MNRE finally releases the final guidelines for the next phase of 750 MW, click here for the entire document and some important excerpts below
RFS_Documents For Selection of SPD under JNNSM Phase II Batch I
Domestic Content Requirement
Out of the total capacity of 750 MW under Batch-I Phase-II, a capacity of 375 MW will be kept for bidding with Domestic Content Requirement (DCR). Under DCR, the solar cells and modules used in the solar PV power plants must both be made in India. The Developers at the time of bidding may opt for either “DCR” or “Open” or both the categories. The Developers will submit separate Bids in case they wish to bid under both the categories. Each Bid/ Application can be for a maximum of five projects at different locations with aggregate capacity not exceeding 100 MW as mentioned under Clause 2.4.
Mechanism of Viability Gap Funding
The mechanism of operation of Viability Gap Funding is enumerated below:
1) The tariff to be paid to the developer is fixed at Rs.5.45 per kWh. This tariff will remain firm for 25 years project period. In case benefit of accelerated depreciation is availed for a project, the tariff will get reduced to Rs.4.75 per kWh.
2) The developer will be provided a viability gap fund based on his bid. The upper limit for VGF is 30% of the project cost or Rs.2.5 Cr./MW, whichever is lower. The developer will be required to indicate his preliminary estimate of project cost as per format in Annexure-A. The project cost will be as per developer’s own estimation & declaration at the time of bidding, which will be finally confirmed by his own declaration at the time of financial closure and will be considered for provision of VGF as per the above specified upper limit.
3) The developer has to put his own equity of at least Rs.1.5 Cr./MW.
4) The remaining amount can be raised as loan from any source by the developer.
5) The VGF when paid by the SECI may be used to return part of the loan or developer contribution (in excess of Rs.1.5 Cr./MW) or a combination thereof as the case may be, in case investments have already been made. SECI will issue a letter confirming sanction/ grant of VGF so that bidder is able to achieve financial closure for full amount if required at the time of signing of Power Purchase Agreement (PPA).
6) The VGF will be released in six tranches as follows:
– 50% on successful commissioning of the full capacity of the project (COD);
– Balance 50% progressively over next 5 years subject to the project meeting generation requirements (CUF within specified range as per Clause 2.13.1) as
under:
| § | End of 1st Year from COD | – 10% |
| § | End of 2nd Year from COD | – 10% |
| § | End of 3rd Year from COD | – 10% |
| § | End of 4th Year from COD | – 10% |
| § | End of 5th Year from COD | – 10% |
7) If the project fails to generate any power continuously for any 1 year within 25 years or its major assets (components) are sold or the project is dismantled during this tenure, SECI will have a right to refund of VGF on pro-rata basis and if not paid by the developer then a claim on assets equal to the value of VGF released, on pro-rata basis as specified hereunder:
Year of default S E CI’s right t o refund of VGF/ clai m on a sset s
(From COD) (% of VGF paid) Up to 5 years : 100%
5-6 year : 90%
6-7 year : 80%
7-8 year : 70%
8-9 year : 60%
9-10 year : 50%
10-11 year : 40%
11-12 year : 30%
12-13 year : 25%
13-14 year : 23%
14-15 year : 21%
15-16 year : 19%
16-17 year : 17%
17-18 year : 15%
18-19 year : 13%
19-20 year : 11%
20-21 year : 9%
21-22 year : 7%
22-23 year : 5%
23-24 year : 3%
24-25 year : 1%
8) If the project is transferred or sold to a third party during its tenure (after initial lock-in period of 1 year as per provision under Clause 2.10, SECI will retain full rights to operationalize the PPA with the third party, which will be under full obligation to honour all the obligations and terms & conditions of the PPA.
9) Solar Power Developers (SPDs) and SECI shall enter into suitable VGF Securitization Agreement creating a charge over the Project assets in favour of SECI as specified under sub-clause (7) above along with signing of PPA.
10) In case of projects financed through loan, the charge created on the project assets shall be shared with the Lending Institutions.
11) In case the lending institution exercises its right to step in or take over the project, SECI will also have right to step in along with the lending institution to reclaim VGF in accordance with sub-clause (7) above or handover the project to another party for operation.
Total Capacity and Portfolio of Solar PV Technology Projects
1.4.1 The total aggregated capacity of the grid connected solar power projects to be set up by Solar Power Developers on Build-Own-Operate (BOO) basis under Viability Gap Funding scheme in Phase-II Batch-I of JNNSM shall be 750 MW. The projects to be selected under this scheme provide for deployment of Solar PV Technology. However, the selection of projects would be technology agnostic and crystalline silicon or thin film or CPV, with or without trackers can be installed.
1.4.2 Already commissioned projects cannot be considered under this scheme. Projects under construction or projects which are not yet commissioned will, however, be considered, in case these projects are not already accepted under any other Central or State Schemes.
Capacity of each Project
As mentioned under clause 1.4 and 2.6(C) of these guidelines, the Solar PV power projects are required to be designed for inter-connection with transmission network of STU/ CTU at voltage level of 33 kV or above. Given this requirement, the project capacity shall be at least 10 MW and in multiples thereof and the maximum capacity of the Project shall be up to 50 MW. The capacity shall mean the AC output at the project bus bar located within project premises.
Number of Applications by a Company and Capacity limit
The total capacity of Solar PV Projects to be allocated to a Company including its Parent, Affiliate or Ultimate Parent-or any Group Company shall be limited to 100 MW, out of the total capacity of 750 MW to be added under batch-I Phase-II. The Company, including its Parent, Affiliate or Ultimate Parent-or any Group Company may submit application for a maximum of five projects at different locations subject to a maximum aggregate capacity of 100 MW. However, bids under 2 separate categories can be submitted as per provision under Clause 2.6(E). The Company, including its Parent, Affiliate or Ultimate Parent-or any Group Company shall submit one single application in the prescribed format detailing all projects at multiple locations for which the developer is submitting the application.
Net Worth:
The Net Worth of the company should be equal to or greater than the value calculated at the rate of Rs. 2 crore or equivalent US$ per MW of the project capacity up to 20 MW. For every MW additional capacity beyond 20 MW, additional net worth of Rs. 1 crore would need to be demonstrated. The computation of Net Worth shall be based on unconsolidated audited annual accounts of the company. The Company would be required to submit annual audited accounts for the last four financial years (or if the period of existence of the Company is less than four Years, then starting from the year of incorporation) viz., 2009-10, 2010-11, 2011-12 & 2012-13 indicating the year which should be considered for evaluation along with a net worth certificate from a Chartered Accountant to demonstrate fulfilment of the Criteria. However, for new as well as existing Companies, the Net Worth criteria can also be met as on day not more than seven days prior to the date of submission of RfS by the Company.
To demonstrate fulfilment of this criteria, the Company shall submit a certificate from a Chartered Accountant certifying the availability of Net Worth on the date not more than seven days prior to submission of RfS along with a Certified copy of Balance Sheet, Profit & Loss Account, Schedules and cash flow statement supported with bank statement. {Note: For the Qualification Requirements, if data is provided by the Project Developer in foreign currency, equivalent rupees of Net Worth will be calculated using bills selling exchange rates (card rate) USD / INR of State Bank of India prevailing on the date of closing of the accounts for the respective financial year as certified by the Project Developer’s banker.
Technical Criteria
Under the VGF scheme for Batch-I Phase II of JNNSM, it is proposed to promote only commercially established and operational technologies to minimize the technology risk and to achieve timely and successful commissioning of the Projects. The detailed technical parameters for Solar PV Projects are at Annexure-B.
Implementation Arrangement
2.8.1 The scheme will be implemented through SECI in close association with NTPC Vidyut Vyapar Nigam Limited (NVVN). SECI shall issue the Request for Selection (RfS) inviting developers to submit the bids quoting their VGF requirement for setting up the Solar PV Power projects at locations of their choice, evaluate the bids received, issue Letter of Intent (LoI) to successful bidders and sign Power Purchase Agreements (PPAs) with them for purchase of the solar power, valid for a period of 25 years. The solar power purchased by SECI shall be sold to State Utilities/ Discoms/ other Bulk Consumers at a fixed tariff of Rs.5.50/kWh (Rs.4.75/kWh in case of projects availing benefit of accelerated depreciation) for 25 years (including Trading Margin of SECI @ 5 paisa/kWh). SECI shall accordingly also sign back-to-back Power Sale Agreements (PSAs) with interested State Utilities/ DISCOMs for sale of solar power to them, which shall also be valid for a period of 25 years. SECI will also hold responsibility for subsequent activities related to projects commissioning and performance monitoring & reporting on regular basis during the tenure of the projects. SECI will carry out these activities in association and close coordination with the NVVN. NVVN will also be entrusted to undertake the trading of the solar power from the projects in the initial phase till SECI is fully equipped to undertake the trading activity.
2.8.2 Prior to issuance of RfS, MNRE/SECI shall obtain confirmation from the State Utilities/ DISCOMs/ other Bulk Consumers regarding their willingness to purchase the solar power under VGF scheme @ Rs.5.50/kWh and to sign the PSAs with SECI.
2.8.3 Within 30 days of the date of issue of LoI, the PPAs between SECI and the solar power developers for purchase of power from their projects will be executed. During this period, back-to-back PSAs will also be executed by SECI with the interested State Utilities/DISCOMs/ other Bulk Consumers for sale of solar power to them.
2.8.4 In case of any delay in SECI equipping itself fully to undertake the trading activity, NVVN will undertake the same on behalf of SECI.
Minimum Equity to be held by Project Promoter
2.10.1 The Company developing the project shall provide complete information in their bid against RfS about the Promoters and their shareholding in the company indicating the controlling shareholding.
2.10.2 No change in the shareholding in the Company developing the Project shall be permitted from the date of submitting the RfS till the execution of the PPA. However, this condition will not be applicable if a listed company is developing the Project.
2.10.3 After execution of PPA, the controlling shareholding (controlling shareholding shall mean more than 50% of the voting rights and paid-up share capital (including fully, compulsory and mandatory convertible Preference shares/Debentures) in the Company/Consortium developing the project shall be maintained for a period of (1) one year after commencement of supply of power. Thereafter, any change can be undertaken under intimation to SECI.
Financial Closure/ Project Financing Arrangements
2.11.1 The Project Developer shall report tie-up of Financing Arrangements for the projects within 210 days from the date of signing Power Purchase Agreement. At this stage, the Project Developer would furnish within the aforesaid period the necessary documents to establish that the required land for project development is in clear possession of the Project Developer (minimum 1.5 ha per MW) and the requisite technical criterion have been fulfilled. The Project Developer would also need to specify their plan for meeting the requirement for domestic content.
2.11.2 In case of delay in achieving above conditions as may be applicable, SECI shall en- cash performance Bank Guarantees and shall remove the project from the list of the selected projects.
Commissioning
2.12.1 Part Commissioning:
Part commissioning of the Project shall be accepted by SECI subject to the condition that
the minimum capacity for acceptance of part commissioning shall be 10 MW and in multiples thereof. The PPA will remain in force for a period of 25 years from the date of acceptance of respective part commissioning of the project.
Commissioning Schedule and Penalty for Delay in Commissioning:
The selected projects shall be commissioned within 13 months of the date of signing of PPA. In this regard, a duly constituted Committee will physically inspect and certify successful commissioning of the project. In case of failure to achieve this milestone, SECI shall en-cash the Performance Bank Guarantee (BG) in the following manner:
a. Delay up to one month – 20% of the total Performance BG on per day basis and proportionate to the Capacity not commissioned in lots of 10 MW each.
b. Delay of more than one month and up to three months – SECI will encash remaining Performance BG on per day basis and proportionate to the Capacity not commissioned in lots of 10 MW each.
c. In case the commissioning of the project is delayed 3 months, the pre-fixed levelized tariff of Rs.5.45/kWh (Rs.4.75/kWh in case of projects availing benefit of accelerated depreciation) shall be reduced at the rate of 0.50 paise/kWh per day of delay for the delay in such remaining capacity which is not commissioned. The maximum time period allowed for commissioning of the full Project Capacity with encashment of Performance Bank Guarantee and reduction in the fixed tariff shall be limited to 24 months from the date of signing of PPA. In case, the Commissioning of the Project is delayed beyond 24 months from the date of signing of PPA, the PPA capacity shall stand reduced / amended to the Project Capacity Commissioned and the PPA for the balance Capacity will stand terminated and shall be reduced from the selected Project Capacity.
The funds generated from the encashment of the Bank Guarantees shall be deposited in a separate fund under payment security mechanism to be maintained by SECI under the guidance of MNRE. The decision regarding usage of this fund shall be communicated by MNRE to SECI separately
Electricity Generation from Solar PV Power Projects
2.13.1 Criteria for generation:
The developers will declare the CUF of their plant at the time of commissioning and will be allowed to revise the same once within 1 year of commissioning. The declared CUF shall in no case be less than 17% over a year. They shall maintain generation so as to achieve CUF* within -15% and +10% of their declared value till the end of 10 years from COD subject to the CUF remaining over minimum of 15% and within – 20% and +10% thereafter till the end of the PPA duration of 25 years. The lower limit will, however, be relaxable by SECI to the extent of grid non-availability for evacuation which is beyond the control of the developer. The CUF will be calculated every year from 1st April of the year to 31st March next year. However, for the purpose of release of VGF, CUF will be calculated every year from the date of commissioning up to completion of 1 year from the date of commissioning. The upper limit will not be applicable for the purpose of payment of VGF.
* For example, if the declared CUF is 20%, variation allowed will be in the range of 17% to 22% only.
2.13.2 Shortfall in minimum generation
If for any Contract Year, it is found that the developer has not been able to generate minimum energy corresponding to the value of CUF below the lower limit of CUF declared by the developer, such shortfall in performance shall make developer liable to pay the compensation provided in the PSA as payable to Discoms and shall duly pay such compensation to SECI to enable SECI to remit the amount to Discoms. This will, however, be relaxable by SECI to the extent of grid non-availability for evacuation which is beyond the control of the developer. This compensation shall be applied to the amount of shortfall in generation during the Contract Year. The amount of compensation shall be equal to the compensation payable (including RECs) by the Discoms towards non-meeting of RPOs, if such compensation is ordered by the State Commission. However, this compensation shall not be applicable in events of Force Majeure identified under PPA with SECI/ NVVN affecting supply of solar power by SPD.
2.13.3 Excess generation:
Any excess generation over and above 10% of declared CUF will be purchased by SECI/ NVVN at a tariff of Rs.3/kWh, provided SECI/ NVVN is able to get any buyer for sale of such excess generation. While the developer would be free to install DC solar field as per his design of required output, including his requirement of auxiliary consumption, he will not be allowed to sell any excess power to any other entity other than SECI (unless refused by SECI). In case at any point of time, the peak of capacity reached is higher than the rated capacity and causes disturbance in the system at the point where power is injected, the developer will have to forego the excess generation and reduce the output to the rated capacity.
Projects Implementation Schedule
Implementation of the Solar PV Projects shall be carried out according to the timeline given below:
| Sl. No. | Event | Date |
| 1. | Approval of RfS Document by SECI Board | Zero date |
| 2. | Issue of Request for Selection (RfS) Document (Sale of Documents) | Within 7 days from Zero date |
| 3. | Submission of Bids(Techno-Commercial & Financial)
and Opening of Techno-Commercial Bids |
Within 60 days from Issue of RfS. |
| 4. | Evaluation of Techno-Commercial Bids and Short-listing of Bidders | Within 60 days from submission of Bids |
| 5. | Opening of Financial BidsIssue of Letter of Intent (LoIs) | Within 7 days from Shortlisting ofBidders
Over a period of 15 days after opening of Financial Bids |
| 6. | PPA Signing | Within 30 days from the date of issue of Letter of Intent |
| 7. | Financing Arrangement | Within 210 days from the date of signing of PPA |
| 8. | Commissioning of Projects | Within 13 months from the date of signing of PPA |
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