India’s first utility-scale solar power project equipped with storage capacity has been allocated in the islands of Andaman and Nicobar.
According to media reports, the first battery-equipped solar power project in India has been allotted to Mahindra Susten. The company secured the project following a tender and auction organized by the public sector company NLC Limited. The project will have an installed capacity of 20 megawatts, equipped with a storage capacity of 28 MWh. The project is expected to be commissioned within 18 months from the start of construction.
Mahindra Susten had quoted a bid of Rs 288 crore ($44 million) for the project. The cost is more than twice that of the large-scale solar power projects not equipped with storage facilities. Apart from the untested storage technology, the remoteness of the Andaman & Nicobar Islands would have contributed to the high cost. Port Blair (capital of Andaman & Nicobar) is around 1,200 kilometers away from the nearest major port on Indian mainland.
Mahindra Susten will receive a Rs 100 crore ($15 million) grant from the government for setting up the project. However, the company states that even without the grant the cost of generation would be around Rs 8/kWh (12¢/kWh) which is 60% cheaper than the cost of generation from diesel generation, the primary power source on the islands.
This was the first time a storage-equipped solar power project of this scale has been awarded in India. Earlier, Solar Energy Corporation of India cancelled two such tenders after it received high bids.
SECI had announced two tenders for implementing battery storage with solar power projects – 200 megawatts project at Pavagada solar power park in Karnataka and 100 megawatts project at Kadapa solar power park in Andhra Pradesh.
Project developers were asked to provide 2.5 megawatt-hour for every 50 megawatts capacity installed. Both the tenders involved viability gap funding mode. Participants had to bid for the lowest capital cost support required to set up the projects. SECI was willing to provide a maximum of ₹1 crore per megawatt as support.
Additionally, NTPC Limited — India’s largest power generation company — had announced a tender to set up a 50 megawatt project with storage facility in Andaman & Nicobar Island. The company already operates a solar power project in the islands. This tender, too, was eventually cancelled.