The scheme will be implemented through the NTPC / NVVN (the power trading arm of NTPC Limited) under Ministry of Power. The scheme envisages setting up of Grid-connected solar PV power plants of 15,000 MW aggregate capacity in three tranches:
Tranche-I: 3,000 MW: 2014-15 to 2016-17
Tranche-II: 5,000 MW: 2015-16 to 2017-18
Tranche-III: 7,000 MW: 2016-17 to 2018-19
These projects will be developed through project developers who may be from private or public sector. NTPC is also setting up some solar plants on their own as generator or owner. This proposal does not include NTPC’s own solar power plants.
2.1 In Tranche-I, which will be Batch-II of Phase-II of National Solar Mission, 3000 MW capacity of solar PV power plants will be based on bundling of solar power (3000 MW) with unallocated thermal power (1500 MW) in the ratio of 2:1 (in MW terms), for which the required 1500 MW unallocated thermal power has been made available by the Ministry of Power. The bundled power will be allotted to various States that come forward to (i) provide land for setting up the solar power projects and (ii) purchase a major portion of the bundled solar power for consumption within the State (iii) ensure connectivity to the solar power project. The capacity allotted to each such State will be set up through developers, to be selected through international competitive bidding by NTPC /NVVN. Both private and government companies would be free to bid for projects.
2.2 1000 MW capacity out of the 3000 MW under the bundling scheme will be set up on land already identified in Andhra Pradesh. The balance 2000 MW capacity under the Bundling Scheme will be allotted in other interested States that come forward.
2.3 The 3,000 MW capacity Solar PV plants under Tranche-I will be set up based on model of bundling of solar power with unallocated thermal power and fixed levelised tariffs. The mechanism of operation of this model shall be as enumerated below:
(i) The eligible plant capacities will be minimum 10 MW and maximum may be fixed for each State Lot of projects on the basis of size of the lot, land availability and requirement. The plant capacities will therefore differ from State to State between these limits.
(ii) The bidding will be State specific and conducted through e-bidding. NVVN/NTPC will develop detailed guidelines for e-bidding. It will be based on fixed levellised tariffs. The developers will submit bids quoting a fixed levellised tariff for the entire project duration of 25 years. They will then be committing to sell power from their plants to NTPC /NVV N at the quoted tariff over the 25 year period.
(iii) There will be State specific tenders. The selection of bids will be done based on the tariff quoted by the bidders. Selection will be based on lowest quoted levellised tariffs. The tariff bid cannot be higher than the Applicable Tariff on the day bids are received as may be fixed by the State Electricity Regulatory Commission (SERC) for the State where the projects are to be set up/ Central Electricity Regulatory Commission (CERC). Once agreed, then the tariff will be applicable for 25 years and cannot be changed by the State Electricity Regulatory Commission for this period.
(iv) The bidders will be free to avail fiscal incentives like accelerated depreciation, concessional customs and excise duties, tax holidays, etc. available for such projects. The same will not have any bearing on comparison of bids for selection. As equal opportunity is being provided to all bidders at the time of tendering itself, it is upto the bidders to avail various tax and other benefits.
(v) Solar power generated from the selected plants shall be purchased directly by NTPC / NVVN at the quoted tariffs. NTPC / NVVN will bundle this solar power with unallocated Thermal Power from Coal based stations of NTPC on 2:1 basis (2 MW of solar with 1 MW of thermal), and sell the bundled power to willing State Utilities under 25 years Power Sale Agreements (PSAs), at weighted average tariff of the solar and thermal components plus their proposed trading margin of Rs.0.07/kWh, which is expected to be attractive for the utilities. The tariff for thermal power component will be as per rates fixed by CERC for power from the respective thermal power plant from which power is allotted.
(vi) The developers will be free to reconfigure and repower their plants from time to time during the PPA duration. However, the NTPC / NVVN will be obliged to buy power only within the Capacity Utilisation Factor (CUF) range laid down in Power Purchase Agreement (PPA) as per guidelines. Excess power generated whether in normal course or through repowering will be purchased at a notional support price of Rs.3/kWh only. It will be at the option of the developer to offer it (excess power) to NTPC/ NVVN or sell in open market. Further, the developer will be free to sell power to any one for period beyond 25 years of firm PPA offered by NTPC/ NVVN.
2.4 MNRE will devise suitable mechanism for implementation of 12,000 MW capacity Solar PV projects under Tranche-II and Tranche-III keeping minimum support from the Government, to be determined after getting some experience while implementing Tranche-I. This Government support could be in the form of low cost long-tenure loans or other means.
The time period indicated for these tranches can be fast tracked by MNRE based on experience of Tranche-I.