India to invite bidding for largest solar power project; aims to achieve a capacity addition of 10,000 MW by 2017

According to reports, India is about to launch the largest bidding of solar power projects worth 1,500 MW under its flagship Jawaharlal Nehru National Solar Mission (JNNSM). In what the government officials claim is the first success story of converging the three energy ministries vis-a-vis coal, power and renewable energy, solar power would be bundled with conventional power at such a huge scale in one go.

The bidding, which is a part of second batch of the phase 2 of JNNSM, aims to achieve a capacity addition of 10,000 MW by 2017. The government tendered 750 MW of solar power projects in January this year as part of this phase. While the current solar power capacity of the country is 2,600 MW, government hopes to cross 20,000 MW by 2022.The solar power produced in this phase would be bundled with the existing unallocated quota of conventional power. The pooled power would be sold at an average rate to the distribution companies, who shy away from procuring solar power citing it to be costly.

The bundling of power and its sale would be handled by NVVN (NTPC Vidyut Vyapar Nigam), the power trading arm of power generation giant National Thermal Power Corporation Limited ( NTPC). NVVN officials said that the average cost of bundled power would be around Rs 4-4.5 per unit. “We are also hoping that big names in the power sector would bid for huge capacities.The capacity being so huge this time, NVVN is also holding talks for connectivity with ‘central transmission unit’ for alignment with the main grid,” said a senior NVVN official.NVVN, which was at the helm of handling solar mission when it was launched in 2010, pulled out of it last year due to procedural delays. “With both power and renewable energy under the same minister, it was easy to co-ordinate with the power department to allocate conventional power for bundling solar power,” said a senior official at the ministry of new and renewable energy (MNRE).

Confirming the development, Tarun Kapoor, joint secretary, MNRE said, “We are in consultation with all the stakeholders and would come out with bidding guidelines soon, most likely the bidding would commence by July-August.” Minister Piyush Goyal, who is responsible for the three key energy portfolios, had earlier indicated at setting up of higher targets and advancing the timeline of the solar mission. Government is also pushing for ultra mega power projects of 1,000 MW each for solar. Solar power price has come down to Rs 6.5-7 per unit, a 60% decline in the last three years. The last batch of bidding under JNNSM had fixed tariff of Rs 5.45 per unit supported with viability gap funding.

“It was the effort of NVVN that the average cost of power came down in the first phase. The bidding saw solar power cost crashing to Rs 8-10 per unit from Rs 17 per unit in 2011,” said a MNRE official, adding that the ministry is hopeful of achieving grid parity for solar by 2017.
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