SOLAR POWER DEVELOPMENT –

VGF OPTION UNDER JNNSM

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Dr. Ashvini Kumar

Director (Solar)

Solar Energy Corporation of India

SOLAR ENERGY CORPORATION OF INDIA

A Government of India Enterprise under the

administrative control of MNRE.

Incorporated on 20th September 2011.

Under Section-25 of the Companies Act, 1956.

“Not for profit” company.

Authorised capital of Rs 2,000 Cores

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SECI Activities

Apart from the mission activities SECI is doing the following projects.

Solar PV power plants.

Solar Mini/Micro Grids

Solar Thermal Power Plants

Solar Water Heaters

Solar Roof-Top Systems

Solar Home lighting and Solar Street lights

Hybrid projects

1. Solar + Gas

2. Solar + Biomass

3. Solar + Hydro/Pump Storage

R&D activities.

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Broad mandate : Implementing & Monitoring agency of JNNSM

from “Concept to Commissioning”

JNNSM Road Map

Application Segment Target for Phase I

(2010-13)

Cumulative Target for

Phase 2 (2013-17)

Cumulative Target for

Phase 3 (2017-22)

Grid solar power (large plants, roof top & distribution grid plants)

1,100 MW

10,000 MW 20,000 MW

Off-grid solar applications

200 MW

1,000 MW

2,000 MW

Solar Thermal Collectors (SWHs, solar cooking/ cooling, Industrial process heat applications etc.)

7 million sq. meters

15 million sq. meters

20 million sq meters

Solar Lighting System 5 million 10 million 20 million

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Regulatory measures- RPO/REC

Supporting grid connected projects to bring volumes and

reduce prices

Financial support for off-grid

Support R&D in India

Encourage manufacturing

HR development

Policy and Regulatory Support

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Ground Measurement of Solar Radiation Andhra Pradesh 6

Gujarat 11

Haryana 1

Madhya Pradesh 3

Karnataka 5

Rajasthan 12

Chhattisgarh 1

Ladakh 1

Maharashtra 3

Pudducherry 1

Tamil Nadu 6

• C-WET is implementing the project for setting up 51 ground monitoring stations

• Centralized data collection, analysis and calibration of measuring sensors

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State Initiatives

S.

No

State Solar Specific Programme

1. Gujarat Announced – 968.5 MW

Commissioned – 857 MW

2. Maharashtra Commissioned – 100 MW (includes 40 MW setup in

Rajasthan under RPO).

Under installation: 150 MW at Sakri/ Dhule

3. Karnataka Commissioned – 8 MW , Approved plan for 200 MW

Bids invited/allotted– 70 MW, Min. tariff – Rs.

7.94/unit

Bids to be invited-130 MW

4. Rajasthan Tendered – 200 MW, 75 MW at Rs. 6.45/Unit

awarded

5. Odisha Announced -50 MW

Awarded – 25 MW, Minimum tariff – Rs. 7/unit

State Initiatives (2)

S.

No

State Solar Specific Programme

6. Uttar

Pradesh

Announced – 500 MW till March 2017 (10 yr PPA)

First Phase – 200 MW

7. Andhra Pd. Policy announced in November 2012 for 1000

MW (1 – 5 MW, Rs.6.49/Unit)

8. Tamil Nadu Announced – 3000 MW Tendered-1000 MW

Bids received - 498 MW

(60 MW bids < Rs 7: 200 MW bids - Rs 7 to 8;

141 MW bids between Rs 8 and Rs 10; 75 MW

bids > Rs 10.

9. Madhya

Pradesh

Awarded– 200 MW

Minimum tariff – Rs. 7.90/unit (Alpha-20 MW), Rs

8.05/Unit (Welspun – 125MW)

Growth of Solar Capacity (MW)

3 11 36

936

1684

0

200

400

600

800

1000

1200

1400

1600

1800

2008-09 2009-10 2010-11 2011-12 2012-13

So

lar

Cap

acit

y (

MW

)

State MWp % Gujarat 857.9 50.96 Rajasthan 551.2 32.74 Maharashtra 100.0 5.94 Madhya

Pradesh 37.3

2.22 Andhra Pradesh 23.2 1.38 Uttar Pradesh 17.4 1.03 Tamil Nadu 17.1 1.01 Jharkhand 16.0 0.95 Karnataka 14.0 0.83 Orissa 13.0 0.77 Punjab 9.3 0.55 Haryana 7.8 0.46 A & N Island 5.1 0.30 Uttarakhand 5.1 0.30 Chhattisgarh 4.0 0.24 Delhi 2.6 0.15 West Bengal 2.1 0.12 Lakshadweep 0.8 0.04

MNRE Strategy for Phase II

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Award of capacity to be spread out over Initial two years of plan period as:

It facilitates planning for manufacturers as well as developers

Learning from prior development would be available for subsequent bids

Benefits of cost reduction could be achieved

More states could come up the curve to participate in the process

Maximize chances of achieving targets within desired timelines

Preferably bidding process for allocation of target capacity to end before 2015-16

Lower dependence on Bundling

Domestic Content – Key for Phase II

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Development of 4-5 GW of manufacturing capacity is one of the objectives of JNNSM

Current manufacturing capacity (SPV): ~2000 MW (Module)

Cheaper international loans available with imported components

DCR conditions under schemes entailing direct funding support by Central Government could facilitate development of domestic manufacturing capacity base.

Policy Initiatives for Further Growth in Solar Power Capacities

• Policy hallmark during Phase 1 was bundling of solar power with cheap thermal power

• Phase 2 envisages to reach 10 GW utility scale solar power capacity by March 2017.

• 4 GW under central scheme and 6 GW under various State specific schemes.

• Other Schemes are

• Grid Connected Roof Top Solar PV Power systems • CSP Pilot Projects

• Provision of Viability Gap Funding (VGF)

• Bundling is subject to availability of unallocated thermal power

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Draft Features of VGF Scheme

Tariff to be paid to the developer :

Rs.5.45/kWh, fixed for 25 years

10% less viz., Rs. 4.95/kWh for projects availing benefit of Accelerated Depreciation

Payment of VGF up to 30% of project cost limited to Rs. 2.5 cr./

MW, through competitive bidding.

Developer’s equity Minimum Rs.1.5 cr./MW

Balance can be raised as Loan.

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Release of VGF amount

VGF to be released in three tranches- – 25% at the time of delivery of at least 50%

of major equipment at site; Weightage: Modules -40% PCUs -20% Switchgear & Transformer -20% Mounting Structures -20%

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Release of VGF amount

50% on successful commissioning;

Balance 25% after 1 year of commissioning meeting requirements of generation

If during PPA duration of 25 years:

– the project fails to function at any time, or – its assets are sold, or – the project is dismantled, SECI will have right to claim assets equal to VGF paid. Legal documentation to be prepared by SECI.

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Min. & Max. Capacity

Min. Capacity of each project – 10 MW

Max. capacity – 50 MW

Max. 3 projects at different locations by one developer, subject to a max. of 100 MW.

Capacity will be the AC output at the project bus bar located within project premises.

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Grid connectivity

Inter-connection with Transmission network of STU/CTU/any other Utility at level of 33 KV or above.

Developer to submit along with Bid a letter from STU / CTU/ Transmission Utility confirming technical feasibility of connectivity of plant to substation.

Transmission of power up to interconnection point where metering is done for energy accounting, to be responsibility of Developer at own cost.

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Grid connectivity (contd.)

Option of Pooling Point where more than one SPV projects may connect

Common Transmission Line (CTL) to further connect Pooling Point to the Interconnection/Metering point.

CTL to be built and operated by the developer/any third party/by STU on behalf of developer.

Metering to be done at the Interconnection Point along with subsidiary meters at the Pooling Point to determine the generation by each project.

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Tentative Schedule

No. Event Date

1 Request for Selection (RfS) notice May 2013

2 Receipt of applications against RfS

1st Week June 2013

3 Short-listing of projects based on applications received and evaluation of bids

Mid August 2013

4 Issue of Letter of Intent (LOI) 1st Week Sept 2013

6 Signing of PPA 1st Week Oct 2013

7 Financial Closure By April 2014

8 Commissioning of projects By December 2014

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Pilot Solar Thermal Power Projects

• JNNSM document envisages setting up pilot projects to address issues related to optimization and use of improved/advanced technology options

- Advanced technology configurations which could lead to cost reduction through higher efficiency and CUF, and scale effect

- Reduction in water consumption and footprint land area in solar thermal projects

- Potential for replication in commercial projects soon after success of demonstration projects

- Potential for indigenous manufacturing

• MNRE constituted a multi-stakeholders Group in January 2011 to discuss and suggest technology configurations

Project Configurations and Sites Based on recommendations of the stakeholders group and site visits by experts, identified pilot projects to have the following configurations:

Project Configuration Identified sites and Broad

Specifications With hybrid cooling

Reduced (<= 30%) consumption of water

Bhadla (Rajasthan) Available Land Area: 150 ha Capacity: 40 MW est. CUF: 29% est.

High operating temperature

(>=500ºC) Higher efficiency

Charanka (Gujarat) Available Land Area: 140 ha Capacity: 35 MW est. CUF : 30% est.

Large thermal storage (about 8 hours)

Terkuveerapandiyapuram (Tamil Nadu)

Available Land Area: 160 ha Capacity: 25 MW est. CUF : 45% est.

Large thermal storage Base load

Nennala (Andhra Pradesh)

Available Land Area: 160 ha Capacity: 20 MW est. CUF : 65% est.

Project Details

Solar Energy Corporation of India to implement the project

Target tariff of solar power – Rs 5.83/ Unit for 25 Years

Project selection through ICB for viability gap funding

Framework of Support

At least 20% of the project cost to come as equity from the project

developer.

Debt portion could comprise of at the most 50% of the project cost

from CTF / ADB;

The maximum amount of VGF would be upto 40% of the project

cost.

Estimated project cost = Rs. 2,555 Crore

NCEF Committee Chaired by Expenditure Secretary

approved the project with Rs. 1020 crore of support

Roof Top Solar PV Power Projects

Grid connected Rooftop Projects to be supported by grant as capital subsidy for self consumption of Solar Electricity and feeding extra power to grid whenever available.

Basic aim is to mitigate consumption of diesel.

The scheme is implemented in two modes, viz., Capital Grant @ 30% of project cost, and RESCO mode with some grant and a provision of tariff from the consumer.

Scheme is implemented by SECI through competitive bidding in select cities.

Project size to be 100 kW to 500 kW, however, aggregation of capacity from smaller projects is allowed.

Balance cost is to be met by the consumer.

Grid connectivity and metering is to be in accordance with CEA guidelines or SERC’s regulations.

Status of Implementation

• Phase-I already started with the following allocations:

Chennai – 2 MW

Bangalore – 2 MW

Delhi – 1 MW

Gurgaon – 0.5 MW

• Phase-II: Bids invited for a capacity of 11.1 MW:

Jaipur – 3.1 MW

Bhubaneswar – 1 MW

Hyderabad – 2 MW

Gurgaon – 1.5 MW

NOIDA/ Gr. NOIDA – 1.5 MW

Raipur – 2 MW

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