MNRE allows solar developers to install higher capacity than contracted

It aims to cut down occurrences of unregulated installations.

Upon receiving notices from solar developers regarding the adopted practice of installing additional DC capacity above contracted AC capacity, the Ministry of New and Renewable Energy (MNRE) in India has taken action and reiterates appropriate conditions for setting contracted capacity in Power Purchase Agreements (PPAs) and Power Supply Agreements (PSAs).

The activity of adding DC capacity instalments birth out of parties’ aim to meet the committed capacity utilisation factor (CUF) in PPAs and PSAs, and it is found that such actions are serving developers additional revenue.

MNRE has stated in a memo that PPAs stand to facilitate the agreement between the solar developers and the procurer in terms of AC capacity, and range of energy supply based on CUF, with the procurement obligation set within such range.

As the procurer invites bids for setting up the solar PV power plant of a solar capacity (MW), the successful bidder on signing the PPA becomes the "Contracted Capacity", the capacity (MW) in AC terms allocated for supply by that bidder.

The PPA will also provide for a range of energy supply based on CUF. While the procurer is not obligated to buy energy beyond this range, the developer will be liable for penal charges for supply of energy less than the minimum committed CUF.

It is also noted that the requirement of installing additional DC panels may emanate from the contractual need to supply the committed energy and does not cast any obligation on the procurer to buy generation in excess of the contracted energy range.

The procurer, without getting involved in the design and installation of solar capacity on the DC side, should ensure that the AC capacity of the solar PV power plant set up by the developer corresponds with the contracted AC capacity and that at no point may the power (MW) scheduled from the solar PV power plant be in excess of the contracted AC capacity.