French energy utility Engie announced major progress in India regarding its renewable energy business in India this month. The company has seen rapid growth in the highly competitive wind and solar power markets in India.
Solairedirect, a subsidiary of Engie operational in India, started commercial operations of a 101 megawatt (DC) solar PV project in the state of Uttar Pradesh. The project has an AC listed capacity of 75 megawatts. The company had secured the rights to develop the project under the federal solar power policy at a tariff of Rs 4.43/kWh (6.8¢/kWh) in June 2016. The company will sell electricity to the Solar Energy Corporation of India (SECI) for a period of 25 years.
The project was launched jointly by the Indian Prime Minister Narendra Modi and the French President Emmanuel Macron following the conclusion of the first-ever summit of the International Solar Alliance in New Delhi earlier this year.
The company also commissioned a 190 megawatt (DC) project in Rajasthan. The project is actually split in two projects, each having an AC listed capacity of 70 megawatt each. The projects are located in the famous Bhadla solar power park which will be home to India’s cheapest solar power projects in a few months. Solairedirect had bid for the projects at Rs 4.35/kWh (6.4¢/kWh) for these projects which was a competitive bid at that time.
Solairedirect finally signed the power purchase agreement for a 338 megawatt (DC) solar power project to come up at the Kadapa solar power park in the state of Andhra Pradesh. The company has placed a bid of Rs 3.15/kWh (4.8¢/kWh) in April last year. The bid was the lowest for any solar power project in India at that time.
The project, with AC capacity of 250 megawatts, faced several delays as the power distribution utilities in Andhra Pradesh initially refused to sign a power purchase agreement (PPA), claiming that they do not require any additional solar power. But as we analyzed earlier, that was not true. The utilities have now agreed to sign the PPA reportedly after NTPC Limited (the company that floated the tender) agreed to ‘bundle’ thermal power with the solar power generated from the project. This would further reduce the price Andhra Pradesh utilities pay.
Engie also won rights to develop wind energy projects in the states of Gujarat and Tamil Nadu. The company will develop 80 megawatts of capacity which it secured through competitive auctions.
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