Rewa project brings solar power tariff to as low as Rs2.97 per unit

The 750 MW mega solar power project of state-owned National Thermal Power Corporation (NTPC) at Reva, Madhya Pradesh, was bid at an all-time low tariff of Rs2.97 a kilowatt hour, making it one of the biggest solar parks Reva in the world those with the lowest tariffs.

This is lower than the average cost of Rs3 for electricity supplied by NTPC from its coal-fired plant.

Mahindra Renewables, ACME Solar Holdings and Solengeri Power won the contract for three units of the project at tariffs of Rs2.979, Rs2.97 and Rs2.974, respectively, for the first year. Bidding for the project closed on Friday.

The Madhya Pradesh government will provide state guarantees and viability gap funding for the 750 MW Rewa ultra mega solar project

Even with the VGF, these tariffs are on a par with the Rs3.94 a unit that emerged in a tender floated by the Uttar Pradesh Power Corporation last year for coal-based power. The project has no government subsidy since it does not offer viability gap funding.

The World Bank-funded project will have three units of grid-mounted solar photovoltaic power plants of 250 MW each.

The selected bidders will sign two sets of PPAs with Delhi Metro Rail Corporation and Madhya Pradesh Power Management Corporation Ltd (MPPMCL). While DMRC is likely to buy 121 million units (kilowatt per hour) from each of the three units, MPPMCL will book 80 per cent of the generation capacity.

Located in Gurh Tehsil in Rewa, the project will supply solar power to meet almost the entire daytime requirement of Delhi Metro. This will also enable the project to supply the bulk of the power within the state during peak demand hours.

Twenty companies, including ReNew Power, SBG Cleantech and the Adani and Aditya Birla groups, had put in bids for 10 times the required capacity of 750 MW.

Power from the project is likely to be available from September 2017. The reverse auction for the project started with base prices for the three units at Rs3.59, Rs3.62 and Rs3.64.

The lowest tariff for grid-connected solar power so far was Rs4.34 per unit. Fortum India quoted the rate in January 2016 for the Badla solar park in Rajasthan.

The highest tariff quoted for the Rewa project was Rs 4.39 per unit, which is just 5 paise more than the previous low.

Shapoorji Pallonji Infrastructure and Torrent quoted Rs4.39 and Rs4.26 respectively and are out of the race.

In roof-top solar, Amplus Energy bid a record low of Rs3 a unit in Uttarakhand, Himachal Pradesh and Puducherry in November 2016 to win a contract to install 14.5 MW of solar plants across 10 states.

Solar power tariffs have been falling in the last two years due to the Narendra Modi government's thrust on raising India's green energy footprint and reducing oil imports by 10 per cent by 2030.

The government's National Solar Mission has set a target of building 175 giga watt of green energy capacity by 2030.