India – Proposals for 1,184 MW of solar power projects in Andhra Pradesh

Solar power projects with a total installed capacity of 1,184 MW have been proposed by private developers in Andhra Pradesh, according to Mr Chandan Mitra, Vice-Chairman and Managing Director of Non-Conventional Energy Development Corporation (OOTC:EGDCY) of Andhra Pradesh Ltd.

AP Transo has considered the proposals for issue of power evacuation clearance to facilitate them to participate in request for selection (RfS) or to be invited by NTPC Vidyut Nigam Ltd (NVVN) for final allotment. Thus far, three projects of 5 MW each under solar photovoltaic and one project of 50 MW under concentrated solar thermal energy route have been allotted in phase one of RfS called by NVVN.

Speaking to Business Line, Mr Mitra said this shows the growing interest in solar photovoltaic and solar thermal power generation though installation costs are high. However, changes in tariffs in the last two years show the cost has come down from a high of Rs 19 a unit to Rs 17 to about Rs 12 a unit during the latest bidding.

The price quoted recently by companies like Megha Engineering at about Rs 12 is quite aggressive considering a high of Rs 19 barely two years ago.

This price is also lower than the price fixed by the Central Electricity Regulatory Commission at Rs 17.91, which factors in Central and State subsidies, he said.

In addition, 11 proposals have been selected with a capacity of 10.5 MW under rooftop photovoltaic and small solar power generation programme (RPSSGP). These are expected to be commissioned within one year, he said.

During his address at a meeting hosted by Federation of Andhra Pradesh Chamber of Commerce and Industries (FAPCCI), he said, “We have about 300 sunny days in a year offering scope to take up solar projects. However, in the case of rooftop installations, institutions and those in the remote areas are worried about maintenance issues. These are being addressed.”

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 photovoltaic (SPV)-produced power and R15.4 for concentrating solar thermal power (CSP).

"The cost of solar power will move southwards and it will be the world cheapest" said Singh. About 500 MW of the proposed projects will be generated through concentrating solar power (CSP) 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 energy 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.