MNRE: Office Memorandum modifying the Scheme for ‘Development of Solar Parks and Ultra Mega Solar Power Projects’

Ministry of New and Renewable Energy has issued an Office Memorandum modifying the Scheme for ‘Development of Solar Parks and Ultra Mega Solar Power Projects’.

So far there are 7 modes under which the Scheme is implemented. A new mode, Mode-8 namely Ultra Mega Renewable Energy Power Parks (UMREPPs) has been introduced with the following features:

1. Solar Power Park Developer (SPPD): The SPPD of the UMREPP may be CPSU/State PSU/ State Government Organisation or their subsidiaries. A JV between two or more of the above entities may also act as the SPPD.

2. Role of State Government:

(a) State Government (through any State Government Organisation) is required to provide necessary assistance to the SPPDs in identification and acquisition of land for setting up of UMREPPs and also facilitate all required statutory clearances. However, the land will be allotted with a condition that development must be completed within 2 years (extendable by 1 year in extreme cases) failing which the State Government may take back the allotted land in consultation with MNRE.
(b) A committee must be set up to facilitate setting up of the UMREPP, monitor the progress and also fix the one-time upfront charges and annual Operation & Maintenance charges, etc. to be charged from power developers.
(c) The UMREPPs shall not be taken as profit making activities and maximum 16% return on equity may be allowed.
(d) A facilitation charge of Rs. 0.05/unit of power generated may be paid to the State Government (or the organisation designated by the state government). It may be noted that such charge may be paid only on the quantum of power exported outside the state and only if no other similar charge is levied under the State Government Policy.

3. The SPPD will be entitled to following compensations for development and management of UMREPPs:
(a) Central Financial Assistance (CFA) of Rs. 20 lakh/MW or 30% of cost of development of UMREPPs, whichever is lower, for development of internal infrastructure including cost of transmission to the CTU/STU point. Any augmentation/ strengthening and/or erection of external power evacuation infrastructure may be done by CTU.
(b) If the SPPD or any of its individual promoters has a trading license, he may act as a trader of power being produced in the park, for which he will be entitled to claim a margin of Rs. 0.07/unit.
(c) This compensation may not be provided to RE projects to be developed under EPC mode where the cost of power would already have a factor of Return on Equity.
(d) For calling of bids for UMREPPs, Standard Bidding Guidelines must be followed.

4. Power Projects inside UMREPPs:

(a) The power projects inside UMREPPs may be developed either under developer mode through Tariff Based competitive Bidding (TBCB) process or under EPC mode or any combination thereof. However, the SPPD or any of its individual promoters cannot take part in tariff based competitive bidding process in an UMREPP developed by them.
(b) Facilitation charge and trading margin may be made clear in the bid document.
(c) The CPSUs are free to set up RE projects in EPC mode, under the Central Schemes like CPSU Scheme, in any of the UMREPPs.

All other terms will be as per the Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects issued by the Ministry order no 30/26/2014-15/NSM dated March 21, 2017 and its subsequent modifications.