In the tender for setting up 500 megawatt (Mw) capacity for a solar park in Karnataka, four Indian solar companies outbid foreign players to win major capacities. Rattan India-promoted Yarrow Infrastructure, which quoted the lowest bid of Rs 4.78 a unit, won the contract to set up 50 Mw capacity.
This was closely followed by Adani Power, Acme Solar, Tata Power and Fortum Finnsurya with same bid of Rs 4.79 per unit. They all quoted the bid for 100 Mw — two power units of 50 MW each. Fortum, a Finnish energy utility, is the only foreign company to win a project in this tender.
With the current win, RattanIndia’s solar portfolio has increased to more than 290 MW. Once connected to the grid, the electricity generated from the park will be sold to NTPC, under a 25-year power purchase agreement. The project is expected to be connected to the grid before end-2017. These bids witnessed aggressive bidding since Karnataka has very high solar insolation in the country, said RattanIndia in a statement.
ReNew Power, backed by Goldman Sachs in India, won 50 Mw by quoting Rs 4.8 per unit. All bids were in the open category of solar cell procurement.
Karnataka is setting up a 2,000 Mw solar park at Pavagada in Tumakuru (earlier Tumkur) district and this is the first tranche of 500 Mw. This would be the largest solar park to be developed in India. Till recently, the upcoming 750 Mw park at Rewa in Madhya Pradesh was being touted as the biggest in the world.
Among other winners were SoftBank-promoted SBG Cleantech, Hero Solar Energy, Azure Power, Canadian Solar, etc. The government’s aim of 100,000 Mw solar power generation by 2022 hinges on the success of 33 solar energy parks with 19,900 Mw capacity being planned across 21 states.
Under the solar park policy, land is provided by the state governments. Around 5 acres are required for one megawatt capacity. The land cost in solar parks, however, is higher than elsewhere, as project operators are offered developed infrastructure. Analysts fear this could lead to increase in final tariffs.
The Union government is giving developers Rs 2 lakh for every MW capacity as viability gap funding if being developed under the solar park policy. The developer recovers the remaining cost from project operators.
The Union government provides the guidelines for development, sets benchmarks and provides incentives. The ministry of new and renewable energy handles the other key area of coordination required for power evacuation.