Solar power developers offer hefty discounts on CERC tariff

The price discounts on solar power under Jawaharlal Nehru Solar Mission Phase-I are much higher than anticipated by NTPC Vidyut Vyapar Nigam (NVVN). An arm of NTPC, NVVN is the designated nodal agency to procure solar power from photovoltaic (PV) and solar thermal project developers.

According an official at NVVN, the Central Electricity Regulatory Commission (CERC) had fixed Rs 17.44 per unit for PV modules and Rs 15.40 per unit for solar thermal modules. NVVN was asked to tie up 500 Mw (megawatt) from solar thermal project developers and 150 Mw from PV developers. NVVN received 422 applications from PV and solar thermal project developers on a notice of one month.

“Unlike 2G spectrum, NVVN, instead of accepting offers on first-come, first-served basis, collected the offers and asked for price discounts on the CERC tariff. Surprisingly, for PV module, the discount was Rs 6.26 per unit, roughly 30 percent over the price of CERC. Similarly, for solar thermal module, it was Rs 4.26 per unit.”

NVVN received applications for developing 1,740 Mw of PV projects, compared to the target of 150 Mw in the first batch of Phase-I. For solar thermal, it received applications for developing 1,000 Mw, against 500 Mw.

NVVN received 422 applications to tie up 650 Mw. The applicants include Tata Power, Tata International, Reliance Industries, Reliance Infrastructure, Shree Cement, OPG Energy, Surya Power, Suryachakra Power.

NVVN had earlier invited request for qualification for 150 Mw of solar PV projects, with a capacity of five Mw each, and 500 Mw solar thermal projects, with a minimum capacity of five Mw and maximum of 100 Mw each.

NVVN had made it clear that it would award contracts to those who would provide maximum discount on CERC tariff. NVVN plans to sign power purchase agreement with selected parties by the end of January.

D Radhakrishna, power analyst, said the conditions of NVVN were quite stringent and they had asked for counter bank guarantee and indigenous equipment.