Solar Power Finds Few Takers Even at Low Tariff | CORPORATE ETHOS

Solar Power Finds Few Takers Even at Low Tariff

By: | October 3, 2018

Oct 3: The country’s renewable energy capacity seems to be getting stuck as it is not being purchased by the states even after being made available at a low rate of Rs 2.44 per unit. In contrast, wind power tariffs are higher at Rs 2.76 per unit under the latest auction.

Reports quoting RK Singh, Union Power Minister, said that he has shot of a letter to Finance Minister Arun Jaitley, stating that at a purchase of renewable energy at Rs 2.44 per unit, the total cost per unit would come to Rs 4.04 along with the fixed cost. This is higher when compared to the Rs 3.25/unit paid for thermal power.

Renewable energy is recurrent. In this scenario, the renewable energy capacity of approximately 88,000 MW can only be attained after constantly pursuing the states. But the states refused to sign the PPA for renewable energy if the rates are any higher, he was quoted as saying.

In the letter, RK Singh has also pointed out that the Solar Energy Corporation of India (SECI) will have to hand over Rs 40 lakh/year each for every MW of renewable capacity without PPAs over 25 years. The Solar Energy Corporation of India (SECI) run by the state is the arbitrator for renewable energy projects. Adding that the SECI will not be able to afford a situation like this, he said thus it will not accept a bid through which it will not get the PPA signed by the states for the power at that rate.

Prime Minister Narendra Modi is inaugurated three renewable energy events – the  International Solar Alliance, Indian Ocean Rim Association’s Ministerial Meeting on renewable energy and the second edition of RE-INVEST 2018. This move reveals on the governments interest in the promotion of renewable energy

In order to meet the power requirements, states have PPAs with various thermal generating units. The two-part tariff structure of the thermal power payment includes a fixed cost per unit and the variable-cost. The average unit cost of thermal power is about Rs 3.25/unit.

Recent solar bids of 4 gigawatts, including the 1 gigawatt by Uttar Pradesh and 500 megawatt by Gujarat have been scrapped due to high price. According to the Ministry of New and Renewable Energy, the rise in price on the basis of duty will be passed on as solar tariffs. India’s aim is to increase the solar capacity to 100 gigawatts by 2022. The current solar capacity of the country is 23 gigawatts.