Hydropower generation company NHPC Ltd will put up a 40-Mw solar plant in Odisha with an investment of about Rs 1.96 billion.
"The state technical committee, under the chairmanship of the secretary of the energy department, has approved the proposal of NHPC," said a government source.
The solar power project will come up on about 180 acres of land in the Ganjam district and NHPC is impressing upon the state's bulk power purchaser, Gridco, for buying the power produced there, the official added.
Last year, NHPC had evinced interest for setting up a 100-200-Mw solar project in Odisha for the supply of power to Gridco so that the latter could fulfil its renewable energy purchase obligation with assured power purchase agreement (PPA).
The central PSU has already commissioned a 50-Mw solar project in Tamil Nadu and another 50-Mw wind power project in Jaisalmer, Rajasthan.
Betting big on solar projects, NHPC had signed a memorandum of understanding with Solar Energy Corporation of India (SECI) on November 30, 2015, for the development of a 250-Mw grid-connected solar power project in a time frame of five years in association with SECI.
The hydropower generator had expressed its willingness to participate in the 1,000-Mw solar power park scheme coming up in Odisha.
NTPC, NLC (formerly Neyveli Lignite Ltd) and North Eastern Electric Power Corporation Ltd (NEEPCO), SJVN Ltd, a mini-Ratna PSU, have also evinced interest in participating in the state's solar park programme.
Odisha plans to develop a solar park with a production capacity of 1,000 Mw. But, land availability is the key hurdle as the mega park needs around 5,000 acres of land.
The Ministry of New and Renewable Energy (MNRE) has allowed the state government to develop a truncated solar park of 400-Mw capacity under the Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects.
The development of the park assumes significance as the state government, in its newly approved Renewable Energy Policy-2016, plans to add 2,200-Mw capacity of solar energy by 2022. As per estimates by consulting & advisory firm KPMG, this needs an investment of Rs 135 billion.
The state has about 175 Mw of installed capacity of solar power.