We recently covered a story about the Indian government planning to set up large-scale renewable energy parks through public sector companies to speed up the renewable energy capacity addition. The government of India has now revealed new details about this program.
According to media reports, the government is planning to facilitate implementation of solar power parks across the country with each project having a capacity of 2 gigawatts. The solar and wind energy parks shall be implemented under the ultra mega renewable energy power parks program. The capacity proposed for each park earlier was believed to be 1.8 gigawatts.
Large publicly-owned power sector companies are likely to be given targets under this scheme to work closely with various state governments to set up solar power parks. States with high solar and wind energy resources, like Jammu & Kashmir, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, and Madhya Pradesh are expected to be covered under this program.
While similar programs have been announced and partially implemented in the recent past, the government is looking to ensure a high rate of success this time. The government will reportedly offer incentives to ensure cooperation from state governments and to attract investors and developers.
We had mentioned in the earlier article that state governments shall receive annual revenue linked to the generation from these renewable energy parks. Government documents reviewed by business daily Mint reveal that states could earn annual revenue at the rate of Rs 20 (US$0.28) for every megawatt-hour of energy generated at these parks.
Additionally, the separate companies these public sector companies set up for implementation of the renewable energy parks shall also receive revenue at the same rate.
The heavy presence of government institution in this program is being seen as an attempt to boost confidence among developers and investors. Bureaucratic delays, especially in the matters of implementation of new transmission infrastructure, and fluctuating policies by states like Gujarat and Andhra Pradesh with respect to allocation of new capacity and treatment of operational power purchase agreements, have had stakeholders in the private sector on the edge for a while.
Companies with significant experience in the development of renewable energy projects are expected to take a leading role under this program. These companies could include NTPC, NLC India, Power Finance Corporation, Rural Electricity Corporation, Power Grid of India, and NHPC. Regional companies focused on hydropower generation are also expected to be roped in by the government for this initiative.
Recently, NTPC announced plans to set up solar power parks in the states of Rajasthan and Gujarat, while NHPC issued its first large-scale solar power tender offering 2 gigawatts of capacity to developers.
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