The concept of solar parks has emerged as a powerful tool for the rapid development of solar power projects under the National Solar Mission (NSM) of India. Assured availability of land and transmission infrastructure are the major benefits of a solar park. The recent downward trends in solar tariff may be attributed to the factors, such as economies of scale, assured availability of land and power evacuation systems under solar park. The Solar Park Scheme aims to provide a huge impetus to solar energy generation by acting as a flagship demonstration facility to encourage project developers and investors, prompting additional projects of similar nature, triggering economies of scale for cost-reductions, technical improvements, and achieving large-scale reductions in greenhouse gas (GHG) emissions. It enables States to bring in significant investment from project developers, meet the solar renewable purchase obligation (RPO) mandate and provide employment opportunities to the local population.

With this background, the scheme for the development of Solar Parks and UltraMega Solar Projects was introduced in December 2014 by the Ministry of New & Renewable Energy (MNRE), Government of India. It was planned to set up at least 25 solar parks, each with a capacity of 500 MW and above, thereby targeting around 20,000 MW of solar power installed capacity; in a span of 5 years commencing from 2014–15. Smaller parks are also allowed in Himalayan region and other hilly States where contiguous land is difficult to acquire in view of difficult terrain and in States where there is acute shortage of non-agricultural land.

To meet the demand for more solar parks from States, the capacity of the solar park scheme was enhanced from 20,000 MW to 40,000 MW in March 2017 with the aim to set up at least 50 solar parks by 2019–20. However, the time for solar parks has been extended from 2019–20 to 2021–22 as the availability of clear land and power evacuation are the two most critical elements for successful achievement of the target.

MODE FOR SELECTION OF SPPDs

Initially, there are 4 modes for selection of the Solar Power Park Developers (SPPDs). However, in order to bring more transparency, in selection of private entrepreneurs, CPSUs, such as SECI, NTPC, etc., the existing selection mode has been modified and some new modes have been introduced for the development of solar parks.

Mode-1 The State designated nodal agency or a State Government Public Sector Undertaking (PSU) or a Special Purpose Vehicle (SPV) of the State Government

Mode-2 A Joint Venture Company of State designated nodal agency and Solar Energy Corporation of India Ltd (SECI)

Mode-3 The State designates SECI as the nodal agency

Mode-4 Private entrepreneurs with equity participation from the State Government or its agencies based on open transparence bidding process

Mode-5 By Central Public Sector Undertakings (CPSUs), such as SECI, NTPC etc., in own or leased land

Mode-6 Private entrepreneurs without any Central Financial Assistance from MNRE

Mode-7 Solar Energy Corporation of India (SECI) acts as the Solar Power Park Developer (SPPD) for Renewable Energy Parks

Under Mode 1 to Mode 6, the SPPD is tasked with acquiring the land for the park, cleaning it, leveling it, and allocating the plots for individual projects. Apart from this, the SPPD are also entrusted with providing the necessary facilities like approved land for installation of solar projects and required permissions including change of land use, etc.; road connectivity to each plot of land; water availability for construction as well as running of power plants; flood mitigation measures like flood discharge, internal drainage, etc.; power during construction; centralized weather monitoring station; telecommunication facilities; power evacuation facility consisting of pooling stations to allow connection of individual solar projects with pooling station through a network of underground/over ground cables or overhead lines; housing facility for basic manpower wherever possible; parking, warehouse, etc.

-Land and power evacuation are the two most critical elements for the successful achievement of this target. If these two inputs are facilitated by the Government, then the private developers would be enthused to participate in establishment of RE projects in the country.

-Recognizing this critical factor, the Ministry constituted five teams for detailed planning of identified solar and wind zones. Accordingly, different teams visited the renewable rich states, such as Andhra Pradesh, Gujarat, Madhya Pradesh, Karnataka, Rajasthan, Tamil Nadu, and Telangana. The teams have identified potential sites for development of renewable energy projects in the above states and identified around 995,000 acres of land in Andhra Pradesh, Karnataka, Madhya Pradesh, Tamil Nadu, Rajasthan, and Gujarat. In the first phase of this, it is planned that about 25% of the identified land in Gujarat, Madhya Pradesh, and Rajasthan and about 30% of the identified land in Andhra Pradesh, Karnataka, and Tamil Nadu can be targeted, totalling 257,000 acres which can act as a land bank for hosting around 50,000 MW capacity of Solar/Wind/Hybrid/Other RE power parks. However, based on the actual availability, the extent of land to be covered in any state would be finalized by the implementing agency, i.e., SECI.

Based on that, a new mode (Mode 7) under the existing Solar Park Scheme has been introduced for development of Renewable Energy (RE) Parks (Solar or Wind or Hybrid or other RE parks) through SECI.

Under Mode 7 (Renewable Energy Park), SECI acts as SPPD for Renewable Energy (RE) Parks (Solar or Wind or Hybrid or other RE parks) and all the above tasks would be done by the Solar Project Developers (SPDs). States have to offer and facilitate acquisition of land to SECI for development of these RE parks. The salient features of Mode 7 are as follows:

-With assistance of the State Government, SECI will make both government and private land available to be used by successful bidder for setting up RE power projects. The State Government providing such facilitation for land identification and making its right of use available to SECI would be paid a facilitation charge of `0.02/unit of power being generated in these parks. This facilitation charge would be paid by the RE project developers for setting up projects in these lands, in addition to any land cost in terms of outright sale or lease rent. No funds from CFA will be used for procurement of land.

-SECI will get the external power evacuation infrastructure of the parks developed by External Transmission Development Agency (ETDA) such as CTU, STU as the case may be. However, the internal infrastructures of the RE park like internal power evacuation system, road, water, levelling of land, fencing, telecommunication, and other facilities as mentioned in the Solar Park Scheme and also battery storage if required would be done by the RE Project Developers (REPDs) at its own cost and would be factored in the tariff to be bid by the REPD. The REPD will not be provided with any CFA for development of internal infrastructures of the RE park. However, the essential components of internal infrastructure which need to be put in place by the RE project developers may be indicated separately by the RE project developers and the same may be eligible for availing line of credit if the financial institution has separate product to fund the RE parks.

-Under the existing Solar Park Scheme, there is a provision of providing CFA of `20 lakh per MW or 30% of the project cost whichever is less for setting up of both internal infrastructure and external power evacuation infrastructure. Now the CFA will be utilized for development of external power evacuation infrastructure. Since `20 lakh per MW provided under Solar Park Scheme may not be enough to set up transmission system, an additional mechanism has been decided.

-The total cost of any transmission network for any parcel of land would be divided by the total capacity of RE projects planned to be set up on that land parcel and utilizing the said transmission capacity to get the per MW cost.

-Forty per cent of the cost of transmission system, subject to a minimum of `10 lakh per MW (or the total cost if it is less than `10 lakh per MW) and a maximum of `30 lakh per MW would be borne by the RE project developers. The successful RE project developers selected through competitive bidding process shall be charged as upfront charges and collected by SECI. SECI will make this amount available to the ETDA for putting up the external transmission system.

-The balance CFA @`20 lakh/MW or 30% of the total cost for development of external power evacuation system, whichever is less, [provided that the total of second and third points above does not exceed the total cost for development of external power evacuation system] to the ETDA for putting up the external transmission network.

– Remaining cost, if any, shall be socialized as is done presently for RE projects.

-Further, to make the setting of RE projects in such parks, a Payment Security Mechanism will be set up to ensure continuous payment to the power developers and mitigate any payment risk due to default in payment by the DISCOMs in any month. This will be in the form of a common dedicated Payment Security Fund (PSF) for all projects in the RE parks created under the scheme. This PSF would be build up over time by SECI by levying a charge of `0.02/unit from the RE project developers setting up projects in these RE parks.

-The facilitation charges of `0.02/ unit to the State Governments, the share of cost of transmission system and Payment Security Fund charges of `0.02/unit from the RE project developers would be included by SECI while calling bids for selection of RE project developers.

PROGRESS AND STATUS

-Year-wise Cumulative Capacity of RE in the last 10 years

-Growth of Solar Capacity

Solar energy has a significant potential as a future energy source but equally important, it also has the advantage of enabling the decentralization distribution of electrical energy thereby empowering people at grassroots level. Prior to the launch of the NSM, only 11 MW of solar capacity had been installed. However, after the launch of the NSM and other State policies encouraging solar energy generation, the solar capacity has grown at a rapid pace. In the last ten years, the installed cumulative capacity of solar projects has increased from 2.82 MW in 2008–09 to 28,180 MW in 2018–19.

PRESENT STSTUS OF SOLAR PARKS IN INDIA

As in March 2019, 42 solar parks with cumulative capacity of 23,449 MW have been approved in 17 States. These solar parks are in different stages of development. Land of around 139,115 acres has been identified and 76,436 acres of land has been acquired in various solar parks. Hundred per cent land has been acquired for 15 solar parks, less than 100% but more than 90% for 6 solar parks and for balance land under acquisition. Tenders have been issued for 13,245 MW out of which power purchase agreements (PPAs) have been signed for around 9,145 MW of solar projects inside various solar parks; out of which 5,835 MW of have been commissioned.

The recent downward trends in solar tariff may be attributed to the factors, such as economies of scale, assured availability of land, and power evacuation systems under the solar parks. In the several solar parks, the tariff arrived is at a lowest level and have continuously decreased from `6.16/kWh to `2.44/kWh in solar parks. It has been achieved by using better tools for solar projects and by enhancing the interest of bidder.

Challenges and the Way Forward

-Clear land allotment by the State Government

-The willingness of DISCOMs to purchase the solar power from the solar parks

-Matching the timelines between the development of solar parks including power evacuation arrangements of central transmission utility (CTU) or State Transmission Utilities (STU) and setting up of solar projects

-Levy of transmission charges for delay in commissioning

-Submission of Bank Guarantee (BG) by private SPPDs to SECI equivalent the amount of CFA to be released against each milestone.In order to address the two most critical elements such as land and power evacuation infrastructure for solar parks, a new mode (Mode 7) has been introduced for development of Renewable Energy Parks by SECI. However, the availability of identified land is much larger than the subsidy amount available, proper selection method should be in place to identify projects for which the `20 lakh/MW CFA would be available.

Mr Radhey Shyam Meena, Mr Dilip Nigam, Mr Anindya S Parira, and Mr Sunil Kr Gupta, National Solar Mission Division, Ministry of New and Renewable Energy (MNRE), New Delhi, India. Email for correspondence: rshyam.mnre@ gov.in