Date:05/09/2008 URL: http://www.thehindubusinessline.com/2008/09/05/stories/2008090550840200.htm

Back Gujarat signs private pact to procure 5 MW solar power

There are no
recurring costs
in solar energy generation

Virendra Pandit

Ahmedabad, Sept. 4 Gujarat has emerged as the first State in the country to have signed a power purchase agreement (PPA) in the area of solar power generation under which the State would purchase 5 MW of power from a private sector company at a fixed tariff of Rs 3.37/ kilowatt hour (per unit) for 20 years, renewable thereafter.

The company, Euro Solar Power Pvt Ltd, promoted by the diversifying Euro Group, plans to invest Rs 125 crore in the project in Kutch district. Pending necessary approvals, it has lined up a further investment of more than Rs 3,000 crore for generation of an additional 105 MW of solar power, for which it has already acquired 400 acres of land near Bhachau in Kutch district.

The actual rate of electricity generation through solar photovoltaic grid interactive power plant would be the most expensive one, at Rs 15/ unit. However, the balance Rs 11.63 would be borne as an incentive by the Centre under a World Bank plan to encourage solar power generation, commencing with 50 MW per annum.

The incentive would be made available by the Union Ministry of New and Renewable Energy, which is expected to approve the said PPA before December. The Centre had asked five States — Gujarat, Rajasthan, West Bengal, Haryana and Orissa — to generate at least 10 MW of power each through solar energy by 2009. Solar power generation technology is the most expensive one, at Rs 25 crore/MW, as compared to, say, thermal power which comes at Rs 4-5 crore/MW.

However, unlike other sources, there are no recurring costs in solar energy generation and once installed, the solar power station can go on producing power with practically no further costs involved. Under the PPA signed on August 12, by Gujarat Urja Vikas Nigam Ltd and Euro Solar Power Pvt Ltd, the State would get 5 MW of power for supply in Sivlakha village in Bhachau taluka of Kutch district, a top company official told Business Line here.

Euro would set up solar photovoltaic-based power project and the requisite power injection system into Gujarat Energy Transmission Corporation Ltd grid, commensurate with the total energy supplied at common delivery point.