Harnessing Solar energy, Options for India

Solar project developers (SPDs) can enter into a power purchase agreement (PPA) with the National
Thermal Power Corporation’s (NTPC’s) subsidiary NTPC Vidyut Vyapar Nigam (NVVN), which has
been designated as the nodal agency. These PPAs will follow CERC-determined tariffs for a period of
twenty-five years. The Ministry of Power shall allocate equivalent megawatt capacity (not exceeding
1,000 MW for Phase 1, including capacity under migration guidelines) from the unallocated quota of
the central stations at a rate determined by the CERC. The power from the SPDs will be bundled with
this and sold to the distribution companies (DISCOMs at CERC-determined tariffs. This is referred to
as the Bundling Scheme in these guidelines. a In essence, this is analogous to a cross-subsidy
mechanism. This mechanism will hold for all solar plants set up before March 2013 and connected to
33 KV and over. Figure 5 is a schematic diagram of the operational framework of how a SPD will sign
a PPA and receive the tariff.
Ministry of
Power
Guidelines
on tariffs
CERC
Equivalent MW
capacity from
unallocated quota
NVVN
State Nodal
Agencies
Solar specific
RPO
SERC
Distribution
Utilities
Cost of
bundled
power
Bundled
power
Solar energy power
PPA
Solar Project
Developer
Access to sites
Water allocation
for solar thermal
projects
Land acquisition
Constructing
the transmission line
from power plant up to
132/33kv substation
State Transmission
Utility
Transmission
evacuation
agreement
Figure 5: Schematic of the Operational Framework
(Source: Compiled by authors)
a Guidelines for Selection of New Grid Connected Solar Power Projects, Jawaharlal Nehru National Solar
Mission.
India’s Solar-specific Policies CSTEP | Page 39