The Ministry of New and Renewable Energy (MNRE) has extended the commissioning timelines for solar projects to be developed under Tranche III of the Central Public Sector Undertaking (CPSU) programme (Phase-II) by 6 months, that is, from the existing 24 months to 30 months. In addition, the MNRE has also increased the timeline for engineering, procurement, and construction of solar projects under Tranche I and Tranche II by 6 months, that is from the existing 6 months to 12 months. The commissioning timelines are calculated after the letter of award of the project.
In May 2021, the MNRE has issued amendments to the CPSU Scheme (Phase-II) for setting up 12,000 MW grid-connected solar power projects with viability gap funding (VGF) support. These projects would be set up by government producers for self-use or use by government entities, either directly or through distribution companies. As per the amendments, the power produced by these projects can be used on payment of mutually agreed usage charges of not more than Rs 2.45 per unit, instead of the earlier Rs 2.80 per unit. This shall be exclusive of any other third-party charges like wheeling and transmission charges and losses, point of connection charges and losses, cross-subsidy surcharge, State Load Despatch Centre or Regional Load Despatch Centre charges.
To cover the cost difference between the domestically produced solar cells and modules and imported solar cells and modules, VGF shall be provided under the scheme. While the maximum permissible VGF has been kept at Rs 5.5 million per MW, the actual VGF to be given to a government producer under the scheme would be decided through bidding using VGF amount as a bid parameter to select project proponent. The maximum permissible VGF was earlier Rs 7 million per MW. The maximum permissible VGF amount will also be reviewed from time to time by the MNRE, and will be reduced if the cost difference comes down. VGF will be released in two tranches. 50 per cent of the VGF will be released on award of contract to the EPC contractor, while the remaining 50 per cent on successful commissioning of the full capacity of the project.