In November 2018, the Ministry of New and Renewable Energy had launched a plan to implement 23 GW of ultra-mega solar projects in the Leh and Ladakh regions of Jammu & Kashmir. The Phase-I of the project would entail setting up 2,500 MW solar PV capacity in Kargil region and 5,000 MW in Leh district. This will be India’s largest tender so far in terms of capacity.
To discuss the implementation of the projects and clarify the developers’ issues, a meeting was held recently in the presence of representatives from SECI, Leh and Kargil administration officials and other relevant stakeholders including solar developers. The meeting was chaired by the additional secretary of the Ministry of New and Renewable Energy.
The discussion was largely focused on land, transmission infrastructure, logistics, and capacity utilization factor. Here is a quick recap of the important points discussed in the meeting:
Solar developers participating in the discussion wanted to know if there are any land lease escalation rates as no rates have been provided in the RfP. The representative present in the meeting informed developers that the land escalation rate is five percent. However, they would need to confirm it with the concerned authorities.
Some of the developers deliberated that the solar power project in Leh that also entails the deployment of storage technologies requires more land area. According to the present RfS, only 5 acres per MW is mentioned.
SECI officials informed that they had studied the land requirement in Bhadla and Anantapur solar parks and had given them 4 acres/MW. However, in this case, they assured the developers that demand for additional land will not be an issue.
The total capacity of 7,500 MW has been divided into three packages of 2,500 MW each. While package A will be set up in the areas tentatively identified in Zanskar sub-division and Tai Suru block of Kargil district, packages B and C will be developed at Hanley Khaldo area of Nyoma sub-division in the Leh district.
The solar developers asked if the land area for each package is clearly demarcated and if it can be shared with the developers. In response, the officials from Leh administration informed them that land has been identified for each package and demarcated details of the land can be provided to them.
Recently, Leh and Kargil were connected to the national electricity grid. The developers wanted to know if any study had been conducted for the transmission corridor and their feasibility concerning solar power projects.
To this, SECI replied that such a feasibility study for the transmission corridor is the responsibility of developers.
Along with it, the developers will also have to get the permits from defense and/or forest departments for the transmission routing. At the same time, they assured that SECI and Leh administration will provide the needed help.
Transmission infrastructure cost will be huge in this area which will have an additional capital expenditure (CAPEX) of more than ₹30 million (~$0.42 million)/MW above solar CAPEX. Consequently, the tariff is also expected to be very high. With this in mind, the developers raised a pertinent question asking if SECI has an in-principle agreement with DISCOMs for the offtake of this power.
In reply, SECI said that they have discussed with various developers before issuing the RfP and based on the discussions, the current bid structure will result in competitive tariff. However, there is no ceiling tariff for these projects.
In the matter of CUF, the developers contended that CUF of 30 percent is not possible and it is too optimistic in Leh and Kargil considering the thermal coefficient. In J&K area, the same modules will perform better so overloading cannot be the same as in Rajasthan.
They also gave an example of the operational NHPC solar project of 75 kW, which witnessed 280 sunny days in a year. If we consider this, then 30 percent CUF is not feasible.
SECI officials disagreed with the developers asserting that CUF of 30 percent is possible and agreed to share the analysis on the feasibility of 30 percent CUF.
Some of the developers also raised the concern of site accessibility and whether large containers can be transported to the location. The representatives from Leh administration assured that the site has good connectivity through the year.
On the question of safeguard duty, the developers requested SECI to incorporate the relief for carrying the cost of increased CAPEX due to change in law as the project duration is of four years.
SECI said that PPA will have the safeguard duty clause as per standard bidding document.
Solar developers also requested to reconsider the net-worth as there are only 2-3 companies who have requisite net worth to participate in the bid. SECI officials said that they would deliberate and get back to them in this matter.