‘So­lar Tar­iffs at .₹ 3 a Unit May be the New Nor­mal’

NTPC chief says the price can be achieved with­out ‘cheap funds’ or com­pro­mis­ing on qual­ity

The Economic Times - - Companies: Pursuit Of Profit - Ra­chita.Prasad@ times­group.com

GURDEEPSINGH Chair­man, NTPC We are align­ing our busi­ness such that our in­cre­men­tal ca­pac­ity is more in re­new­able and less in coal. We are quite con­fi­dent of adding 25 GW for re­new­able en­ergy

Mum­bai: NTPC chair­man Gur­deep Singh said ₹ 3-3.20 a unit tar­iff for so­lar power may be the new nor­mal and can be achieved with­out the sup­port of “cheap funds or cheap pan­els”, which have been a con­cern for the in­dus­try.

So­lar and wind en­ergy units gen­er­ate less than 10% of the global elec­tric­ity out­put and have re­mained on the side-lines his­tor­i­cally as these projects were taken up to ful­fill a so­cial re­spon­si­bil­ity to­wards clean en­ergy.

But these green en­ergy sources have seen a de­cline in prices mak­ing them com­pa­ra­ble to con­ven­tional en­ergy and caus­ing a dis­rup­tion in the power sec­tor. In­dia too has rapidly scaled up its re­new­able en­ergy ca­pac­ity, led by so­lar power in the last few years. But the steep fall in tar­iff has trig­gered con­cerns over pro­ject vi­a­bil­ity. “We should be happy with lower so­lar bids, es­pe­cially when the process is done in such a trans­par­ent man­ner. In the cur­rent en­vi­ron­ment, so­lar power tar­iff would be ₹ 3-3.20 a unit with­out re­ly­ing on cheap funds or com­pro­mis­ing on qual­ity,” Singh said. The Par­lia­men­tary Stand­ing Com­mit­tee on en­ergy gave crit­i­cal feed­back on the so­lar en­ergy sec­tor, ask­ing the gov­ern­ment to help de­vel­op­ers raise funds but has also raised con­cerns over the vi­a­bil­ity of these projects given the steep fall in tar­iff as a re­sult of ag­gressi- ve bids by de­vel­op­ers.

The so­lar power tar­iff plum­meted to its low­est level in May at ₹ 2.44 per unit en­ergy in the auc­tion for 500 megawatt (mw) of projects in Ra­jasthan. The tar­iff was about ₹ 11 seven years ago. While Singh did not com­ment on the vi­a­bil­ity of pro­ject that are of­fer­ing so­lar power at ₹ 2.44, he said so­lar en­ergy would play an im­por­tant role in in­cre­men­tal ca­pac­ity ad­di­tion in the coun­try but coal based-power would con­tinue to be nec­es­sary to en­sure cheap and con­tin­u­ous power sup­ply to con­sumers.

“We are align­ing our busi­ness such that our in­cre­men­tal ca­pac­ity is more in re­new­able and less in coal. We are quite con­fi­dent of adding 25 gi­gawatts for re­new­able en­ergy,” Singh said. NTPC has com­mis­sioned 847 MW or re­new­able en­ergy ca­pac­ity, has 73 MW un­der ex­e­cu­tion and an­other 1,275 MW un­der ten­der­ing process. The com­pany’s target is to de­velop 10 GW of re­new­able en­ergy as a com­mit­ment to the gov­ern­ment. It is also de­vel­op­ing an­other 15 GW un­der Na­tional So­lar Mis­sion (Phase 2).

NTPC is the only power gen­er­a­tor in­vest­ing in con­ven­tional en­ergy and its or­ders are be­ing chased by power equip­ment ma­jors like BHEL and L&T.

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