State power companies invited to develop 5 GW of solar

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The Indian Renewable Energy Development Agency has invited bids from state-run power companies to set up 5 GW of grid-connected solar project generation capacity under the third tranche of phase II of the Central Public Sector Undertaking (CPSU) scheme.

The solar projects will be developed on a build, own, operate basis, using Indian-made cells and modules. They can be developed anywhere in the nation and can be ground-mounted; floating—including on canals; rooftop arrays; or any combination thereof.

The power generated by the projects will be either for self-consumption or use by government entities. The solar electricity will be supplied either directly or via power distribution companies, on payment of mutually agreed usage charges of not more than INR2.20/kWh, plus any third-party charges.

Viability gap funding

Projects are eligible for viability gap funding (VGF)—to help them become commercially viable—under the CPSU program, up to a maximum INR70 lakh/MW. The actual level of VGF funding awarded will be determined through reverse bidding auctions by project developers.

Half the VGF support will be paid upon award of each engineering, procurement and construction (EPC) contract, including to in-house EPCs, with the balance released upon projects being commissioned.

The minimum amount of generation capacity developers can bid for is 1 MW and there is no upper limit other than the total 5 GW figure.

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