Sluggish capacity addition: Power Ministry tightens solar project timelineshttps://indianexpress.com/article/business/sluggish-capacity-addition-power-ministry-tightens-solar-project-timelines-5532797/

Sluggish capacity addition: Power Ministry tightens solar project timelines

In its latest amendments to the guidelines for tariff-based competitive bidding of solar projects, the government lowered the time periods available to developers for submitting bids, making financial arrangements and setting up solar projects.

business news, solar energy, Power Ministry, solar projects, Indian express
According to the new amendments, solar developers would get 15 months to commission the plants after signing power purchase agreements (PPAs), if they are being built inside solar parks.

With frequent bid cancellations threatening to upset the solar capacity addition target, the Power Ministry has tightened the timelines for developers setting up solar projects.

In its latest amendments to the guidelines for tariff-based competitive bidding of solar projects, the government lowered the time periods available to developers for submitting bids, making financial arrangements and setting up solar projects.

According to the new amendments, solar developers would get 15 months to commission the plants after signing power purchase agreements (PPAs), if they are being built inside solar parks. Plants outside solar parks would have 18 months to be set up. The earlier timelines allowed in the original bidding guidelines charted in 2017 were 21 months for solar park projects and 24 months for plants elsewhere.

Additionally, the amended guideline says that developers with projects inside solar parks would have to finalise their funding arrangements within nine months of signing PPAs. For projects outside solar parks, the statutory timeline for financial closure has been kept as 12 months, unchanged from the tenure prescribed in the original guideline.

The minimum timeline for developers to submit their bids after the request for selection (RfS) are issued have been reduced to 22 days—eight days shorter than the duration allowed in the earlier directive. Also, the normative timeline for the completion of the bidding process has been brought down by 10 days to 110 days from RfS issuance.

Advertising

Against the FY19 target of 10,000 MW for ground mounted solar capacity addition, the country has only added a little over 3,270 MW in the first nine months of the fiscal. The missing of FY19 targets may have further ramifications on the 100 GW solar target set for 2022, warranting expedition of the whole process. About 4,000 MW of solar auctions had to be scrapped in the ongoing fiscal due to issues such as higher tariff discoveries and lack of clarity on safeguard duty impact. According to renewable research agency Bridge to India, another 15,234 MW of auctioned solar capacity is under development. —FE