Solar energy action in India just got more exciting. The federal government of India announced the largest of its National Solar Mission (NSM) programmes to date — 15,000 MW over the next five years.
In this phase of the NSM, part 1 of tranche 1 will consist of 1,000 MW. The government will buy power from a maximum of 20 developers, and each project size is limited to 50 MW. Each developer can bid for up to five projects with a total of 250 MW.
The latest initiative has the following key takeaways:
- Economies of scale will bring down the cost of solar power in India
- Smaller players faced with financial challenges will be phased out
- Large international developers and investors will enter India’s solar power sector
The first tranche will consist of projects available at a single solar power park. They will be developed by a joint venture of different federal and state governments in the Kurnool district of Andhra Pradesh state. However, the draft guidelines issued by the Ministry of New And Renewable Energy (MNRE) are a little confusing. On one hand, it implies that transmission facilities are to be arranged by the developers themselves. On the other, it says the projects must be constructed at the specified park. The park concept is not complete, especially if the developers have to arrange the transmission facilities independently for each project. Nevertheless, it does reduce the risks associated with project development in India considerably.
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