/MW for FY 2014-15)

Percentage of Land, Evacuation Cost and Development Cost Out of this totalcost is-

Land Cost - 2%

Evacuation Cost - 10%

Development Cost - 8%

◦ Total Cost - 20%

The average cost of Solar Park per MW comes to around 20% of total cost, i.e.Rs.1.4 Cr/MW (20% of Rs.7.00 Cr/MW = Rs.1.4 Cr/MW).

State Government to arrange land and also make part development of SolarPark like Roads and other Infrastructure, which comes to around Rs.0.45Cr/MW.

The remaining part of Solar Park is mainly the Evacuation Cost and partdevelopment, which works out to around Rs.0.95 Cr/MW.

(Rs.1.4 Cr/MW – Rs.0.45 Cr/MW = Rs.0.95 Cr/MW)

Particulars Cost (Rs. In Cr.)

% of the Project Cost

Land 0 0.0%

Site Development 87.75 12.5%

- Roads (40 km 30m wide @1.2 Cr./km) 36

-Roads (30 km 15m wide @0.95 Cr/km) 19

-Land levelling/grading etc. (5 million cu.m.@ Rs. 35/ cu.m) 22.75

-Water Supply System 10

Power Infrastructure within Solar Park 230 32.8%

-33 kV substation (4*300 MVA @ 33/Cr/S/s plus 80 km cabling between projects)

200

-Power Infrastructure – 220 kV 30

Building and Establishment 10 1.4%

Sub Total-A 327.75

Power Infrastructure from Solar Parks to CTU (400/220 kV s/s) 320 45.7%

Preliminary Exp. @ 3% of Sub Total-A 9.8325 1.4%

IEDC and Contingency @ 3% of Sub Total-A 9.8325 1.4%

IDC @ 10% of Sub Total-A 32.775 4.7%

Project Cost Total 700 100.0%