Softbank May Finance 10,000 MW Solar Power Capacity In Indian State
India is planning to attract $100 billion of investment in its renewable energy sector over the next five years. Japan’s Softbank could make a significant contribution towards the achievement of that goal.
The state of Andhra Pradesh in India may attract investment worth billions of dollars from Softbank to fund its ambitious solar energy plans. The state government hopes to secure funding to install 10,000 MW (10 GW) of solar power capacity.
The government hopes that Softbank will invest in research facilities aimed at driving down the cost of solar power. In response to the recently floated 500 MW solar photovoltaic power projects tender, the state government received an overwhelming response with prospective developers willing to install almost 1.3 GW of capacity. The auction is part of the state’s plan to set up 5 GW of solar power capacity by 2019.
The lowest tariff quoted during the auction was 8.75 cents/kWh (for the first year) by First Solar, which secured the right to develop 40 MW of solar PV projects across the state. The state government is now looking to implement technologies that would cut this cost by about a fifth.
Currently, the state government is relying on economics of scale to push the costs down. The Solar Energy Corporation of India (SECI) will soon conduct an auction for a 1 GW ultra mega solar power project in Andhra Pradesh under the National Solar Mission. The project is among the first of 12 ultra mega solar power projects with cumulative capacity of 20 GW planned by the Indian government to be set up over the next five years.
If Softbank provides debt funding to cover 70% of the proposed capacity, the total investment could be close to $7 billion. It is important to note that the Japanese financial agencies are also willing to offer finance for 4 GW of ultra-critical thermal power plant in the state. The state has been struggling to meet the power demand as its gas-based power plants are sitting idle due to want of fuel.
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