Finally after huge anticipation & series of delays the Cabinet Committee on Economic Affairs has finally approved the implementation of a scheme for setting up of 750 MW of Grid-connected Solar PV Power Projects under Batch-1 of Phase-11 (2013-17) of the Jawaharlal Nehru National Solar Mission (JNNSM) with Viability Gap Funding (VGF) support from the National Clean Energy Fund (NCEF).
The estimated VGF requirement for the scheme is to the tune of Rs. 1,875 crore at the rate of Rs.2.5 crore/ MW. The VGF scheme will facilitate setting up of the 750 MW grid connected solar power projects, in mainly the private sector on Build, Own and Operate (BOO) basis at various locations.
Selection of Projects based on VGF :
Unlike the reverse bidding on tariffs for JNNSM Phase I (Batch I & II), this time the allocation of projects would be done on totally different basis. i.e. on minimum VGF requirement.
To cut short – the developers asking for the lowest amount of VGF per MW from SECI out of 30% of the project cost or Rs.2.5 Cr./MW (whichever is lower) for their project would be given preference & selected thereon.
RfS & GUIDELINES OF JNNSM Batch-I PHASE II :
- Last date and time of submission – 28/12/2013 at 10:30 Hrs.
- Bid Opening(Techno-Commercial) – 28/12/2013 at 12:30 Hrs
Qualification Criteria – Developers Net Worth :
The Net Worth required on Developers side should be minimum of Rs. 2 crores per MW upto 20 MW, additional Rs. 1 crore per MW above 20 MW.
The Company would be required to submit annual audited accounts for the last four financial years (or if the period of existence of the Company is less than four Years, then starting from the year of incorporation) viz. 2009-10, 2010-11, 2011-12 & 2012-13 indicating the year which should be considered for evaluation along with a net worth certificate from a Chartered Accountant to demonstrate fulfillment of the Criteria.
If the RfS is submitted by a Consortium the financial requirement to be met by each Member of the Consortium shall be computed in proportion to the equity commitment made by each of them in the Project Company
Developers Equity :
The developer has to put his own equity of at least Rs.1.5 Cr./MW.
Processing Fees :
A non-refundable processing fee of Rs. 1 Lakh for each Project upto 20 MW capacity and of Rs.2 Lakh for each project above 20 MW capacity would be applicable along with RfS submission.
The scheme will be implemented through the Solar Energy Corporation of India (SECI, a Section 25 company set up by the Ministry) in close association with NTPC Vidyut Vyapar Nigam Limited (NVVN). The power generated shall be purchased by SECI at a fixed levelised tariff of Rs.5.45 per kWh for 25 years and sold to willing State Utilities/ Discoms at a fixed tariff of Rs.5.50 per unit for 25 years.
The selection of projects would be done through a process of open competitive bidding for their VGF requirement in order to enable them to supply the solar power to SECI at the fixed tariff of Rs.5.45 per kWh & Rs. 4.75 per kWh (with AD benefit) for 25 years.
Project Size / Capacity :
Total allotment 750 MW – The project capacity shall be at least 10 MW and the maximum capacity of the Project shall be up to 50 MW. The capacity shall mean the AC output at the project bus bar located within project premises.
The total capacity of Solar PV Projects to be allocated to a Company including its Parent, Affiliate or Ultimate Parent-or any Group Company shall be limited to 100 MW.
Domestic Content Requirement (DCR) – Talk of the Town !
Out of the total capacity of 750 MW under Batch-I Phase-II, a capacity of 375 MW will be kept for bidding with Domestic Content Requirement (DCR). Under DCR, the solar cells and modules used in the power plant must both be made in India. The developers at the time of bidding may opt for either “DCR” or “Open” or both the categories. The Developers will submit separate Bids in case they wish to bid under both the categories.
Bank Guarantees :
Developer shall provide the following Bank Guarantees to SECI in a phased manner as follows:
- Earnest Money Deposit (EMD) of Rs. 10 Lakh/MW in the form of Bank Guarantee along with RfS.
- Performance Bank Guarantee of Rs. 20 Lakh/MW at the time of signing of PPA.
Financial Closure/ Project Financing Arrangements :
The Project Developer shall report tie-up of Financing Arrangements for the projects within 210 days from the date of signing Power Purchase Agreement.
Project Commissioning :
The selected projects shall be commissioned within 13 months of the date of signing of PPA.
Generation Criteria :
The developer will declare the CUF of their plant at the time of commissioning and will be allowed to revise the same once within 1 year of commissioning. The declared CUF shall in no case be less than 17% over a year.
The developer shall maintain generation within -15% and +10% of the declared value till the end of 10 years subject to the CUF remaining over minimum of 15% and within – 20% and +10% thereafter till the end of the PPA duration of 25 years. The CUF will be calculated every year from 1st April of the year to 31st March next year. However, for the purpose of release of VGF, CUF will be calculated every year from the date of commissioning up to completion of 1 year from the date of commissioning.
Shortfall or Excess of Generation :
In case the developer has not been able to generate minimum energy corresponding to the value of CUF below the lower limit of CUF declared by the developer, such shortfall in performance shall make developer liable to pay the compensation provided in the PSA as payable to Discoms and shall duly pay such compensation to SECI to enable SECI to remit the amount to Discoms. The amount of compensation shall be equal to the compensation payable (including RECs) by the Discoms towards non-meeting of RPOs, if such compensation is ordered by the State Commission.
Any excess generation over and above 10% of declared CUF will be purchased by SECI/ NVVN at a tariff of Rs.3/kWh provided SECI/ NVVN is able to get any buyer for sale of such excess generation.
Viability Gap Funding (VGF) Limit & disbursement :
30% of project cost or Rs. 2.5 crores per MW whichever is lower based on CERC estimates for project costs.
The VGF will be released in three tranches as follows:
- 50% on successful commissioning of the full capacity
Balance 50% progressively over next 5 years subject to plant meeting generation requirements (CUF within specified range) as under:
- Upon Commissioning (COD)– 50%;
- End of 1st Year from COD – 10%;
- End of 2nd Year from COD – 10%;
- End of 3rd Year from COD – 10%;
- End of 4th Year from COD – 10%;
- End of 5th Year from COD – 10%;
Project Implementation Schedule :
The official RfS for Selection of 750 MW Grid Connected Solar Power Projects Under Batch-I of JNNSM Phase-II can be downloaded @ Click Here
It would be really interesting to see the implementation of the new guidelines under JNNSM Phase II Batch-I.
Lets hope that the new guidelines for Batch-I projects under JNNSM Phase II would be more successful then that of Phase I. Soon we will see some more solar projects coming up !
Meanwhile till we meet next time….Cheers 🙂
Solar Project Consultant (India)
This Blog Post has been updated on October 12th & October 28, 2013