MNRE Reduces Tariff Ceiling from INR 3.5 to INR 2.8 For 12 GW Indian Solar Projects under CPSU Scheme

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The Ministry of New and Renewable Energy, Government Of India has announced on Monday about reduction in solar power tariff by 70 paise reduction, now the tariff has been reduced from Rs 3.5 per unit to Rs 2.8 per unit under the second phase of the Central Public Sector Undertaking (CPSU) program for development 12 GW of solar projects. 

The Ministry has also increased the timeframe for the implementation of these projects from 18 months to 24 months. Besides,now the Indian Renewable Energy Development Agency Limited (IREDA) would handle the scheme on behalf of the ministry instead of the Solar Energy Corporation of India Limited (SECI). IREDA will be entrusted with the task of conducting bidding amongst the government producers for allocation of solar power project capacity under the scheme with viability gap funding (VGF) amount as a bid parameter to select project proponents.

The office order stated that the usage charge would not be more than Rs 2.8 per unit, which shall be exclusive to any other third party charges like wheeling and transmission charges and losses, point of connections charges and losses, cross-subsidy surcharge, state load dispatch center/regional load dispatch center charges, etc as may be applicable. With regard to this notice, now every bidder would have to bid below Rs 2.8 per unit for this scheme. 

The projects with up to 500 MW capacity would now be commissioned within 24 months from date of the letter of award and for projects of more than 500 MW capacity, the project capacity up to 500 MW would also be commissioned within 24 months from the date of the letter of award and balance capacity to be commissioned in next six months. Earlier, the timeframe was 18 months for commissioning the projects from the date of the letter of award.

In addition, IREDA can also allot/sanction solar projects of up to 50 MW to any government entity at the L-1 rate (lowest tariff bid) discovered in the most recent auction within four months of such last bidding.

Ministry of New & Renewable Energy (MNRE) on 20.03.2020 has issued the circular on-time extension in the scheduled commissioning date of RE projects considering disruption of the supply chains due to the spread of coronavirus in China or any other country as a force majeure event. The circular stated that Ministry of Finance has clarified that the disruption of the supply chains due to spread of coronavirus in China or any other country should be considered as a case of natural calamity and Force Majeure Clause (FMC) may be invoked, wherever considered appropriate, following the due procedure. 

Recently, The Ministry of New and Renewable Energy (MNRE) has extended the deadlines for the approved list of models and manufacturers (ALMM) by the next 6 months to provide aid to the renewable energy firms from considering disruption of the sector due to the spread of coronavirus pandemic. The list includes solar photovoltaic (PV) modules and solar PV cells. The last date for enlistment for both ALMM List-I and ALMM List-II is extended from March 31, 2020, to September 30, 2020. 

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