GOVT TO INVITE BIDS FOR 20GW SOLAR POWER CAPACITY

NEW DELHI: India plans to invite bids for setting up 20 gigawatts (GW) of solar power capacity— the world’s largest tender at one go—in an attempt to spur domestic manufacturing of solar power equipment. The effort will help further lower solar power tariffs and provide a boost to the government’s Make in India plans.

Most solar power developers in India have been sourcing solar modules and equipment from countries such as China, where they are cheaper. This has resulted in domestic manufacturers accounting for only around 10% of the market despite India having an ambitious 175GW clean energy target by 2022, of which 100GW is to come from solar projects.

“We are planning to introduce the idea of mega bids to boost solar equipment manufacturing in India. This may also result in a substantial reduction in tariffs,” a senior government official said on condition of anonymity.

According to the contours of the tender being worked out, the ministry of new and renewable energy (MNRE) plans to award these contracts to developers who will quote the lowest price at which they will sell electricity in the auction process for the gridlinked capacity.

The projects are expected to be commissioned in phases.

Solar modules, or panels, account for 60% of a solar power project’s cost. For China’s solar panel manufacturers, with a capacity estimated to be 70GW per year, the major markets are the US, India and China itself.

Solar tariffs fell to a record low of ₹2.44 per kilowatt hour (kWh) in May, and firmed up to ₹2.65 per kWh in an auction by the Gujarat government in September. These tariff levels are lower than the average rate of power generated by coal-fuelled projects of NTPC.

Queries emailed to an MNRE spokesperson remained unanswered.