Probably tired of the unending petitions with the regulatory bodies to increase tariffs for coal-based power plants, one of India’s largest private power generation companies, has decided to make a major transition to solar power.
Reliance Power owns 3 coal mines in Indonesia through a subsidiary. The mines were supposed to be supply coal for an ultra mega power plant that the company had successfully bid. Work on the 3,960 MW power plant at Krishnapatnam has now stopped as the company expressed its inability to supply power at the low price it had bid during the auction.
The company has stated that coal prices have risen significantly due to policies enacted by the Indonesian government. Power utilities across the country are against revision of the power purchase agreement at a higher cost. Thus, the project lies in shambles, and the company is now planning to sell the mines.
Reliance Power also exited from the Tilaiya UMPP after waiting 5 years for the required approvals.
Meanwhile, the Indian government announced a huge target of 100 GW installed solar power capacity by 2022. Reliance Power is now looking to make a switch to solar power. It signed an agreement with the state government of Rajasthan to set up 6 GW solar power capacity. The company already operates a large solar photovoltaic (PV) power plant and one of the handful concentrated solar thermal power projects in India.
The company will also participate in the scores of competitive auctions lined up under the central and state government policies.
The company seems to have realized that the cost of coal-based power is going to increase and may also remain uncertain as it is heavily dependent on international events and market situation. And it is not easy to convince the power regulators to revise the power price, especially when the utilities are reeling under debts of billions of dollars.
Reliance Power now operates one UMPP at Sasan. However, the company recently asked a government-entity to take over the project after allocation of a coal mine associated with the project was cancelled by the Supreme Court of India as a fallout of the coal mine allocation scam under the previous government.