. /.  WORLD TRADE  
ORGANIZATION   
G/TRIMS/W/112 
5 October 2012 
 (12-5393) 
Committee on Trade-Related Investment Measures Original:   English 
  
 
INDIA – MANDATORY LOCAL CONTENT REQUIREMENTS IN PROJECT 
GUIDELINES FOR PHASE I (BATCH 1 AND BATCH 2) OF THE  
JAWAHARLAL NEHRU NATIONAL SOLAR MISSION 
 
Replies to Follow-Up Questions from the UNITED STATES
1 
   The following communication, dated 1 October 2012, is being circulated at the request of the Delegation of India.  
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Question 1 
  India's reply indicates that NTPC Vidyut Vyapar Nigam Ltd.'s (NVVN)'s procurement 
is undertaken pursuant to "directions/guidelines " prepared by the Ministry.  Could India 
please provide Members a copy of those "directio ns/guidelines" or the Internet address where 
they can be found?   Please explain how the price is calculated or determined for solar power bundled with 
other (non-solar based) power and sold to di stribution companies ("discoms").  When the 
discoms sell that power to end-users, how is the sale price calculated or determined? 
 
Reply 
  The internet address where the guidelines are available is http://www.mnre.gov.in.  
 
 The Jawaharlal Nehru National Solar Mission (J NNSM) is one of the initiatives of India's 
National Climate Change Action Plan. One of it s  key objectives is to promote ecologically 
sustainable growth through use of renewable energy.  It seeks to achieve this  by ensuring availability 
of solar power through the process of 'bundling' so lar power procured through the process of bidding, 
with an equivalent quantity of thermal power allocated to it by the Ministry of Power.  The price of 
the bundled power is determined on a monthly basis by calculating the average price of the components of the bundle (solar and thermal).  Di scoms sell it to their consumers at the price 
determined by the relevant electricity regulatory commission.   Question 2   Please explain in greater detail the relationship between the CERC-determined tariff and the "project specific tariff" determined th rough the JNNSM bidding process.  What is the 
basis for the CERC's calculation of its generic tari ff?  What sales of solar power are made at the 
                                                      
1 G/TRIMS/W/106.   G/TRIMS/W/112 
Page 2  
 
  CERC-determined generic tariff?  Is NVVN's purchase price for solar power under the JNNSM 
always based on the project-specific tariff?   Do the tariffs of State Electricity Regu latory Commissions govern projects located in 
those states even if they are JNNSM projects, or do those Commissions govern only projects 
under State solar programs?  If the former, what  is the relevance of CERC-determined tariffs 
vis-à-vis  the tariffs set by the State Commissions? 
 
Reply 
 
 Tariff for sale of electricity is determined  by the regulators (CERCs and SERCs) under the 
Electricity Act.  CERC determines the generic ta riff based on the total cost incurred in producing 
power, fixed return on equity, and other factors as pr ovided under its regulations.  At this stage, the 
quantum of solar power sold at the CERC dete rmined generic tariff is not available.  
 
 With regard to projects under JNNSM, project specific tariff is determined on the basis of 
maximum discount given by the bidders on the CERC determined generic tariff.  Power purchased by 
NVVN under the JNNSM is at the price as determin ed in this manner through the open competitive 
bidding process, and SERCs do not ha ve a role in this regard.  
  
 
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