Union Cabinet approved the implementation of 15000 MW Grid-connected SPV Projects under NSM

The Union Cabinet on 25 February 2015 approved the implementation of the scheme for setting up of 15000 Mega Watt (MW) Grid-connected Solar Photo Voltaic (SPV) Power projects under the National Solar Mission (NSM).

The scheme will be implemented through National Thermal Power Corporation (NTPC) and NTPC Vidyut Vyapar Nigam Limited (VVNL) in three tranches. The three tranches are:
• Tranche 1: 3000 MW of SPV plants will be completed under mechanism of Bundling of solar power (3000 MW) with Unallocated Coal based Thermal Power (1500 MW) in the ration of 2:1.
• Tranche 2: 5000 MW will be completed with some support from Government to be decided after getting some experience while implementing Tranche-l.
• Tranche 3: remaining 7000 MW will be completed without any financial support from the Government.

Other Highlights of the Scheme
• The bundled power will be allotted to various States that come forward to
(i)    Provide land for setting up the solar power projects and
(ii)    Purchase a major portion of the bundled solar power for consumption within the State
(iii)    Ensure connectivity to the solar power project.
• The capacity allotted to each such State will be set up through developers, to be selected through international competitive bidding by NTPC /NVVN. Both private and government companies would be free to bid for projects.
• 1000 MW capacity out of the 3000 MW under the bundling scheme will be set up on land already identified in Andhra Pradesh. The balance 2000 MW capacity under the Bundling Scheme will be allotted in other interested States that come forward.
• A Payment Security Mechanism / Working Capital Fund with an estimated corpus of 2300 crore rupees to cover 3 months payment for bundled capacity of 3000 MW of Solar Capacity with 1500 MW NTPC Coal Power, will be set up to ensure bankability of PPAs and timely payment to developers.
• Some capacity of the total procurement under the scheme will be fixed for domestically manufactured solar cells as well as modules. The quantity to be fixed with Domestic Content Requirement (DCR) in each tender will be prescribed by Ministry of New and Renewable Energy (MNRE) based on the prevailing market conditions from time to time.

Completion of the projects under the Mission would accelerate the process of achieving grid tariff parity for solar power and will also help in reducing consumption of kerosene and diesel.

Other decisions of Union Cabinet
• The Cabinet also approved establishment of the New Development Bank for funding infrastructure and development projects  in the BRICS countries.
• It also cleared the BRICS Contingent Reserve Arrangement (CRA) which is meant to provide short-term liquidity support to the members in case of a Balance of Payments Crisis.