Solar parks to add 20,000 mw capacity soon

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Dismal rooftop solar generation prompts government’s move

The Centre is all set to expand the solar park scheme capable of hosting an additional 20,000 mw of projects. The move is prompted by apprehensions that the capacity addition programme for solar energy would suffer in the absence of government support for land and transmission infrastructure.

Sources in the government said the ministry of new and renewable energy (MNRE) has moved a cabinet note for setting up additional solar parks across the country. The bidding for the second phase would start soon after getting the approval. In the first phase, formulated in 2014-15, parks capable of hosting solar panels to produce 20,000 mw were approved. Under this scheme, about 34 areas in 21 states, which could house 19,900 mw of projects, were identified. In some cases, bidding for solar projects has also been completed.

The second phase could see an addition of another 25 solar parks.

“We have a target of adding 1lakh mw of solar power generation capacity by 2022. While we are on track for achieving the target, need has been felt to accelerate capacity addition by providing necessary infrastructure support to developers,” MNRE secretary Upendra Tripathy told FC.

“This will not only help to keep solar tariff low, but would also help to rope in international investors looking at the sector,” he added.

While government officials see the expansion of solar park scheme as another initiative to boost capacity addition programme, they admitted that the Centre has been pushed into it, as the progress on rooftop solar programme has been dismal.

Out of 1 lakh mw solar target, 40,000 mw has to come from rooftop solar projects. But thus far only a measly 300-mw capacity has been generated. This is against a record 3,019 mw of grid-connected solar capacity added during FY16.

Importantly, solar parks have helped to get the lowest solar tariff quotes from developers. Solar tariffs hit a record-low in November last year when US-based SunEdison bid Rs.4.63 per unit in a reverse online auction invited by NTPC for setting up 500 mw solar projects in Andhra Pradesh.

It fell further in January when Finland-based Fortum Finnsurya Energy bagged the mandate to set up a 70-mw solar plant under NTPC’s Bhadla Solar Park quoting a tariff of Rs 4.34 per unit.

Bridge to India, which tracks developments in the renewable energy space in the country, believes tariff quote on solar bids may inch higher, especially for projects that are not being set up in solar parks where land acquisition would be an issue.

They are also being invited by organisations other than NTPC with higher risk perception. “Solar parks are essential for rapid expansion of capacity and bringing down tariff. This would eliminate the risks for investors. Facilities outside the solar parks could delay projects as building a transmission network would take a lot of ti­me,” said Hartek Singh, MD of Hartek Power, an EPC player in the solar segment.

Such parks use vacant land capable of hosting solar panels and provide developers the necessary infrastructure, like transmission lines. It takes about 5-6 acres to build 1 mw capacity.

The second phase of solar parks will be unique as MNRE plans to auction 200-300 mw projects together with power storage capabilities. While this would add to the cost of project by almost Rs 3 crore per mw, Tripathy said it would open space for more storage-based projects to ensure that solar power flows without much interruption into the grid.

In the first phase, MNRE gave financial support thro­ugh viability gap funding of Rs 20 lakh per mw, or 30 per cent of the cost of developing the park, whichever was lower. This is expected to be raised in the second ph­ase.

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