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Rewa Solar Power Park

Indian Government Pushes For Guaranteed Grid Connectivity For Renewable Energy Projects

written by saurabh

In another possible boost for the renewable energy project developers, the Indian government is pushing for guaranteed grid connectivity for large-scale renewable projects.

The concept originated following the mega success of Rewa solar power park auction where 750 megawatts capacity was allocated to three developers at then lowest-ever tariffs of Rs 3.30/kWh (5.1¢/kWh), levelised for a period of 25 years.

The Rewa solar power park auction in Madhya Pradesh was unique in that it allowed developers to sell electricity through open access route even when the power utilities refused to purchase electricity. This, among several other industry-first features, led to the lowest-ever tariff bids of that time.

Now, the central government has asked other states to replicate the Rewa solar power park model in order to further push renewable energy investments. Such a step will offer more options to the project developers to sell electricity even when the host state or PPA parties are unwilling to acquire electricity as per signed agreements.

Unwillingness to accept electricity has been a major issue with Indian power utilities. Intermittent power supply, higher tariffs compared to some thermal power projects and poor financial condition has forced Indian power utilities to refuse electricity from renewable energy projects in the past. This leads to no generation at power plants and loss of confidence in renewable energy investors.

While the Ministry of New & Renewable Energy has issued an advisory to all state governments stating that renewable energy projects will have must-run status, its implementation remains in question as it is just an advisory and not binding on states.

The government is also working to implement dedicated transmission lines for renewable energy projects to help states implement the advisory. The Green Energy Corridors project, being implemented by Power Grid Corporation of India, will supply renewable energy from resource-rich states to resource-deficient states.

Such guarantees would not only result in further lowering of tariffs but also help avoid the situation being faced by grid operators in China – where massive wind energy capacity in remote areas remains under-utilised due to lack of transmission network – and Chile – where solar power developers were forced to sell electricity for free due to lack of transmission infrastructure.

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May 19, 2017 0 comment

Solar Power Tariff Bids In India Crash 26% In Just 3 Months

written by saurabh

Participants in the Indian solar power market seem to have been embroiled in a mad race to the lowest possible tariff, the recent competitive auctions for large-scale projects has shown.

Since February this year four major solar power auctions have taken place in India with the lowest tariff bids falling by as much as 26% between the first and the latest auction. The race to lower tariff bids has been fuelled primarily by the crash in solar module prices, regulatory support from the government and, perhaps, the promise and hope of cheap debt finance.

In February, a total of 750 megawatt capacity was auctioned at first year tariff of Rs 2.97/kWh (4.6¢/kWh) which translates into levelised tariff of Rs 3.30/kWh (5.1¢/kWh) over a period of 25 years. The auction was historic in terms of the bids, mode of sale and dirt-cheap debt finance on offer from the International Finance Corporation. The winners in this auction were Acme Cleantech Solutions, Mahindra Renewables and Solenergi.

In April, India’s largest power generation company NTPC Limited offered 250 megawatts at the Kadapa solar power park in the state of Andhra Pradesh. The winner was Solairedirect, a subsidiary of French utility Engie. It secured the entire capacity at Rs 3.15/kWh (4.9¢/kWh) with the highest tariff bid going as high as Rs 4.68/kWh (7.2¢/kWh).

In May, two auctions were held back-to-back over a span of two days. The capacity on offer was 750 megawatts – 250 megawatts by Adani Enterprises and 500 megawatts by IL&FS – at the Bhadla solar power park in the state of Rajasthan.

At least 14 developers placed the final bids with ranged between Rs 2.62/kWh (4.1¢/kWh) and Rs 3.59/kWh (5.6¢/kWh). Only three of these 14 bids were higher than the previous lowest bid of Rs 3.15/kWh (4.9¢/kWh) discovered in the Kadapa solar park auction; and nine bids were lower than Rs 3.00/kWh (4.7¢/kWh).

Phelan Energy (50 megawatts), Avaada Energy (100 megawatts) and SB Cleantech (100 megawatts) were the winners in this auction.

The second auction in May for Bhadla solar power park witnessed increased competition among the project developers. Only one bid was greater than the winning bid of Kadapa solar power park; and five bids were lower than the winning bid of Bhadla solar power park two days back.

Acme Cleantech Solution (200 megawatts) and SB Cleantech (300 megawatts) were the winners in this auction at a tariff of Rs 2.44/kWh and Rs 2.45/kWh (3.8¢/kWh), respectively. The massive jump in competition within two days is evident from the fact that Acme Cleantech Solutions reduced its bid from a losing one of Rs 3.36/kWh (5.2¢/kWh) in the 250 megawatts Bhadla auction to just Rs 2.44/kWh (3.8¢/kWh) for the 500 megawatts auction – decline of 27.4% in a matter of two days.

SB Cleantech also reduced its tariff bid from Rs 2.63/kWh (4.1¢/kWh) to Rs 2.45/kWh (3.8¢/kWh), a drop of 6.8%. ReNew Power Ventures also dropped its bid from Rs 2.74/kWh (4.3¢/kWh) to Rs 2.47/kWh (3.8¢/kWh) between the two auctions but failed to score any win.

May 15, 2017 0 comment

Indian Railways Eyes 700-800 Megawatts In Mega Solar Power Park

written by saurabh

On the heels of the successful allocation of 750 megawatts solar power capacity at record-low rates, the Indian Railways is now looking to replicate this model to ensure cheap and sustainable power supply.

The Indian Railways has approached the government of Madhya Pradesh will a proposal to set up a mega solar power park with a capacity of 700-800 megawatts. The project will come up at Shajapur, a few hundred kilometres east of the Rewa solar power park which received the lowest-ever tariff bid ever in India.

The Delhi Metro Rail Corporation (DMRC) recently signed a power purchase agreement to procure 24% of the electricity generated from 750 megawatts Rewa solar power park. The Indian Railways is looking to replicate the same model.

Auction for Rewa solar power park yielded levelised tariff of Rs 3.30/kWh, the lowest-ever tariff at that time (now the second lowest).

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.

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 Madhya Pradesh government is said to be in talks with Noida Metro and Coal India as well to set up a solar power parks. Last year, the state government signed an agreement with Indian Oil Corporation and Oil India to set up 1,000 megawatts solar power park in Chhatarpur district.

A recent study showed that the Indian Railways can source 25% of its energy needs from renewable energy sources by 2025. This can be realised, in part, through the Railways’ plan to set up 5 gigawatts of solar power capacity across the country.

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April 22, 2017 0 comment

PPA Signed For India’s Cheapest Solar Power Project

written by saurabh

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.

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.

April 19, 2017 0 comment

750 Megawatts Solar Tender In India Draws Bids For 7,500 Megawatts

written by saurabh

One of the recent solar power auctions in India has received a massive response from project developers.

The Rewa solar power park tender of 750 megawatts has attracted bids from some of the leading project developers in India and abroad. A total of 20 developers have placed bids with a cumulative capacity of 7,500 megawatts, translating into a 10 times over-subscription of the tender.

The solar power park will be developed in 3 phases of 250 MW capacity each, spread over a total of 1,500 hectares. Power generation from the first phase is expected to start beginning in June 2017, with the entire capacity expected to be fully operational by December 2017.

Of the 20 bidders, four have submitted to develop all three sections of the park. ReNew Power (one of India’s leading renewable energy developers and backed by Goldman Sachs), SBG Cleantech (joint venture between Bharti Enterprises, SoftBank and Foxconn), Enel Green Power and Adani Group (operator of India’s largest solar power project) submitted bids to develop the entire 750 megawatts capacity.

Hero Future Energies and Mahindra Renewables, both parts of large industrial conglomerates in India placed bids to develop 500 megawatts each.

A number of reputed Indian and global companies submitted bids to develop 250 megawatts capacity each. These include Acme Solar, Orange Renewables, Torrent Power, GDF Suez, RattanIndia Power, Aditya Birla Renewables, Azure Power Canadian Solar and Solenergi Power.

Almost a third of the planned capacity has already been allocated to the Delhi Rail Metro Corporation (DMRC) while the rest will be signed up by the distribution utilities of the host state, Madhya Pradesh. The International Finance Corporation (IFC) will provide funding for the project.

January 31, 2017 0 comment

Record Low Bids Expected In India’s 750 Megawatts Solar Power Tender

written by saurabh

India’s solar power bids are expected to fall to a new record low with the upcoming reverse auction of 750 megawatts solar power park.

The Solar Energy Corporation of India (SECI) is expected to launch reverse auction for the Rewa solar power park in the state of Madhya Pradesh. The solar power park will be among the largest solar power parks in India although much larger parks are being planned by SECI.

The solar power tender will offer some incentives to the project developers that have never been offered till date. Successful project developers will have more flexibility to sell generated electricity compared to existing projects. A significant percentage of the planned capacity has been allocated to power distribution utilities in Madhya Pradesh as well as the Delhi Metro Rail Corporation (DMRC).

SECI will also implement a payment security mechanism so that developers are ensured of payment even if the power distribution utilities refuse to pay. The developers shall also receive payment during times of non-availability of power grid.

Additionally, the tariff discovered following the reverse auction shall undergo annual escalation of INR 0.05/kWh (0.7¢/kWh) for the first 15 years.

Delhi Metro has agreed to procure at least 121 million kWh electricity every year from the first phase. Once all the phase are operational, Delhi Metro may increase procurement to 363 million kWh per year.

Earlier this year, the International Finance Corporation (IFC) signed an agreement with the government of the state of Madhya Pradesh in India to provide assistance in the implementation of the solar power park. The IFC will extend its global expertise to structure and implement the transaction to help attract private investments of about $750 million. IFC’s work on this project will be supported by its partnership with Australia’s Department of Foreign Trade.

The lowest tariff bid for utility-scale solar power project in India currently stands at INR 4.34/kWh (6.40¢/kWh) in Rajasthan. There is every chance that the bids for the Rewa solar power park will be lower than the current lowest bid.

January 22, 2017 0 comment

Delhi Metro To Run Trains Using Solar Power From Next Year

written by saurabh

India’s largest subway system is set up fully switch to solar power from next year with an aim to reduce its growing carbon footprint.

Delhi Metro Rail Corporation chief Mangu Singh told reporters that the subway system shall fully shift to solar power to run trains and support infrastructure, like lighting at stations, from next year.

DMRC shall maintain backup power systems in case of any eventuality. There have been no reports so far to indicate that the the DMRC shall use battery storage systems as well.

Currently, DMRC has a peak demand of 150 megawatts which is expected to increase to 250 megawatts on network expansion. DMRC has signed an agreement with Rewa solar power park, proposed for installation in the state of Madhya Pradesh, to acquire 250 megawatts electricity. Power from that project should start flowing from next year. The solar power park is stalled to have a total installed capacity of 750 megawatts.

Delhi Metro already operates several rooftop solar power systems at many of its stations. The rooftop system fulfil the electricity needs of the stations. The Corporation is set to expand this network of rooftop solar power systems and targets to have installed rooftop solar capacity of 50 megawatts by 2020.

Since its inception Delhi Metro has taken several measures to reduce its carbon footprint and maintain sustainability. Coaches used by Delhi Metro have regenerative braking systems installed.

December 20, 2016 0 comment

Delhi Subway System Signs PPA With 750 MW Solar Power Project

written by saurabh

India’s largest subway system – Delhi Metro Rail Corporation – has signed power purchase agreement with one of the largest solar power projects planned in the country.

According to media reports, the Delhi Metro Rail Corporation (DMRC) has signed agreement to purchase electricity generated from the planned 750 MW solar power park in the state of Madhya Pradesh. Power generated from the Rewa-based solar power park will be transmitted to Delhi, around 800 kilometres away.

The 750 MW solar power park will be one of the biggest in India once fully operational. The project is among the first ultra mega solar power projects approved by the central government under its revised solar power target of 100 GW by March 2022.

June 14, 2016 0 comment

Bids Invited For 750 MW Solar Power In Indian State Of Madhya Pradesh

written by saurabh

In what is probably the first tender floated for an ultra mega solar power project in India, central and state agencies in India have invited bids to set up 750 MW of solar power capacity in the state of Madhya Pradesh.

The solar power park shall be developed in 3 phases of 250 MW capacity each spread over a total of 1,500 hectares. Delhi Metro Rail Corporation shall sign a power purchase agreement, likely for 150 MW, while the remainder capacity shall be procured by the state utility. Power generation from the first phase is expected to start from June 2017 while the entire capacity is expected to be fully operational by December 2017.

The government of Madhya Pradesh has already approved the project following which the process of land acquisition was initiated. The project is expected to required a total investment of around $500-600 million as per the current capital cost requirements.

March 23, 2016 0 comment