MNRE Amendment_ Solar Projects Under State Specific Bundling Program

The Ministry of New and Renewable Energy (MNRE) has amended the guidelines for the state specific bundling program under which 3,000 MW of grid-connected solar photovoltaic (PV) projects are to be developed.

According to Mercom India Research, NTPC has auctioned a total of 3,000 MW of solar under NSM Phase-II, Batch 2. PPA’s have been signed for 2,750 MW except for the 250 MW Kadapa Solar Park project in Telangana.

In its amendment, the MNRE stated, “From now on, the sale of power from a solar PV project developed in one state (host state) under the state specific bundling program to another state is allowed if the host state (state in which the project is located) has no objection.”

An MNRE official told Mercom, “We noticed that in some states there is not enough need for new solar generating projects as these states have power to fulfil demand and this is creating an issue.” “But, states have provided approval to develop solar projects under the state specific bundling program. This amendment will allow all work to progress smoothly as there will be no concern regarding off-taker for these projects. Now, they can sell power to other states,” added the MNRE official.

Mercom previously reported that the National Thermal Power Corporation (NTPC) is on the lookout for an off-taker to procure solar power from the 250 MW Kadapa Solar Park in Andhra Pradesh.

The NTPC had tendered 250 MW of solar at Kadapa under the state specific bundling program, which Solairedirect won by quoting ₹3.15 (~$0.0487)/kWh, which was the lowest tariff at that time. Due to surplus power in the state, Andhra Pradesh State Power Distribution Company (APSPDCL) refused to sign a power purchase agreement (PPA) with NTPC at ₹3.15 (~$0.0487)/kWh.

This is a good move by the MNRE. In the past few months, solar tenders have gradually declined. Now, one bottleneck has been removed. In India, the solar potential is distributed unevenly, and this amendment will help states that do not have the required land or irradiation to develop high-performing solar projects. Now, they will have the ability to purchase cheaper solar power from another state.

However, selling solar power across states will cost more and will require regulatory approvals. The Central Electricity Regulatory Commission (CERC) recently released draft regulations (not final) for granting Inter-State Transmission Connectivity to solar and wind projects according to which a 100 MW project a project would be charged ₹400,000 (~$6,097) for connectivity and grid network access. The ability for developers to sell solar power across states is an important development.

Image credit: Mercom India