MNTR tightens tariff ceiling to Rs 2.8/unit from Rs 3.5/unit under CPSE Ph-II solar scheme

The Ministry of New and Renewable Energy (MNRE) on Monday announced a reduction in tariff by 70 paise to Rs 2.8 per unit under the second phase of the Central Public Sector Undertaking (CPSU) programme for development 12 GW of solar projects.

Besides, the ministry has also increased the timeframe for implementation of these projects from existing 18 months to 24 months and also changed the nodal agency for conducting auctions of these projects.

Now, the Indian Renewable Energy Development Agency (IREDA) would complete the task instead of Solar Energy Corporation of India (SECI).

The office order amending the scheme on Monday stated that the usage charge would not be more than Rs 2.8 per unit, which shall be exclusive to any other third party charges like wheeling and transmission charges and losses, point of connections charges and losses, cross-subsidy surcharge, state load dispatch centre/regional load dispatch centre charges, etc as may be applicable.

Thus, all the bidders would have to bid below Rs 2.8 per unit under the auction for solar projects in the scheme. Earlier, the usage charge was fixed at Rs 3.8 per unit.

Similarly, the order further states that the IREDA will be entrusted with the task of conducting bidding amongst the government producers for allocation of solar power project capacity under the scheme with viability gap funding (VGF) as bid parameter to select project proponent.

It also provides that the VGF of Rs 70 lakh per MW (capacity) can be used by government producers as their equity in solar projects being set up by them under the schemer.

The amendments also provide that these producers would be eligible for VGF under this scheme as well as other solar park schemes also.

About the timeline to implement the project, it says that the projects with up to 500 MW capacity would be implemented within 24 months from date of letter of award.

In the project of more than 500 MW capacity, the project capacity up to 500 MW would be commissioned within 24 month from the date of letter of award and balance capacity to be commissioned in next six months.

Earlier, the scheme provided the timeframe of 18 months for commissioning the projects from the date of letter of award.

An additional clause to the scheme also provided that the IREDA can also allot solar projects of up to 50 MW to interested entity at the L-1 rate (lowest tariff bid) discovered in mist recent auction (within four months of that auction). PTI KKS