Too Much Solar Power: Indian State Refuses Power From One Of Country’s Cheapest Solar Projects

Solar power market in India seems to have expanded at such an astounding pace that now states are unwilling to accept more solar power market, such a case has propped up in the state of Andhra Pradesh.

According to media reports, Andhra Pradesh has refused to sign power purchase agreement for 250 megawatt solar power project part of the Kadapa solar power park stating that it has sufficient solar power coming up and does not required any more at the moment.

The project in question was secured by Solairedirect, a subsidiary of French energy major Engie. Solairedirect submitted a winning bid of Rs 3.15/kWh (4.9¢/kWh) in an auction organised by the Solar Energy Corporation of India for NTPC Limited which is developing the solar power park. NTPC Limited, the largest power generation company in India, was supposed to sign the power purchase agreement with Solairedirect and would have then supplied it to power utilities in Andhra Pradesh.

Andhra Pradesh had an installed solar power capacity of 1,294 megawatts at the end of March 2017 and is expected to increase it to 1,867 megawatts by March 2018. The state utilities thus claim that they have contracted enough solar power and do not require additional supply.

While the power utilities claim to have contracted enough solar power, the math does not add up.

The Andhra Pradesh Electricity Regulatory Commission (APERC) has proposed to increase the share of renewable energy in its electricity mix to 25.25% by March 2022. For non-solar renewable energy technologies, APERC has proposed a target of 12.50% by March 2022. The commission has also proposed to increase the solar power share from 4.75% in 2017-18 to 12.75% in 2021-22.

According to the Ministry of New & New Renewable Energy (MNRE) at 8% solar RPO target, Andhra Pradesh would require 9,834 megawatts operational capacity by March 2022. At 12.75% this capacity requirement would increase substantially.

Project developer Solairedirect is not expected to suffer from this setback as NTPC is free to approach power utilities of other states to sell this electricity. Several states across India are yet to move towards solar power on a large-scale.

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