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Solar power to turn cheap as firms bet on India

business Updated: Dec 05, 2010 20:47 IST
Himani Chandna
Himani Chandna
Hindustan Times
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India could well turn out to be the cheapest solar power producer as developers clamour with each other to execute projects, even willing to sell power at rates sharply lower than prevailing tariffs.

“We had invited the proposals for 650 MW project but received an enormous response of 5,000 MW from project developers, manufacturers, and foreign companies” said Gauri Singh, joint secretary, ministry of renewable energy (MNRE).

Buoyed by this response the government had asked the bidders to offer discount on tariffs, lower than those listed by the regulator — the central electricity regulatory commission (CERC).

The bidders that offered upto 30% tariffs lower than the CERC rates were shortlisted for executing the projects thrown open under the new solar mission.

At present, CERC tariff is around R17.9 for solar photo voltaic (SPV)-produced power and R15.4 for solar thermal power.

“The cost of solar power will move southwards and it will be the world cheapest” said Singh.

About 500mw of the proposed projects will be generated through solar thermal plants and the rest through will be SPV based.

The electricity from these power plants is proposed to be purchased on the basis of

CERC determined tariff by NTPC Vidyut Vyapar Nigam Limited — a trading arm of NTPC— for sale to distribution companies. These power plants will be connected to the grid through substations of distribution utilities or state transmission utilities.

In order to promote solar power the CERC has proposed to completely waive off the transmission charges and transmission losses applicable to solar power developers for use of inter-state transmission system.

This facility is proposed for those solar power plants for whole of their project life which are commissioned in the next three years.

The government expects project developers and NVVN to ink the power purchase agreements (PPAs) by January next year to enable early commissioning of projects. A SPV project should be commissioned within a year, while a solar thermal project has to be set up within 28 months from the signing of the PPA.

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