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MNRE announces new Guidelines for Implementation of CPSU Scheme Phase-II

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Centre tightens solar VGF rules for PSUsThe Ministry of New and Renewable Energy (MNRE) has released new guidelines for implementation of Central Public Sector Undertaking (CPSU) Scheme Phase-II (Government Producer Scheme).  It has revised the Maximum Tariff & reduced the Maximum Permissible Viability Gap Funding (VGF) under the scheme.

  • The scheme aims to set up 12, 000 MW grid-connected Solar PV power projects which will be produced by Government Producers.

New Changes

  • Revised Maximum Tariff (i.e the maximum rate a CPSU can charge from Power Distribution Companies) – INR 2.45 per unit (previously it was INR 2.80 per unit).
  • Reduced the Maximum Permissible Viability Gap Funding (VGF) to INR 0.55 Crore per MegaWatt (MW) from INR 0.7 Crore per MW earlier.

CPSU Scheme Phase-II

i.The CPSU Scheme Phase-II was approved in 2019 by the Union Cabinet.

ii.It aims to give a push to ‘Make in India’ by encouraging Government Producers to procure solar cells and modules from domestic manufacturers.

  • It aims to create sufficient demand for domestically produced solar PV cells and modules.

iii.Period: 2019-20 to 2022-23

iv.Viability Gap Funding (VGF)  – VGF of upto INR 70 Lakhs/MW (total support of INR 8, 580 Crore). It is provided to cover the cost difference between domestically produced & imported solar cells and modules.

v.Eligible Organisations – Government producers (PSUs/Government Organisations) which are under administrative control or have 50% shareholding of Central/State Government.

  • Indian Renewable Energy Development Agency Limited (IREDA) conducts bidding for allocation of projects under the scheme.

Recent Related News:

i.On November 9, 2020, MNRE issued an order for scale-up and expansion of the Pradhan Mantri Kisan Urja Suraksha Evam Utthan Mahabhiyan (PM-KUSUM) Scheme. It has set a target of enhanced solar capacity of 30.8 GigaWatt (GW) by 2022 with revised Central Financial Support of INR 34, 035 crores.

About Ministry of New and Renewable Energy (MNRE)
Minister of State (Independent Charge) – Raj Kumar Singh (Lok Sabha – Arrah, Bihar)