Still No Takers For One Of India’s Cheapest Solar Projects

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Solairedirect, an international solar developer backed by French energy major Engie, is currently behind schedule for setting up a 250 megawatt solar power project in the Indian state of Andhra Pradesh as there are no buyers identified for the power to be generated.

According to media reports, NTPC Limited — India’s largest power generation company and owner of the solar park where the 250 megawatt project is scheduled to come up — is still looking for final buyers of the electricity from the project. The project was allocated to Solairedirect in April of this year at a record-breaking tariff of Rs 3.15/kWh (4.8¢/kWh).

By convention, the power utilities of Andhra Pradesh were suppose to sign a power purchase agreement with NTPC to procure electricity from the project. However, these utilities have already contracted a large volume of solar power from the projects they themselves have auctioned under the state government’s policy; NTPC allotted the 250 megawatt project under the central government’s policy.

The two power utilities in Andhra Pradesh stated that they do not require any additional solar power at the moment as they have enough to meet their renewable purchase obligation, and that NTPC should look for new buyers. As a result, Solairedirect has been been officially awarded the project.

It is highly surprising that even after nearly six months NTPC has not been able to contract a buyer for the project, as the tariff of Rs 3.15/kWh (4.8¢/kWh) is one of the lowest solar power prices in India and is also cheaper than most of thermal power plants in India. The average tariff of thermal power plants owned by NTPC itself is Rs 3.20/kWh (4.9¢/kWh).

The development may also cast doubts over the future of the Kadapa solar power park development. According to the Solar Energy Corporation of India, Kadapa solar park will have an installed capacity of 1 gigawatt.

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