Madhya Pradesh woos global investors with mega solar project

New Delhi: The world’s largest solar power plant, coming up in Madhya Pradesh, has caught the interest of clean energy companies from around the world.

Twenty leading firms, including Italy’s Enel Green Power SpA, SoftBank-promoted SBG Cleantech Ltd, Canadian Solar Energy Holding, Singapore3 Pte Ltd and Green Infra Wind Power Project Ltd, promoted by Sembcorp Industries Ltd, have expressed interest.

“The 20 firms will bid for three units of 250 megawatts (MW) each that make up the project in the second round of auctions to be held in about 10 days,” said a person with direct knowledge of the development, speaking on condition of anonymity. The first round of auctions was held earlier this month.

The 750MW plant is being set up in Rewa district by Rewa Ultra Mega Power Ltd, a joint venture between Solar Energy Corporation of India Ltd and Madhya Pradesh Urja Vikas Nigam Ltd. In the second round, companies will compete on the tariff at which they can sell power.

Shapoorji Pallonji Infrastructure Capital Co. Ltd, Torrent Power Ltd, Hero Future Energies Pvt. Ltd, ReNew Power Ventures Pvt. Ltd, Azure Power Global Ltd, Aditya Birla Renewables Ltd, Mahindra Renewables Pvt. Ltd and Orange Renewable Power Ltd are among the bidders.

A spokesperson for Sembcorp India said renewable power projects in India that are large scale and offer adequate coverage of payment and development risks will be attractive for long-term investors. “India is one of Sembcorp’s key markets and an integral part of the company’s emerging market strategy. We are constantly on a lookout for suitable opportunities in the country. However as a policy, we do not comment on any specific opportunities,” the spokesperson said in response to an emailed query.

India has over 8.5 gigawatts (GW) of solar power capacity and is targeting 100GW by 2022. Of this, 40GW will come from rooftop solar projects. With the renewable-power purchase obligations of power distribution utilities, falling prices of imported solar panels from China and concessional taxation on solar panels, the industry has been growing rapidly, resulting in falling tariffs and a boost for electrical equipment manufacturing and services.

According to a report issued this month by clean energy research firm Mercom Capital Group, renewable energy project development has changed significantly over the last quarter largely due to Chinese module price declines. “The average selling prices of Chinese modules in India have declined about 10% since August and by about 30% over the last 12 months. This has provided a much-needed boost to developers which won projects at low bids and were struggling to make project economics work,” said the report.

According to Ashish Khanna, executive director and chief executive of Tata Power Solar Systems Ltd, a stronger focus on solar panel and equipment manufacturing, better access to finance and streamlined import duties on panels and system components will go a long way in reaching the 100GW target.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.