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National Solar Mission invites investment worth Rs 50 billion

According to reports, even as action is missing in new power project commissioning in the country, investors have pumped in Rs 5,000 crore for developing solar power projects worth 750 mw under the second phase of the Jawaharlal Nehru National Solar Mission (JNNSM).

The average bid amount in the domestic content and open category was Rs 2.13 crore per unit and Rs 1.06 crore per unit respectively against the proposed government funding of Rs 2.5 crore per unit.
Solar Energy Corporation of India (SECI), the executing body for JNNSM phase -2 under the aegis of ministry of new and renewable energy, had invited project developers to set up solar power projects under PPP mode with government support through viability gap funding (vgf) for a solar tariff of Rs 5.50 per unit.

The second leg of government’s flagship program on solar power development received bids totalling 2,170 mw, triple the proposed requirement, from 53 companies including state power utilities, global renewable energy players and fresh entrants with international funding.

Gujarat Power Corporation emerged as the lowest bidder by quoting Rs 17 lakh per unit of project cost for developing a 30 mw solar power plant. The project is under the domestic content category. Under the open category, Swelect Energy Systems bid for Rs 1.36 crore per mw of project cost.

“The total envisaged amount under the vgf scheme was Rs 1,875 crore when the program started. But with the companies discounting on the amount, the government would need to disburse only Rs 1,200 crore now,” said Ashwini Kumar, director (solar), SECI.

Due to uncertainties over fuel supplies and bidding terms, no power utilities have signed long term power purchase agreements for over a year with power producers. However, SECI will ink 25 year long PPAs for Rs 5.5 per unit with 53 project developers for 750 mw.

“With the help of vgf scheme, solar is nearing grid parity. Discoms across the country would buy solar power at a fixed tariff which is comparative with conventional power,” said Tarun Kapoor, joint secretary, MNRE.

Government has earlier set a target to achieve grid parity i.e. sell solar power at the same rate as conventional by 2017. “Our experiment with vgf turned out to be successful with foreign investment coming in for development of domestic solar industry. Looking at the current trend, even vgf amount would gradually go down,” said Kapoor.

Emerging as the highest bidder, a fairly new entrant Azure Power has bid for 200 mw of capacity, 60 mw in domestic and balance in imported content category. Following the suite is New York Stock Exchange listed SunEdison whose 50 mw each were approved under the domestic and open category, Welspun Energy with 160 mw, IL&FS and Essel Infra with 100 mw each. Just a year old in the industry, Hero Solar Energies bid for 50 mw.

Amongst the foreign companies, US major First Solar won bid for 30 mw solar power project with imported content. France based multinational Solairedirect group, which created history in the last phase by bidding the lowest tariff for a 5 mw project has up scaled to 30 mw project bid this time at a fixed tariff of Rs 5.50 per unit.

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