Lok Sabha Question No. 1839 (UNSTARRED), answered on 2019-11-28
Subject: Solar Projects
Ministry: NEW AND RENEWABLE ENERGY
Asked by: Jyotsna Charandas Mahant, Gurjeet Singh Aujla

## GOVERNMENT OF INDIA MINISTRY OF NEW AND RENEWABLE ENERGY

## LOKSABHA

## UNSTARRED QUESTION NO 1839

TO BE ANSWERED ON 28/11/2019

## SOLAR PROJECTS

## 1839. SHRIMATI JYOTSNA CHARANDAS MAHANT SHRI GURJEET SINGH AUJLA

Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:

- (a) whether the Government is considering norms to attract investors to set up solar projects;
- (b) if so, the details thereof;
- (c) whether it is a fact that various solar tenders have remained undersubscribed due to rigid policies of the Government; and

(d) if so, the steps taken by the (Government to ease norms for establishing solar projects in the country?

## ANSWER

THE MINISTER OF STATE (I/C) FOR NEW & RENEWABLE ENERGY,  POWER and MoS for  SKILL DEVELOPMENT AND ENTREPRENEURSHIP

(SHRI R. K. SINGH)

- (a) & (b) The steps taken by the Government to attract investors to set up solar projects inter alia, include the following:
- (i) Announcement  of  a  target  of  installing  175  GW  of  renewable  energy  capacity  by December, 2022.
- (ii) Waiver of Inter State Transmission System (ISTS) charges and losses for inter-state sale of solar and wind power for projects to be commissioned up to December, 2022.
- (iii) Permitting  Foreign  Direct  Investment  (FDI)  up  to  100  percent  under  the  automatic route.
- (iv) Notification  of  standard  bidding  guidelines  to  enable  distribution  licensee  to  procure solar and wind power at competitive rates in cost effective and transparent manner.
- (v) Declaration of trajectory for Renewable Purchase Obligation (RPO) up to year 2022.
- (vi) Implementation of Green Energy Corridor project to facilitate grid interaction of large scale renewable energy capacity addition.
- (vii) Notification of standard for deployment of solar photovoltaic system/devices.

(viii) Launch of New scheme for farmers, CPSU Scheme Phase II and Solar Rooftop Phase II program.

(c)  The  participation  of  bidders  in  tenders  for  solar  power  projects  has  over  the  time  been very encouraging with some tenders attracting bids of more than ten times the capacity to be allotted. However, in past few months, some solar tenders, have remained undersubscribed, which may be due to various reasons like delays in payments by distribution companies in some  States,  delays  in  adoption  of  tariffs  by  concerned  State  Electricity  Regulatory Commissions, and reopening of contracts by State Government of Andhra Pradesh, etc.

(d)  In  order  to  address  the  issues  of  delayed  payments  by  distribution  companies  to  solar power generators, the Government through Ministry of Power's Order No. 23/22/2019-R&R dated 28.06.2019 has made it mandatory for the Distribution Licensees to open and maintain adequate  Letters  of  Credit  (LCs)  as  Payment  Security  Mechanism  under  Power  Purchase Agreements by Distribution Licensees.

Further,  in  order  to  strengthen  the  contractual  provisions  in  the  Contract  (Power  Purchase Agreement) between the solar power generators and the Procurers, and to facilitate setting up of solar power projects, the Government, vide notification dated 22.10.2019 of the Ministry of New & Renewable Energy, has made following major amendments to the 'Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects:

(i)  Solar  Power  Generators  have  been  allowed  to  submit  documents/Lease  Agreement  to establish possession/right to use 100% (hundred per cent) of the required land in the name of the Solar Power Generator for a period not less than the complete term of the PPA, on or before the Scheduled Commissioning Date (SCD).

(ii) Clear and elaborate provisions for time extension and compensation to affected party in the event of natural and non-Natural Force Majeure events with specific provisions regarding termination due to natural and non-natural Force Majeure events have been included.

(iii) Quantum of Compensation for back-down has been increased from 50 % to 100% with provision  for  recognition  of  only  written  instructions  of  back-down  and  payment  of  backdown compensation.

(iv)  Deemed  adoption  of  Tariff  by  Appropriate  Electricity  Regulatory  Commission,  if  the same does not decide upon it within sixty days of application.

(v) Corresponding Time Extension in date for achievement of financial closure and scheduled commissioning date, in case there is a delay in adoption of tariff by the concerned Electricity Regulatory Commission beyond a period of 60 days from the filing of such application.

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