A crucial leg of the National Solar Mission was recently cleared by the Indian government which would allow 15 GW capacity to be auctioned over the next few years.
The Indian government gave approval to auction 15 GW solar power capacity under the National Solar Mission that will come up across various states of the country. The entire auction under the programme will be divided into 3 tranches of 3 GW, 5 GW and, 7 GW.
The auction will be organised by a power trading arm of the country’s largest power generation company, NTPC Limited. The power trading arm will procure electricity from the solar power projects and, in turn, supply this solar power bundled with coal-based power to various utilities across the country.
The first part of the 3 GW tranche is expected to be auctioned soon. This will cover 1 GW of capacity to be commissioned in the southern state of Andhra Pradesh. The balance capacity will be auctioned in the states that offer to provide land for the projects.
The first tranche of 3 GW capacity will get financial support in capital investment. This support will be provided through competitive auction. The second tranche of 5 GW will also get some form of financial support, however, the final tranche of 7 GW will not receive any financial support and will be completely subsidy-free.
This 15 GW capacity is only a small part of the near 100 GW solar power capacity addition target set for 2022. The balance capacity will be added through public sector companies and private companies that have committed to develop several dozen gigawatts capacity over the 5-7 years.