State governments, private developers, non-government organisations and regulators are taking pro-active steps to pursue solar power in the country.
Considering the high capital cost of Rs 18 crore for developing a megawatt (Mw) of solar power, developers are demanding a different rate structure and planning hybrid modules by clubbing photovoltaics (PV) with wind, biomass and coal. This clubbing will make projects more viable.
As state electricity regulatory commissions are planning to make it compulsory for distribution companies to buy 0.25 per cent of their power needs from solar power this year, either in physical form or in renewable energy certificate, the business looks quite lucrative.
A senior official at the Ministry of New and Renewable Energy said for off-grid allocation of 100 Mw across the country, there was an unprecedented response and all applications were closed within an hour.
“Now, the power trading wing of NTPC, NTPC Vyapar Vidyut Nigam (NVVN), has invited expression of interests for 650 Mw of solar power for completing the Phase-I operation for bringing 1,000 Mw by 2013,” he said. The last date for submitting expression of interests for this is September 17.
The official said considering high capital cost and per unit rate, the government had roped in NVVN to buy this power at a rate, Rs 17.51 for PV Modules and Rs 15.31 for Concentrated Solar Power, fixed by the Central Electricity Regulatory Commission. The Centre plans to build solar capacity of 20,000 Mw by 2020.
Mumbai-based power analyst D Radhakrishna told Business Standard that one of the main barriers to solar energy was the rate. The project cost of a solar plant is around Rs 18 crore per Mw, against Rs 5 crore for a conventional power plant, thus making the rate component almost four times.
The average generation rate is around Rs 3.50 and thus, the solar rate becomes around Rs 16. The second barrier is plant utilisation factor, with Sun shining only eight to 10 hours for 250 days a year, making plant utilisation factor around 25 per cent.
The topography of Solar India is that only a few states like Rajasthan, Gujarat, Tamil Nadu, Andhra and few parts of Central India have good solar potential. Despite these odds, the official said, the response was good, as most developers, who have got land and grid connectivity arrangements, were in queue for making good fortune.
NVVN official said the finance ministry had given the consent that a mechanism would be developed by the ministries of power, new and renewable energy, and NVVN, so that any revenue loss to NVVN would be provided by the finance ministry.
