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Record low price for solar power to be sold by Indian Government

sunflag-indiaIndian government plans to sell solar power at record low price of $0.07 per unit. News Forage, 13 Oct 15,  India’s strategy of a foreign currency-denominated tariff plan for solar energy is aimed at providing solar power at a new low of Rs.4.75 per unit to the states.

This would work like this. Firms such as state-owned NTPC Ltd will call for bids from solar project developers for buying 15,000 megawatts (MW) on behalf of the ministry of new and renewable energy (MNRE) that will then be sold to the states. NTPC will run a reverse bidding process for procuring solar-powered electricity in foreign currency-denominated tariff to reduce risk. It will provide a purchase guarantee, making such projects bankable and help solar power eventually cost the same as that purchased from the grid (this is called grid parity).
“With the developers expected to quote bids in the region ofRs.3.50 per unit, NTPC will sell the power to the states at Rs.4.75 per unit, with the balance going to a hedge fund. This hedge fund will be used for payment to cover the foreign exchange risk,” said an official aware of the strategy, requesting anonymity.
Mint reported on 16 September that solar power tariffs in India are set to hit a new low with Rs.5 per kWh tariff becoming the new norm.
This foreign currency denominated tariff plan may involve bundling with unallocated thermal power as a backstop arrangement, in the event of the rupee depreciating beyond a particular level. The move is aimed at attracting foreign investors to India’s solar energy sector by reducing the foreign exchange risk involved……
The National Democratic Alliance government has pushed renewable energy to the top of its energy security agenda and is looking to provide green power at less than Rs.4.50 per unit. India is fit for solar power generation given that the country receives solar radiation of 5 to 7 (kWh) per sq. m for 300-330 days in a year.
India launched the Jawaharlal Nehru National Solar Mission in 2010 with the aim of adding 20,000MW of grid-connected solar power to the country’s energy mix by 2022 in three phases. While India has a solar generation capacity of 2,900MW, the Bharatiya Janata Party-led government has substantially revised an earlier target of achieving 20,000MW capacity by 2022 to 100,000MW, unveiling the world’s most ambitious solar power generation programme. This would require an investment of around Rs.6.5 trillion over five years.
The National Democratic Alliance government has pushed renewable energy to the top of its energy security agenda and is looking to provide green power at less than Rs.4.50 per unit. India is fit for solar power generation given that the country receives solar radiation of 5 to 7 (kWh) per sq. m for 300-330 days in a year.
India launched the Jawaharlal Nehru National Solar Mission in 2010 with the aim of adding 20,000MW of grid-connected solar power to the country’s energy mix by 2022 in three phases. While India has a solar generation capacity of 2,900MW, the Bharatiya Janata Party-led government has substantially revised an earlier target of achieving 20,000MW capacity by 2022 to 100,000MW, unveiling the world’s most ambitious solar power generation programme. This would require an investment of around Rs.6.5 trillion over five years.

October 14, 2015 - Posted by | India, renewable

1 Comment »

  1. None of the companies quoted on PPA terms so far performed. People are quoting low prices but could not perform later and after holding the PPA or awarded the PPA agreement they are looking for companies from Korea and other countries to handover the job to them and make profit out of that. Only after an year, we will come to know exactly how many PPA’s are awarded, how many KWh/MWh has been awarded and how many has been derived successfully out of that. Till then it remains dark without any figures.Many lowest quoted people are not able to perform. Some companies quote lowest in order to diminish the prices in the international market.

    Madhavan Rajnarayanan's avatar Comment by Madhavan Rajnarayanan | October 28, 2015 | Reply


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