Tariff-based Bidding to award Green Corridor for Solar Parks

Rs 50,000 crore of power lines open for private participation

Projects under the ambitious transmission plan to connect the upcoming 33 solar power parks across India are likely to be awarded through tariff-based competitive bidding (TBCB).

The green corridor project — a dedicated transmission network for renewable energy — was envisaged by state-owned Power Grid Corporation (PGCIL) at an estimated cost of Rs 40,000 crore in 2011. With the new government revising the targets five times, a secondary plan for solar parks was also drafted along with revised transmission plan.  According to industry estimates, the cost of connecting 27 solar parks is close to Rs 55,000 crore. Last year, seven more parks were added, taking the cumulative capacity to 19,900 megawatt, according to government documents.

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In a recent inter-departmental meeting held to discuss the green corridor project, it was mentioned the evacuation system for future solar parks “to be normally constructed through TBCB”.

The Ministry of New & Renewable Energy, Ministry of Power, PowerGrid and the Central Electricity Authority (CEA) participated in the meeting. “CEA and PGCIL would be drafting the plan for the overall evacuation system for solar parks and provide back-end support,” said an official in the know. PGCIL is already constructing the inter-state transmission network for connecting renewable energy-rich states (Green Corridor-I). As for Green Corridors-II for solar parks, work is underway for six solar parks in Andhra Pradesh, Madhya Pradesh, Karnataka, Rajasthan and Gujarat.

To expedite the transmission development for the upcoming solar parks, the projects would now be awarded to private players as well through transparent bidding process. The move is in line with the government’s plan to open up the power transmission sector for private investment. Industry executives said Sterlite Grid, Adani Power, Essel Infra, and Tata Power etc might participate in the bidding. These companies had won several power transmission projects last year through TBCB.

“Solar projects ideally take six months to get commissioned, while transmission lines take three to six years. So, it is a welcome move to involve private players when PGCIL already has a long pipeline of projects,” said an executive.

The Association of Power Producers (APP) had earlier batted for opening mega projects such as green corridors for private investment to bring down power rates. “The tariffs discovered through competitive bidding are almost 30-45 per cent lower than regulated tariffs,” said a letter by APP to the power ministry last year. Increased competition would also reduce the risk of generation projects remaining stranded due to untimely completion of transmission lines, it said.

The 33 solar projects would come up in 21 states including Rajasthan, Madhya Pradesh, Gujarat, Telangana, Andhra Pradesh, Karnataka, Uttar Pradesh, Jammu & Kashmir, Punjab, Tamil Nadu and Odisha, among others.

Last year, eight lines totaling Rs 20,000 crore were awarded to private companies through the TBCB route. PGCIL was nominated for two major lines totalling Rs 30,000 crore.

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MOMENT IN THE SUN

• Green Corridors-II, dedicated transmission network for solar parks
   
• Cost estimated at Rs 55,000 crore
   
• To be awarded through tariff-based competitive bidding
   
• 33 solar parks of 19,9000 Mw to come up in 21 states
   
• PGCIL building transmission for 6 solar parks, future ones to be tendered
   
• Likely participation of Sterlite Grid, Adani Power, Essel Infra, and Tata Power