Another mile stone for India’s solar power program

4 MW horizontal single axis tracker in Vellakoil, Tamil Nadu

Shortfalls in rain, availability of water in rivers and growing atmosphere pollution is not only threatening the water supply to agriculture and cities but also raising questions about the viability of future electricity production by means of water intensive methods like thermal and hydro. Electricity became a crucial element in modern life to such an extent that, it acquired a position next to air, water, food and shelter. Raising concerns about safety and high initial investment already made nuclear power production unattractive.

It is at this juncture we are getting some good news from Rewa Ultra Mega Solar Project’s bidding. Bid for three units in Rewa – each will have an installed capacity of 250 MW – was won by won by Mahindra renewables, ACME Solar Holdings and Sweden’s Solengeri Power. Total installed capacity of this project is 750MW.

Mahindra renewables, ACME Solar Holdings and Solengeri Power quoted 2.979/KWh, 2.97/KWh and 2.974/KWh for first year. Under Rewa’s power purchase agreement there is an escalation price of 5paisa/ unit in tariff for next 15 years. As per Mint reports levelled tariff over 15 years will be 3.30 INR/Unit.

What make this number path breaking is, it is the first time we are witnessing a below 3 INR price for solar power. Till now the record was 4.34INR/Unit. Even the average price for electricity from highly polluting but cheap coal plants of NTPC stands at 3.2 INR/ Unit.

If these private companies which are going to operate Rewa are able to produce power sustainably (only time can tell) then lot of new projects will definitely come up. Even now many foreign funds are keen on investing in India’s renewable sector. However, to mature, the industry has to demonstrate that even without government subsidies it has a sustainable future.

In any case renewables share in Indian electricity production is going to increase. As per a BP estimate it will it 8% (from current 2%) by 2035. As of December 2015, we have an installed capacity of 9012.69MW.

Sajeev

References
1. Livemint

Photo Courtesy: Wikipedia