Clean Energy Fund may be used to subsidise solar mission projects

The ministry of new and renewable energy (MNRE) has proposed tapping into the Clean Energy Fund proceeds to subsidise the capacity addition envisaged in the second phase of the national solar mission.

The ministry has mooted the idea in view of the prevailing uncertainty about adequate availability of power from the Central government’s unallocated quota.

Sources said that the MNRE recently sent a proposal to this effect to the finance ministry, which is in charge of the fund. The MNRE has raised a requirement of R1,500-2,000 crore for meeting the viability gap funding requirement of the solar mission projects.

Against that, the money collected on account of the National Clean Energy Fund is estimated at over R5,000 crore. The government created the special fund in 2010 by levying a R50 per-tonne cess on coal. Annual collection in the fund should be in the range of R3,000-4,000 crore, according to industry estimates.

To support the first phase of the solar mission, the government had set aside 1,000-mw cheaper power from NTPC’s coal-fired plants for bundling with solar electricity.

The government has envisaged adding 9,000-mw capacity under the second phase of the the Jawaharlal Nehru National Solar Mission (JNNSM).

Of this, a 3,000-mw capacity will be developed through the MNRE and the balance by states.

Sources said the MNRE has proposed capacity addition of 2,200 mw through the viability gap funding route and 800 mw through bundling of unallocated power available from coal-fired and hydro-based power plants of the Central sector utilities such as NTPC and NHPC.

The total availability of electricity in the unallocated quota is about 5,000 mw. The Centre needs enough power at its disposal to mitigate emergency electricity requirements of states.

The government has already set aside 1,000-mw from NTPC’s generating stations for bundling with electricity from projects being developed under the first phase of the solar mission. Sources said the power ministry has yet to confirm electricity availability from the Centr?s unallocated pool for bundling with solar power from second phase solar projects.

The government has envisaged adding 20,000-mw capacity under the Jawaharlal Nehru National Solar Mission (JNNSM) in three phases by 2022.

Projects totaling 1,000 mw capacity have been auctioned by the MNRE for implementation in the first phase ( 2009-13).

The government is encouraged by the falling price of solar power equipment in the global market, which has helped discover competitive tariffs in the first phase of the JNNSM.