Rajasthan re-releases its request for selection of solar projects: 200MW of FiT based projects
Ratnottama Sengupta covers policies as a consultant in the Market Intelligence team at BRIDGE TO INDIA.
The Indian solar market again has immediate opportunities to set up projects under a feed-in-tariff based state policy. The Rajasthan Renewable Energy Corporation Limited (RRECL) has reopened its request for selection (RfS) for a 100MW of solar photovoltaic (PV) projects and 100MW of concentrated solar power (CSP) projects under the Rajasthan Solar Policy. These projects will be allotted through a process of competitive bidding. The winning bidder will be one who offers the highest discount upon the RRECL’s benchmark solar tariff of INR 8.42 (EUR 0.13)/KWh. A feed-in-tariff will be paid to the winning bidder for 25 years.
- The PPA under the Rajasthan Solar Policy will be signed between the Project developer and the State nodal agency, RRECL
- 200MW of PV and CSP projects
- First FiT based projects since February 2012
The RRECL had indefinitely postponed its RfS for these projects which was originally scheduled for March 19th 2012. BRIDGE TO INDIA in its July 2012 edition of the INDIA SOLAR COMPASS had reasoned that this was probably due to the losses faced by the state DISCOMS, which were collectively the highest loss making utilities in the country in 2011, with a negative net internal revenue of INR 112.1 billion (EUR 1,724 m). This might have translated to a weak Power Purchase Agreement (PPA) between the project developer and one of the state DISCOMS.
The new RfS has included a mechanism through which the state DISCOMS do not have any direct liability to make payments to the project developer. The project developer with a winning bid will be signing a PPA with not a state DISCOM but with the RRECL, who will also be providing the payment security to the developer. The RRECL in turn will supply the procured solar power to the state DISCOMS through a Power Sale Agreement (PSA). However even though the state DISCOMS have been removed from the equation as far as payments are concerned the RfS does not mention if the RRECL has a payment security scheme (PSS) in place. Without an existent PSS projects developers still cannot be sure if their payments will be met on time.
This opportunity for FiT based solar projects comes after a long dry spell. The last such project was allocated by Odisha in February 2012. 200MW of project allocations is a promising start to 2013 and will prove to be a new lease of life for the Indian solar industry.
Read more on policies in our recently updated INDIA SOLAR HANDBOOK – November 2012 edition.
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