Solar tariffs sink further below coal power at Rs 2.44 per unit

15 May 2017

Solar power tariffs are tumbling like nine pins in India. Within two days of sinking 18% below the average price of grid supplies, the cost of solar power on Friday dived further to find a new floor at Rs 2.44 per unit. The fresh low was bid by Acme Solar for a 200-MW packet of Bhadla solar project’s third phase. Japan’s SoftBank won another packet of 500 MW at Rs 2.45 per unit.

The results of the Bhadla bidding came a day before power, coal, renewable energy and mines minister Piyush Goyal is to launch the Narendra Modi government’s efficient lighting scheme, UJALA, in the U.K. “We have finally been able to make solar power tariff go below grid parity… India’s leadership position in green energy will now benefit the world,” Piyush Goyal said.

On Wednesday, solar power tariff had slid to Rs 2.62 per unit, below the average price of Rs 3.20 charged by India’s largest generation utility NTPC for electricity generated by its coal-fired plants. Phelan Energy and Avaada Power shared the crown for the price bid for packages of 50 MW and 100 MW, respectively, of the fourth phase of the Bhadla project. Softbank Cleantech won a 100 MW packet quoting Rs 2.63 per unit.

The previous low of Rs 3.15 per unit quoted by Solairedirect in the auction for state-run generation utility NTPC’s 250MW at Kadapa in Andhra Pradesh last month. The lowest tariff quoted for a grid connected solar power project before that stood at Rs 3.30 per unit, on a basic bid of Rs 2.97 a unit for the first year, quoted in February for the first unit of the 750MW Rewa solar park in Madhya Pradesh.

Solar power tariffs have been falling in the last three years due to the Narendra Modi government’s thrust on raising India’s green energy footprint and reduce oil imports by 10% by 2030. After coming to power in 2014, the Modi government metamorphosed the UPA’s National Solar Mission by setting a target of building 175GW (giga watt) of green energy capacity by 2030.

But a section of industry players cautioned that the “hidden costs” of integrating such large-scale plants into grid should be considered when calculating the landed cost. According to these players. Grid-connected solar PV (photo voltaic) plants use transmission lines only 20% of the time compared to 70% by traditional plants, which makes it 3.5 times costlier to wheel solar power. Also, operation of conventional plants will have to be ramped down or up to maintain balance between supply and demand. This would result in lower plant load factor for conventional power stations, which are expected to drop to 50% levels from current 60%. This in turn would push up the fixed cost component in the average cost of power and push them out of favour with state utilities.

As reported by TOI, solar tariffs has sunk to Rs 3 per unit quoted by Gurgaon-based Amplus Energy Solutions in auctions conducted by Solar Energy Corporation of India.

Source – timesofindia.indiatimes