Uncertainty Looms At India’s Largest Solar Power Park As 1.2 Gigawatts Is Tendered

Confusion and uncertainty is looming over the execution of India’s largest solar power park at Pavagada in Karnataka, southern India. The park is facing multiple issues related to tariffs and domestic content requirements, which is now in violation of a September 2016 WTO ruling.

A little background: The Pavagada solar power park is expected to have an eventual installed capacity of 2.7 gigawatts, however, information on how this capacity will be distribution among various stakeholders is available only for 2 gigawatts. Official records at Ministry of New & Renewable Energy still quote 2 gigawatts of solar power capacity for the park. 

Initially, this 2 gigawatts of capacity was allocated as 600 megawatts under a bundled solar-thermal program, 1,000 megawatts owned directly by NTPC Limited, 200 megawatts for Solar Energy Corporation of India for a storage project, and 200 megawatts for Karnataka Renewable Energy Development Limited (KREDL).

NTPC Pulls Out

According to media reports, NTPC has pulled out of the 600 megawatts of capacity bundled under the solar-thermal program. The capacity has been allocated to six developers in a tariff range of Rs 4.79/kWh (¢7.5/kWh) to Rs 4.86/kWh (¢7.6/kWh). NTPC was supposed to procured electricity from these projects at these tariffs and bundle it with thermal power from its own power plants, and then sell it to Karnataka-based utilities at Rs 3.30/kWh (¢5.2/kWh). However, NTPC has now backed out of this arrangement now citing various reasons. There is no word on the future of these projects — whether NTPC or Karnataka will procure from these projects and at what tariffs.

1.2 Gigawatt Tender By KREDL

NTPC was supposed to issue a tender for 1,000 megawatts of capacity as its direct share in the solar power park. However, the Karnataka Renewable Energy Development Limited recently issued a tender for 1,200 megawatts of capacity. This exhausts the capacity allocated to KREDL and also overlaps with NTPC’s 1,000 megawatt capacity. This tender also casts uncertainty over the fate of a 750 megawatt tender that NTPC has issued last year for the solar park. KREDL also tendered 200 megawatts of capacity in November 2017 for the project.

At this moment, Pavagada has four tenders open — 1.2 gigawatts issued by KREDL, 750 megawatts issued by NTPC, 200 megawatts issued by KREDL, and 200 megawatts issued by SECI. Combined, these tenders account for 2,350 megawatts of capacity. If we add the 600 megawatts of capacity already allocated to developers, the capacity increases to 2,950 megawatts, as against the current official capacity target of 2,000 megawatts and unofficial capacity target of 2,700 megawatts.

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A young solar enthusiast from India keeping an eye on all regulatory, policy and market updates from one of the fastest emerging solar power markets in the world.