Tata Power Planning India's Largest Solar PV Power Plant with 50 MW Capacity

July 11th, 2010 by Mridul Chadha

Tata Power, a subsidiary of the famous Tata Group, is planning to set up India’s largest solar PV power plant with a generation capacity of 50 MW. The company will set up this plant in Mithapur, Gujarat.

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Tata Power is working on several projects to expand its generation capacity and even though most of those projects are directed towards coal-based power generation, the company has made significant progress as far as adding renewable energy sources to its portfolio is concerned. The company has announced massive expansion of its solar-based power generation in addition to several large and micro-scale wind energy generation schemes.

The project in this case would probably be used both for captive and export purpose. A part of the power generated would probably be used by the manufacturing plants of other subsidiaries of the Tata Group while the rest could be fed into the national grid.

In the last few months several private as well as government-controlled companies have announced renewable energy-based power plants. Since the National Solar Mission — aimed at installing 20,000 MW by 2020 — has been initiated by the government many companies have been attracted by the subsidies offered.

Several factors responsible for the sudden increased interest in the renewable energy sector include: rising demand for power, government regulations that require increased generation from renewable energy sources and potentially millions of dollars subsidies at offer.

Power generation even through conventional fossil fuels is not very profitable in India. There is shortage of coal, natural gas prices have been increased and with the recently unveiled coal tax of about $1 per tonne of coal used the generation companies are set to see a further decline in their revenues. Renewable energy-based power generation, on the other hand, is quite attractive with the incentives offered by the government.

Solar energy-based power plants enjoy added benefits as compared to other renewable energy-based power plants and conventional power plants. A solar based plant can sell power to the grid at a much higher rate as compared to a wind farm and coal/gas based power plants. The central as well as state governments offered subsidies on the import of equipment required for solar cell manufacturing and power generation. All power plants are recognized as infrastructure projects and thus enjoy tax holiday for up to ten years from the start of production. In addition, project developers can sell electricity to power exchanges at high rates which gives them the flexibility. Recently, the central government announced the solar energy securities fund which would compensate the project developers if the power distribution companies fail to pay the high tariff rates.

This is the reason why many private investors and even government-controlled oil companies are looking to invest in the solar energy sector. The Indian government is taking commendable steps in ensuring that the thrust for the expansion in the solar energy sector is backed strongly by the market and only through regulations. Hopefully, with the growing attraction of the private investors the sun would shine soon on the solar energy sector in India.

Image Credit: pixor at Flickr (Creative Commons)

The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degree.

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Tags: India, National Solar Mission, Solar Subsidies, Tata, Tata Power

About the Author

Mridul Chadha currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.

avi

All state electricity boards will go bankrupt ! solar tariff is 11 rs to 15 rs a unit. combined with distribution and other losses it will become 18-20 rs a unit people pay hardly 2 – 5 rs a unit ; now govt will fund the difference of 15 rs a unit ! very very expensive use of tax payer’s money ! solar is green though….
- Shih
  
  AVI, You got to start some where. There are place in the US whereby feed in grid is 6 times more that the grid price. Solar pricing will go down with time. Oil price will only go up. It is better to suffer now and later. What do you think will happen if nothing is done and the oil prices keep going up?
TKS

Does anyone know how successful existing solar power plants are in India?
http://www.KnowledgeSystemsAndServices.in Satish Joshi

Although all available data shows that Solar PV power is economically not viable without government subsidy, probably only Tatas can attempt it. I read about another forthcoming Tata initiative of bringing wind energy to everybody’s doorstep. They are planning to bring small wind powered generators in the market, through Tata BP Solar, for residential use. Another Nano in the making!
mayank vishnoi

I am aware of more than 2000MW of pipeline by private sector where more than 10 corporate houese are interested in more than 50MWs

I believe lot of announcements with no action on ground.
ROHIT KUMAR

Tata Power initiative is a harbinger for many such projects in the future and hopefully many other big companies will provide required thrust to achieve the Naional Solar mission target.
http://www.motornature.com/ elji

Great news! We’ve already seen electric prototypes from Tata, and there’s hope we’ll see a production model next year. So Tata will do it all: electric cars, and the green electricity to power them.