The Indian solar segment has grown significantly in the past few years, evolving from a small-scale off-grid power market to one with several utility-scale projects and off-grid solar photovoltaic (PV) systems. As of April 2016, India’s installed grid-connected solar power capacity touched nearly 7,000 MW, up from just about 10 MW as of March 2010. The Jawaharlal Nehru National Solar Mission (JNNSM) has primarily driven this capacity addition.
The JNNSM was launched on January 11, 2010 with the objective of achieving solar grid parity by 2022 and reducing the cost of solar generation through long-term policy, large-scale deployment, aggressive research and development, and domestic production of critical raw materials, components and products. To this end, the government had set a target for the deployment of grid-connected solar power capacity of 20,000 MW by 2022. This was to be implemented under three phases: 1,000 MW in the first phase up to 2012-13, 9,000 MW in the second phase from 2013 to 2017, and 10,000 MW in the third phase from 2017 to 2022. The programme also aimed to achieve 20 million square metres of solar thermal collector area and deploy 20 million solar lighting systems in rural areas by 2022.
However, in June 2015, the government scaled up the solar power capacity target under the JNNSM by five times, to reach 100,000 MW by 2022. The revised target comprises 40 GW through rooftop systems and 60 GW through large- and medium-scale grid-connected solar power projects. In line with these new targets, the Ministry of New and Renewable Energy (MNRE) along with NTPC Limited and the Solar Energy Corporation of India (SECI) has taken various initiatives to promote bulk capacity allocations under various batches of JNNSM Phase II. While a number of allocations have been made, some are under way and the remaining are in the pipeline.
Power Line takes a look at the key achievements and developments under the programme…
Phase I of the JNNSM envisaged an equal share of solar power through the PV and solar thermal routes. Against a target of 1,000 MW, 970 MW capacity was allocated through two rounds of bidding conducted in 2010-11 and 2011-12, via the tariff-based reverse bidding process. Besides, 84 MW of capacity was allocated under the Migration Scheme. A total capacity of 718 MW was commissioned under Phase I. While the commissioning of solar PV projects was by and large successful, the same was not the case with solar thermal. Although the targets under Phase I may not have been met in entirety, most of the objectives were achieved. The phase witnessed a substantial reduction in solar tariffs, set the ball rolling for solar development at the state level, and successfully demonstrated technology choices. Phase I was mainly implemented by NTPC Vidyut Vyapar Nigam Limited (NVVN), a wholly owned subsidiary of NTPC.
In the initial years of Phase II, progress was fairly slow and disappointing due to several reasons. The loopholes of Phase I remained unattended, leading to the slow execution of Phase II. These include international disputes related to anti-dumping duty, delays in fund allocation by the Ministry of Finance, delays in thermal power allocation and complex tendering procedures. However, with the commissioning of projects under Batch I and allocation of projects and tenders under Batch II, Phase II has now started firming up. Under Phase II, the government has launched various schemes to incentivise the installation of solar projects by central PSUs, central government organisations and defence establishments.
Under Phase II, the MNRE has initiated Batch I, Batch II (Tranche I), Batch III, Batch IV and Batch V so far. In March 2015, a scheme was approved under the JNNSM for setting up 15,000 MW of grid-connected solar PV plants through NTPC/NVVN over a period of five years (2014-15 to 2018-19). The scheme aims to develop this capacity in three tranches: 3,000 MW under Tranche I (2014-15 to 2016-17), 5,000 MW under Tranche II (2015-16 to 2017-18) and 7,000 MW under Tranche III (2016-17 to 2018-19). Tranche I is based on the bundling mechanism and comes under Batch II of Phase II. It is a state-specific bundling scheme where projects are being selected based on the lowest quoted levellised tariffs.
Under Phase II Batch III, grid-connected solar power capacity of 2,000 MW is being set up through SECI with viability gap funding (VGF) support from the National Clean Energy Fund. This capacity is envisaged to be set up in solar parks of various states, to be developed through the coordinated efforts of central and state agencies. The VGF support is estimated to be worth Rs 21 billion and will be confirmed once the bids invited by SECI are opened.
JNNSM Phase II Batch IV involves the setting up of over 5,000 MW of grid-connected solar PV projects through VGF and was approved in January 2016. This is a state-specific VGF-based scheme. The capacity will come up in four tranches of 1,250 MW each over four financial years: 2015-16, 2016-17, 2017-18 and 2018-19. The scheme will entail a total investment of about Rs 300 billion.
Broadly, JNNSM Batch II, Batch III and Batch IV are state-specific schemes and a large proportion of capacity addition under these batches is being envisaged through solar parks. This move is likely to address several issues related to land, evacuation, infrastructure, clearances, etc. This, in turn, will accelerate project implementation.
JNNSM Phase II Batch V involves the setting up of 1,000 MW of grid-connected solar PV projects by central PSUs and central government organisations (like NTPC, NHPC, Coal India Limited, the Indian Renewable Energy Development Agency, Indian Railways, etc.) under various central/state schemes for self-use and third-party sale or merchant sale with VGF support. The capacity will be set up over three years from 2014-15 to 2016-17. It is mandatory for all solar projects under the scheme to procure cells and modules from domestic manufacturers.
Apart from this, the MNRE has notified a scheme for setting up over 300 MW of grid-connected and off-grid solar PV projects under the Ministry of Defence and paramilitary forces (under the Ministry of Home Affairs) with VGF under JNNSM Phase II/III.
The MNRE has rolled out a scheme to set up solar parks, with a targeted capacity addition of around 20,000 MW. It had notified guidelines for the development of solar parks in February 2016 under the JNNSM. These solar parks will be set up over a span of five years (from 2014-15 to 2019-20). Solar projects may come up as per the interest shown by developers. As a result of the notification, the MNRE has also received interest and consent from various states including Gujarat, Andhra Pradesh, Uttar Pradesh, Rajasthan, Madhya Pradesh, Karnataka, Telangana, Tamil Nadu, Himachal Pradesh and Maharashtra for setting up solar parks and ultra mega solar power projects. In fact, 33 solar parks have already been identified under the scheme, across 21 states, with an aggregate capacity of 19,900 MW.
In sum, progress under the JNNSM has been in line with the government’s targets and long-term vision. The programme has received proactive support from the states. Various states including Chhattisgarh, Gujarat, Rajasthan, Tamil Nadu, Karnataka and Uttar Pradesh have notified their state-specific solar policies. Going forward, project allocation should continue in a timely and seamless manner for the successful implementation of the programme.