The Ministry of New and Renewable Energy (MNRE) has issued a notification regarding the modalities and role of distribution companies (DISCOMs) to ensure the smooth implementation of the second phase of the Central Public Sector Undertaking (CPSU) program. This government program aims to set up 12,000 MW of grid-connected solar photovoltaic (PV) power projects for self-use or use by government entities.

As reported previously by Mercom, the second phase of this program received the President’s approval in March 2019. According to a previous notification by the government, the implementation of this program is expected to create an investment of ₹480 billion (~$6.70 billion) and provide direct employment to 60,000 people for about one year in pre-commissioning phase and 18,000 people for the next 25 years during the operation and maintenance period.

In three consecutive financial years (FYs) including the current one, a total of 12 GW of solar PV projects is expected to be tendered under the CPSU program Phase-II. According to the ministry, 4 GW will be tendered in FY 2019-2020, followed by another 4 GW in FY 2020-2021 and then in 2021-2022.

All the projects are expected to be developed by the end of FY 2022-2023. Under the CPSU program, the usage charges should not exceed ₹3.50 (~$0.050)/kWh and will be exclusive of any other third-party charge such as wheeling, transmission, and the likes.

The Solar Energy Corporation of India (SECI) is the implementing agency of this program, and the maximum viability gap funding (VGF) allowed under this has been set at ₹7 million (~$101,654)/MW. Moreover, all the solar cells and modules utilized in setting up of solar PV projects under this program must be domestically manufactured.

The MNRE has stated that DISCOMs will facilitate open access to government producers intending to use solar power generated by themselves through open access. The power produced can be utilized for supply to other government bodies or non-commercial sectors (where power is not sold) like agriculture, and local urban bodies.

If they consider it fit, the DISCOMs can also bring in the CAPEX amount upfront, and set up the solar PV projects on their own or through engineering procurement construction (EPC) contractors.

So far, SECI has tendered 2 GW of solar PV under Phase-II of the CPSU program. Even the National Thermal Power Corporation Limited (NTPC) is on the lookout for EPC contractors to set up 1 GW of grid-connected solar PV projects under Phase-II Tranche-I of the CPSU program.

Image credit: Tata Power