Construction of world’s Largest Solar Tender in India
The Indian govt. has planned to arrange a solar tender for setting up 20 gigawatts (GW) of solar power capacity. After its implementation, it will become world’s largest solar tender. According to the reports, this tender is an attempt to prompt domestic manufacturing of solar power equipment.
If everything goes as planned, there are multiple advantages for the country including the chances of solar tariffs crashing down significantly. Promoting “Make in India” plans by the National Democratic Alliance (NDA) is also a plus point, should the tender become a success.
India is making vast, defined steps in order to make its citizens aware of the exhaustion of natural resources. Employing solar tender is only one of many ways India is trying to curb the crisis.
Gaias Homes contribute a great portion to help India by building more than 150 homes a month which will utilise minimal natural resources. The homes accommodate solar panels to supply power, thus keeping sustainability in check.
The need for such projects increases day by day and when it comes to the solar tender project, India has a target of 175 GW of clean energy by the year 2022. Yet, it was reported that Indian solar power developers sourced their solar equipments and modules from countries like China, where they were supplied at a cheaper rate. The consequence of such action was a decrease in the domestic manufacturing of the same.
This urged the govt. to make strict actions and promote “Make in India”.
“We are planning to introduce the idea of mega bids to boost solar equipment manufacturing in India. This may also result in a substantial reduction in tariffs,” a senior government official who requested anonymity.
As and when the tender works out, the ministry of new and renewable energy (MNRE) would be presenting contracts as awards to developers who bid for the lowest price which they will sell electricity in the auction process for the grid-linked capacity. The projects are expected to be commissioned in phases.
“The tender is being conceptualized by MNRE. These contracts will be awarded in one go with developers to construct projects in phases. Once people see visibility of such projects, then manufacturing can kick in,” said an anonymous second person aware of the development.
The solar panels and modules add up to almost 60% of the estimated total expenditure of the solar power projects. That is, for instance, if a total solar power project costs around $100,000, then the solar panel required for the same would cost around $60,000. That is where China comes in. Chinese solar manufacturers find their major clients in US, India and China itself. And the Chinese solar modules have an estimated capacity of 70 GW per annum.
Solar tariffs fell to a record low of Rs.2.44 (0.037439 USD) per kilowatt hour (kWh) in May, and firmed up to Rs.2.65 (0.04066 USD) per kWh in a bidding auction by the Gujarat government in September. These tariff levels are much lower than the average rate of power generated by coal-fuelled projects of India’s largest power generation utility, NTPC Ltd.
“The mega tender has been in discussions. For it to be effective, a holistic view needs to be taken with reference to land availability and the evacuation of the electricity generated,” said another government official.
Raj Kumar Singh, minister for power and renewable energy, has announced that 20GW of wind and solar power contract, each will be auctioned to help India achieve its much awaited target of clean energy by 2022. “It is a good plan but will face the challenges of who will sign the PPAs (power purchase agreements) of this quantum? That has to be planned,” said the second person cited earlier. The challenges so far are namely evacuation of power and issues with land.
The solar industry is excited to see this project rise in success and hopes to see these problems addressed. Sanjay Aggarwal, managing director at Forum India Pvt. Ltd. expressed his views by adding…
“It is a great move. Bidding pipeline has gone dry for quite some time and this is very much welcome. This reinforces the government’s commitment to solar… I would also hope that issues related to land acquisition, electricity evacuation and PPAs are simultaneously addressed.”
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