Welspun Energy Jodhpur Solar Project 50MW

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In December 2011, Welspun Energy Limited (WEL), energy subsidiary of Welspun Group, was awarded the license for setting up a 50MW grid connected solar Photo voltaic power project located near Phalodi, in Jodhpur District of Rajasthan under the Jawaharlal Nehru Solar Mission (JNNSM) Phase-I Batch-II of the scheme. These were 3 separate projects in the same area of 15MW, 15MW and 20MW. Under the JNNSM the total aggregated capacity of grid connected Solar Projects in Phase-1 was expected to be 1000 MW. The deployment of Solar PV and Solar Thermal projects would be in the ratio of 50:50. 150MW aggregate has already been allotted in FY2010-11 as a part of Batch-I of JNNSM Phase-I, and allotment for the remaining 350 MW Solar PV Projects was carried out through the second batch. WEL had acquired land for the project. The output from the project would be fed to the northern grid of India. Meeco India Private Limited (subsidiary of Meeco Group of Switzerland) would execute the EPC work. WEL had taken the approval from Powergrid for interconnection with the nearest substation of Powergrid at the volatage level of 33kV or above. The JNNSM mission had designated NTPC’s Vidyut Vyapar Nigam Limited (NVVN) as the nodal agency for procurement of solar power. In October 2011, NVVN invited RFQs from interested developers to develop 350 MW solar PV projects with a capacity of 5 MW each, with a minimum capacity of 5 MW and maximum of 50 MW each. NVVN received 210 RFQ responses on 17th November 2011 from PV solar project developers. As the total capacity of the shortlisted projects were in excess of the approved capacity of 350 MW Solar PV Projects, bidders were required to submit proposals offering maximum discount on the CERC (Central Regulator) approved applicable tariff for grid connected solar power projects for FY 2011-12 - a reverse bidding auction process. The last date for the submission of proposal was December 2011. NVVN received 180 bids from project developers indicating discounts offered by each over CERC determined tariff of US$ 0.329/kWh (INR 15.39/kWh @46.67 INR/USD). The winning bids for solar PV under Batch-II of JNNSM Phase-I varied from INR 7.49/kWh to INR 9.41/kWh, at an average bid price of INR 12.15/kWh. Since the target allocation for solar thermal projects was 350 MW, only the top 20 discounts were finally selected to set up solar power projects. WEL won three projects quoting a tariff of US$ 0.174/KwH (15MW), US$ 0.172/kWh (15MW), and US$ 0.170/kWh (20MW) (INR 8.14/kWh for 15MW capacity, INR 8.05/kWh for 15MW capacity, and INR 7.97/kWh for 20MW capacity). On 27th January 2012, WEL had entered into a 25-year Power Purchase Agreement with NTPC Vidyut Vyapar Nigam (NVVN), which was the the nodal agency to purchase solar power generated by independent solar power producers,under JNNSM. JNNSM provided for a scheme of "bundling" relatively expensive solar power with cheaper power from the unallocated quota of the Government of India out of the capacity of the NTPC based coal stations.This cheaper bundled power would then be sold to state power distribution companies at the CERC regulated price. This would bring down the gap between the average cost of power and sales price of power of the state Discom. The total capacity of 5MW was also eligible for carbon credits. PTPL would pass on the gross benefits of CDM to the distribution licensee (NVVN) in the following manner - (a) 100% of the gross proceeds to be retained by PTPL in the 1st year after the date of COD, (b) in the 2nd year, the share of NVVN would be 10% which would be progressively increased by 10% every year till it reaches 50%, where after the proceeds would be shared equally by PTPL and NVVN. Transmission and/or wheeling charges would be paid by WEL. Financial closure took place in September 2012.The total project cost was estimated (based on a Welspun project at Madhya Pradesh) at US$ 90mn (INR 4809.6mn @53.44 INR/USD).The debt equity ratio for the project wa