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Govt planning mega renewable energy projects like UMPPs
The government is planning large renewable energy projects like the coal-based ultra-mega power project s (UMPPs) through the publicprivate-partnership route. The renewable power projects may include any renewable source of generation or a combination of them. The plants are likely to be 1,800 MW in capacity, which can be spread over three areas of 600 MW each, and the power purchase agreements (PPAs) will be for 25 years, a senior government official said. Industry insiders, however, are skeptical about the idea of such ultra-mega renewable power projects as recent auctions of solar power contracts received tepid response. A tender by the Solar Energy Corporation of India (SECI) for 1,200 MW solar power purchase received bids from SoftBank-backed SB Energy and Chennai-based GRT Jewellers. Though SECI guarantees payments, the tariff ceiling is fixed at Rs 2.65 per unit. An NTPC tender for 1200 MW, too, received poor response, forcing the company to extend the deadline. The power tariff renegotiation bid by Andhra Pradesh has left investors nervous about taking up the otherwise lucrative projects. The government is planning to allocate the responsibility of site identification to all central public sector undertakings (CPSUs) in the energy space, including NTPC Ltd, SECI, Power Finance Corp and NHPC Ltd. Each CPSU may be given charge of two-three states. They will float joint ventures with the state governments and set up special purpose vehicles (SPVs). The states will help the SPVs secure land and regulatory clearances. The Centre is working on two-three models for sharing of profit between the CPSUs and the states. The states will receive 2 paise per unit for 25 years as yearly income on generation. The actual installations on these sites will be done by private developers to be selected by the SPVs through tariff-based competitive bidding. Govt planning mega renewable energy projects like UMPPs A major relief to the renewable projects would be that the connecting power transmission line will be treated as national asset, relieving it from any pangs in clearances. India aims for 175-GW green power capacity by 2022. As on June 30, the capacity stood at 80 GW of the total installed generation capacity of 350 GW. Solar stands at 30 GW and wind at 36 GW in this pie. Coal-based UMPPs are large projects of 4,000 MW at one location that are identified and bid out by the government in the PPP mode. Of the dozen UMPPs planned, the government auctioned four such plants and only two are operating. The Budget 2015-16 had announced plans to set up five UMPPs — requiring investments of about Rs 1 lakh crore — through the plug-and-play model, whereby unencumbered possession of land, all clearances and linkages would be in place before the projects are awarded through auction. The plan was thereafter put on the backburner for revision of documents and due to lack of interest in coal-fired greenfield projects.