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PPA Signed For India’s Cheapest Solar Power Project

One of India’s largest solar power parks and the cheapest so far has crossed yet another milestone in its journey towards commissioning and full operationalisation.

One of the major off-takers of the electricity generated from the Rewa solar power park, Delhi Metro Rail Corporation (DMRC), recently signed the power purchase agreement with Madhya Pradesh Power Management Company. As per the agreement, DMRC will procure 24% of the electricity generated at the 750 megawatts solar power park.

The Rewa solar power park will be located in the state of Madhya Pradesh and is a joint venture between Madhya Pradesh Urja Vikas Limited and Solar Energy Corporation of India Limited. In addition to DMRC, the power distribution companies in Madhya Pradesh shall also procure electricity from the solar power park.

Three units of 250 megawatt each were recently auctioned by the Solar Energy Corporation of India. The three units of the solar power park have been awarded at tariffs of Rs 2.970 to Rs 2.979 per kWh (4.4¢/kWh). The lowest bid was placed by ACME Cleantech Solutions, one of the leading solar power project developers in India. Mahindra Renewables, part of a large industrial conglomerate, secured a 250 MW unit at Rs 2.974/kWh, and Solenergi secured the third unit at Rs 2.979/kWh.

These are the lowest-ever tariffs for any utility-scale solar power project in India. The bids placed by these developers are for only the first year of project operations. The tariffs will increase by Rs 0.05/kWh (0.07¢/kWh) for a period of 15 years. Thus, the levellised tariff for all three units will be around Rs 3.30/kWh (4.9¢/kWh).

The power purchase agreement for Rewa solar power project is central to DMRC’s plan to source all of its electricity from solar power projects.

The next milestone in the development of this solar power park will be the financial closure. The International Finance Corporation, which will provide long-term debt finance at 0.25%, stated that this step shall be completed soon. The project is now expected to be commissioned within 18 months or by the start of Q4 2018.