India Solar Policy Update

There have been a slew of official and unofficial solar policy announcements coming out of India recently. Though most of these are still preliminary, the new announcements by the NDA administration can be categorized into three separate programs. Below is a quick summary based on our talks with government officials involved in policy making -

1. JNNSM

Goal – to install 20 GW by 2022 (2.8 GW achieved so far)

A revised draft for JNSSM Phase II, Batch 2 is scheduled to be announced by the end of October, following cabinet approval. As we noted in our previous update, the new government wanted a larger solar program and has been working on a draft for 3000 MW, effectively doubling the capacity compared to their first announcement. The guidelines for the 3000 MW Batch 2 projects are expected to be released in two to three weeks and the bidding process is tentatively scheduled to be announced anytime between year-end and March 2015.

An important distinction in this Batch is that these projects will be part of ‘solar parks’ (a large area designated for solar projects) that will be set up by individual States. These projects will not all be announced at one time. The first solar park for 1,000 MW (could be announced in blocks of 250 MW or 500 MW based on infrastructure availability) is expected to be set up in Andhra Pradesh. Through creation of solar parks, the government is trying to address the land acquisition problem, by having the states provide the land.

The bidding process for these projects will be handled by NVVN. The remaining 2,000 MW will most likely come up in other states which have shown interest in setting up solar parks, such as Telangana, Gujarat, Madhya Pradesh or Karnataka. The bidding timeline for the additional 2,000 MW will be determined at a later date.

2.  Solar Projects by Public Sector Units

Goal:  Not yet established

MNRE is asking the Public Sector Units (PSUs) to set up solar projects to compensate for CO2 emissions. Under this scheme the National Thermal Power Corporation (NTPC) is expected to announce 3,300 MW in solar projects of which the first 1,000 MW will also be in Andhra Pradesh which is bundled with allocated thermal power and will have the DCR mandate. NTPC has already invited bids for 250 MW solar projects in the Anantpur district of Andhra Pradesh. The location of the other 2,300 MW is not yet finalized. Coal India is the other PSU which may be coming out with similar announcements.

 3.  Ultra-Mega Solar PV Projects

 Goal: 20 GW

On September 8, the Ministry of New and Renewable Energy (MNRE) announced a draft for a new program aimed at developing ultra-mega solar PV projects totaling 20 GW through the establishment of solar parks (not to be confused with JNNSM Batch 2).

The MNRE, through this scheme, plans to set up 25 solar projects, each with a capacity of 500 to 1,000 MW. The ‘solar parks’ are expected to be established in about five years. Once the solar parks are established, the solar projects will be developed as demand and interest is shown by developers. The objective at the state level is to bring in significant investments from developers, meet Renewable Purchase Obligation (RPO) mandates and provide employment opportunities to local populations. Details of this draft policy has been covered in our September 15, 2014 Solar Market Intelligence Report.

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