Recent rock-bottom bids in solar and wind power have changed the renewable power business, but viability of such projects is doubtful.
On the midnight of April 11, it was celebration time at the Paris headquarters of French clean energy firm Solairedirect SA. Their Indian arm had bagged a contract to build a 250 MW solar power plant at National Thermal Power Corporation’s, or NTPC’s, mega solar project at Kadapa in south central Andhra Pradesh. Prior to this, the Indian arm of Solairedirect was managing 182 MW projects in India – 97 MW operational and 85 MW under construction.
While it was a big win for the company, what excited many in India was the tariff – it promised to sell electricity at ₹3.15 per KWH. This is lower than the levelised tariff of ₹3.29 (₹2.97 a KwH in first year, with rise of ₹0.05 every year) quoted two months ago for the 3x250 MW Rewa Ultra Mega Solar project, for which Mahindra Renewables, ACME Solar Holdings and Solenergi Power had bid. That was 24 per cent less than the previous low of ₹4.34 a KWH, bid by Finland’s Fortum Finnsurya Energy in January 2016 for a 70 MW project in NTPC’s Rajasthan park.
Renewable power tariffs in India have been sliding for quite some time. In solar, the trigger has been sustained crash in prices of Chinese solar panels; the fall has been 80 per cent in the last seven years. In wind power also, the fall in tariffs has been steep. In the last auction, they had touched ₹3.46 a KWH.
Now, the question is — are these rock-bottom bids viable? Or will they make projects unsustainable and, finally, come to haunt both power companies and banks, just as what had happened in the conventional power sector a few years ago? Also, while the government’s targets for renewable power capacity are agnostic towards wind and power, is the fall in wind power tariffs sustainable or driven purely by the need to compete with solar power players, who are reaping the windfall of falling solar panel prices?
This story is from the May 07, 2017 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the May 07, 2017 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
"Focus on the challenge of each customer"
SHASHANK KUMAR MD & CO-FOUNDER I RAZORPAY Razorpay is India's first full-stack financial solutions company
PEDAL ON THE FUTURE
THE MG WINDSOR EV, WITH ITS FUTURISTIC AND MINIMALIST DESIGN, COMBINES THE BEST OF BOTH WORLDS-COMFORT AND TECHNOLOGY
BREATHE EASY
Whether you're battling allergies, looking to remove pollutants, or simply want to breathe easier, the right air purifier can make a difference
The Taste of India in a Glass
FROM ROYAL LIQUEURS TO DISTILLED MAHUA, INDIAN HERITAGE ALCOHOLIC BEVERAGES ARE HAVING THEIR DAY IN THE SUN
LOOK BEFORE YOU LEAP
IN 2025, INVESTORS WILL NEED TO FACTOR IN VOLATILITY ACROSS ASSET CLASSES
MISSING ADVISORS
INDIA HAS JUST ONE INVESTMENT ADVISOR FOR NEARLY EVERY 200,000 INVESTORS. AT A TIME WHEN RETAIL PARTICIPATION IN THE STOCK MARKETS IS BOOMING, THIS ASSUMES SIGNIFICANCE
TURNING A CORNER
SHARED ELECTRIC MOBILITY START-UP YULU'S SHIFT TO SERVICING THE QUICK COMMERCE SECTOR IS HELPING IT GROW FAST. IT IS NOW FOCUSSING ON IMPROVING ROAD SAFETY FEATURES AS IT TURNS EBITDA POSITIVE
REALITY CHECK
INDIAN STOCK MARKETS PLUNGED BEGINNING OCTOBER FOR A HOST OF REASONS, INCLUDING A FALL IN FII OWNERSHIP. HOW DEEP WILL THE CORRECTION BE?
TRUMP'S TRADE TANGO
The return of Donald Trump as the 47th President of the US has put the global economy on edge. India, too, is unlikely to remain unaffected. How will policymakers meet this latest challenge?
"The essence of the Trump administration will be transactional”
Global investor, analyst, and best-selling author Ruchir Sharma decodes why Donald Trump won the elections, what India should do, the risks, and more