the jawaharlal nehru national solar mission implementation ... · pdf filenational solar...
TRANSCRIPT
1
Think Infrastructure.
Think IDFC.
The Jawaharlal Nehru
National Solar Mission
Implementation Issues
on Bundling Scheme
2
Think Infrastructure.
Think IDFC.
Towards a solar future…
What is the Solar Mission?
How is it being implemented?
Key issues
3
Think Infrastructure.
Think IDFC.
From 6 MW of solar power in Oct 2009 …
Solar power accounts for less than 0.1% of grid
interactive renewable power
But solar power has been deployed for off-
grid electrification
Programme/Systems Achievement*
Off-Grid/Distributed Power
Solar PV Power Plants &
Street Lights2.39 MWp
Decentralized systems
Home Lighting Systems 5,10,877 nos
Solar Lanterns 7,67,350 nos
Street Lighting System 82,384 nos
PV Pumps 7,247 nos
Solar Water Heating Systems 3.12 million sq.m. of
collector area
Solar Cookers 6.57 lakh
Source : MNRE
Small Hydro Power 16.2%
Cogeneration-bagasse 8.0%
Wind Power 70.1%
Biomass 5.3%
Waste to Energy 0.4%
Solar power 0.04%
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…to 20,000 MW of solar power by 2022
Phases Grid solar power including roof topOff grid solar
applications
Phase I (2010-13) 1000 MW 200 MW
Phase II (2013-17) 4000 MW (10,000 MW based on enhanced
international finance & technology transfer)
1000 MW
Phase III (2017-22) 20,000 MW 2000 MW
… and Grid Parity by 2022 & Coal Parity by 2030
Land based utility scale solar power projects thru a bundling scheme
Grid connected Roof top PV systems thru Generation Based Incentives (GBI)
20 million solar lighting systems and other off-grid systems to cover about 10,000 villages through
capital subsidies
3 key focus areas
5
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To make targets a reality, the Mission aims to provide an
enabling environment for developers & manufacturers
20000 MW
Regulation
Fiscal incentives
R&D
Indigenous manufactu
ring
Demo Projects
HRD
… & envisages gradual deployment to attain critical mass till costs come down & rapid scale up thereafter
6
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Salient features of the Mission…(1/2)
Renewable Purchase Obligations of utilities to be
split into solar and non-solar
RPO may start with 0.25% in Phase I and increase to
3% by 2022
RPO to be fixed after modification of the National
Tariff Policy 2006
RE Certificates to meet RPO
NVVN appointed as Nodal Agency for purchase & sale
of grid connected solar power at 33 kV & above
under Phase –I
For each MW of solar power, MOP to allocate
equivalent MW capacity from unallocated quota of
NTPC stations
NVVN to bundle solar & thermal power & sell it at
regulated tariff plus facilitation charges
Provision of GBI to100 MW capacity solar projects
connected to LT/11 KV grid
Eligibility: own consumption as well as power fed into
the grid
GBI rate: tariff fixed by CERC minus notional tariff of
Rs. 5.5 per unit, with 3% annual escalation
Technology configurations not covered under 1,000
MW capacity
Projects to be set up following competitive bidding
to enable price discovery
Maximize indigenous content
Technology transfer
Solar RPOBundling scheme
Demonstration ProjectsGeneration Based Incentive
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Salient features of the Mission…(2/2)
Improve efficiency of existing/new materials &
applications & develop cost effective storage
technologies
Development of National Centre of Excellence &
Centres of Excellence to undertake & fund R&D
High level Research Council to guide overall strategy
Support Incubation & Innovation through a Venture
Fund
Promote solar home lights & other power applications
to cover 10,000 MW villages & hamlets
Re-finance facility/Soft loans up to 5% annual interest
rate by IREDA
30% subsidy for select applications
90% subsidy for niche applications to special category
areas
R&D
Off - grid opportunity
Build technically qualified manpower of international
standard
Develop specialized courses at engineering colleges
Ministry of Labour to introduce training modules/
course materials for technicians
100 fellowships a year to support students/ groups
National Centre for PV Research & Education at IIT,
Mumbai
Increase competitiveness of solar projects & provide
enabling environment for solar manufacturers
Recommendation to MoF for custom and excise duty
concessions/exemptions on specific capital
equipment, critical materials, components & project
imports
SEZ like incentives to manufacturing parks
Fiscal/Financial incentives
HRD
8
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Towards a solar future…
What is the Solar Mission?
How is it being implemented?
Key issues
9
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Think IDFC.
Bundling scheme proposes to make solar power cheaper
by bundling it with coal based power
Solar Power Developer NTPC Unallocated Power
PV: Rs. 17.91/unit
CSP: Rs. 15.31/unit
NVVN
Rs. 2.5/unit
X kwh4X kWh
Price of bundled power or weighted price
PV: (17.91X + 10X)/5X = Rs. 5.58/unit
CSP: (15.315X + 10X)/5X = Rs. 5.06/unit
Sale price of power given ratio of
PV to CSP is 50:50 = Rs. 5.32/unit
Utility
… to approx. Rs. 5.50/unit & make it more attractive than power purchased in the marketAlso addresses concern of payment security for SPDs
Figure for illustrative purposes only
10
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There are separate schemes for projects under
development & new projects
SPDs who have signed a PPA with a discom
on or before November 19, 2009 but project
CoD not achieved
SPDs who have filed a Petition and PPA for
determination of tariff with the concerned
SERC but project CoD not achieved
Only about 25-30 MW expected (SPDs under
earlier GBI scheme)
SPDs approaching with new proposals
Confirmation for plant CoD to be on or
before March 31, 2013
New Projects SchemeMigration Scheme
Two pronged approach here: state provides land, water, sanctions & grid connectivity and GoI takes care of PPAs and sale of power
11
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Migration Scheme
12
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Criteria for participation as per guidelines issued
Concurrence of discom/State Government for migration to JNNSM
Confirmation from Discom for power purchase from plant through NVVN
Possession of 100% of land (defined at 2 hectares/MW)
Approval from STU for evacuating power to the grid at 33 kV & above
Necessary water linkage (for CSP plants)
Letters of comfort for funding the project
BG @ Rs. 50 Lac per MW to NVVN, half on signing of MoU & half on signing of PPA
BG valid for 15 months for PV & 31 months for thermal projects
No change in equity holding from signing of MOU till PPA execution; but listed companies exempt
After PPA, controlling shareholding in SPD to be maintained for 3 years after commencement of power
supply
Financial closure within 3 months of signing PPA; no extension allowed
Project to be removed from list of projects eligible for migration & BG will be forfeited
CoD for PV within 12 months of PPA & of Solar Thermal within 28 months of PPA
PPAs to be the same as that signed with discoms & power to be sold to the same discoms
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Time frame for implementation
Announcement of
list of eligible projects
Mar 18, 2010
Signing of MoU
Apr 17, 2010
Signing of PPA
July 17, 2010
SPD to give
details to NVVN
Feb 26, 2010
14
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New Projects Scheme
15
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Salient features
Ratio of PV and thermal at 50: 50
Technology agnostic within PV & thermal
Encourage deployment of latest technologies through projects wherein SPDs could tie up with proven
technology providers/module manufacturers offering better efficiency/technology (with successful
operation for at least 2 years) than what is available & being deployed in India, after an evaluation of
the proposed technology
Review status after one year to make any modifications
Technology portfolio
PV: min of 5 MW & max of 25 MW
Thermal: min of MW & max of 100 MW
Min & Max capacity of projects
PV: projects to use indigenous modules; proposal to mandate use of indigenous cells
Thermal: 30% of total project cost to be utilized for domestic equipment
Domestic content
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Salient features
Net worth of Rs 2 Crore/MW
Technical Criteria
SPD to propose deployment of commercially established technology - at least 1 project operational of
the proposed technology for last 2 years anywhere in the world
Detailed technical parameters specified
Land arrangement
Land requirement specified at 2 Hectares/MW
SPD to have at least 50% of land when submitting EoI & entire land before signing PPA
Allotment letter of state in case of government land, ‘Agreement for Sale of land’ with land owner in
case of Private Land, long term lease arrangement (for at least 30 years) in case of land being taken
on lease
Grid connectivity
At 33kv/132kv or higher voltage levels with grid sub-station & not distribution sub-station
SPD to give letter from STU confirming technical feasibility of connectivity
SPD responsible for transmission arrangement from plant to sub-station
Water arrangement
SPD to submit documentary approval from state/local authority for quantity of water required for
thermal plants
Qualification criteria
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Salient features
All projects meeting qualification criteria irrespective of share of technologies
Short-listing of projects
For PV projects, phased selection by allocating overall capacities over FY 2010-11 & FY 2011-12
If total aggregate capacity short listed under any technology is higher than the capacity to be selected
Option 1 : Reverse bidding where SPDs indicate percentage of tariff to be shared with NVVN for
administrative costs & risk sharing. SPD offering max share to be selected first & so on
Option 2: All projects up to a capacity of 5 MW for PV & 20 MW for thermal selected. Remaining
projects to be allotted remaining capacity equally
To buffer for implementation failures, total capacity can be 105% of capacity to be selected for that
technology
Provision to be used only if last project selected is proposed for a capacity, which requires total
capacity for the technology to be increased beyond what was originally decided
Selection of projects
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Think IDFC.
Salient features
BG @ Rs. 50 Lac per MW to NVVN, half on signing of MoU & half on signing of PPA
BG valid for 15 months for PV & 31 months for thermal projects
No change in equity holding from signing of MOU till PPA execution; but listed companies exempt
After PPA, controlling shareholding in SPD to be maintained for 3 years after commencement of
power supply
Financial closure within 3 months of signing PPA; no extension allowed
CoD for PV within 12 months of PPA & of Solar Thermal within 28 months of PPA
Others
19
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Think IDFC.
Time frame for implementation
Invitation
of EOI
Mar 31, 2010
Jun 30, 2010
Sep 15, 2010
Last date for
applications
Selection of
projects by
Central
Empowered
Committee
Sep 30, 2010
Signing of MoUs
with SPDs
Signing of
PPAs & PSAs
Oct 31, 2010
Company to provide Board Resolution on intention to develop
project
20
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Some features of PPAs
PPAs and PSA are co-terminus agreements & are back-to-back
NVVN to assign payment of LD on SPD if CUF of the plant is found to be below CERC specified CUF
By 5% at any point in the term, or
By 3% for consecutively or non-consecutively for 3 months in a year
Right to contracted capacity:
SPD to sell exclusively to NVVN the entire Contracted Capacity subject to maximum of energy generation
NVVN not obligated to purchase power generated beyond the contracted number of units. SPD free to sell
such power to third party
SPD free to sell power generated before Scheduled COD to third party
Limitation of Payment Liability
NVVN’s payment liability limited to payments realized from Discom after exhausting all payment security
measures
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Some features of PSAs
Payment Security Mechanism
Discom to open LC within 1 month of Scheduled COD to be made operative prior to Due Date of first
Monthly Bill
LC to be revoked if Discom fails to pay a Monthly Bill or Supplementary Bill or part thereof within 30 days
from the Due Date
Renewable purchase obligation of Discom shall be considered to be met only if there is no payment default
towards NVVN
Third Party Sale by NVVN
In case NVVN is not able to realize the due payments beyond 30 days after the Due Date, NVVN shall have
the right to divert the Bundled Power or part thereof and sell it to any third party
22
Think Infrastructure.
Think IDFC.
Towards a solar future…
What is the Solar Mission?
How is it being implemented?
Key issues
23
Think Infrastructure.
Think IDFC.
General concerns
Lack of long term strategy
How will 4000 MW be scaled to 10,000 MW at the end of 12th plan?
Is technology the Achilles Heel?
No solar supply chain in India
Land acquisition issues will affect solar plants
No time frame defined for finalization of R&D strategy
24
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Think IDFC.
Concerns on bundling scheme
Cheap coal based power has been made more expensive
GoI was contemplating using unallocated power to incentivize open access in states. What happens to that?
Bankability of agreements given that SPDs will not sign PPAs directly with offtaker
Adequacy of time frame for commissioning of solar thermal projects
Financial criteria not at par with established practices in coal sector
Overall issues
Specific issues on New Projects Scheme
No justification for restriction of plant size
Current capacity does not promote economies of scale
Transmission arrangements
Will cost justify small sized projects?
Transmission line to be compatible with high voltage levels; capacity of line may remain unutilized
Adequacy of time frame for financial closure
Land acquisition for entire proposed capacity but eventual capacity allocation may be less
25
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Main concerns on proposed PPAs/PSAs
LD on SPD if CUF is below CERC specified level
CERC CUF already on higher side & does not reflect locational differences
NVVN will not offtake power beyond specified maximum generation
Where does SPD go to sell such high cost power?
NVVN does not bear payment risks
How will SPDs get paid if discom defaults more than once?
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Regulatory, Credit & Technology risk hindering
robust financing possibilities
Regulatory
Lack of visibility on approved capex beyond FY 2012 & 2013
NVVN does not bear payment risks
PPA & PSA co-terminus
Inability of GoI to force states to adopt JNNSM
SEB
Poor health of most of SEBs
Willingness of SEBs to be bound by JNNSM
Technology & Developer
Existing technology unproven in Indian context
No clear technology leader
Lack of credible developers
