Lower Tariffs Drive Big Solar Dreams
This, together with the policy of mandatory sourcing of green power and other financial incentives is primarily driving big solar dreams that would change the way project planners look at solar power plants. The department of heavy industries is piloting a solar project with a capacity of 4,000 mw, first reported by ToI on September 21. This is a global first and similar in size to the ultra-mega power projects (UMPPs) conceptualized to ramp up generation capacity quickly.
Another major change that is expected to push growth is the MNRE ministry’s plan to bid out 750 mw solar capacity in JNNSM’s second phase (2013-17). This would be similar to the case of conventional power plants where a company offering the lowest tariff gets to set up and operate a project. But unlike conventional projects, the ministry would provide viability gap funding to these solar plants, making them attractive proposition for investors.
All these factors together are prompting companies such Reliance Power to think in terms of setting up three-digit capacity of 100 mw solar plants, which have so far remained in two digits. There is certainly scope for such plants.
Solar contributes less than 0.5% of India’s energy mix but government hopes to ramp it up to 5%-7% by 2022, when the JNNSM’s third and final phase concludes and tariffs become competitive against grid. A 2010 study by the US-based The Pew Charitable Trust estimated clean power investments in India to touch $169 billion over the next decade, much of it into solar and wind power plants.