Indian Economy News

NTPC aims to install 5,000 megawatt of solar power capacity in two years

New Delhi: NTPC, India's biggest power generator, aims to set up 5,000 mw solar capacity in the next two years. This is a third of its target of installing 15,000 mw over the next seven years and spells an over fiftyfold jump from the current solar capacity.

The state-run company is clear that states will have to come on board for procuring solar energy for it to take off as per plan, as it maintains that coal will remain the base fuel for power generation in India for many years to come.

"In two years, we'll do 5,000 mw of solar power from 95 mw now. Only if states are willing to buy it from us we'll put solar, else not," said NTPC chairman and managing director Arup Roy Choudhury.

In February, the Union Cabinet had given its nod to NTPC ( National Thermal Power Corporation) to set up this magnitude of solar capacity in three tranches. The first tranche of 3,000 mw is supposed to be set up under a mechanism of 'bundling' two units of solar with one unit of unallocated thermal power so as to bring costs down.

"Bundling is necessary so that people get used to buying clean power in some way as it would bring price of solar energy down," Choudhury added.

NTPC officials had earlier raised a two-pronged problem in executing the 15,000 mw target - one, non-availability of unallocated thermal power for bundling, and two, even after bundling the high cost of solar energy remains unattractive for buyers, mainly states.

Choudhury is clear that NTPC will set up solar plants only after signing power purchase agreements or PPAs with states.

As far as bundling is concerned, Choudhury plans to use 6,000 mw of unallocated energy, which, at 15% of NTPC's total generation, is the power ministry's quota.

NTPC has a capacity of 44,398 mw, accounting for 17% of the country's total power generation capacity of 255,012.79 mw.

Prime Minister Narendra Modi had last year increased India's clean energy generation target to 170 gigawatt to be achieved by 2022. This includes 100 gigawatt of solar energy, 60 gigawatt of wind and the rest a mix of hydel and biomass.

A thousand megawatt equals one gigawatt.

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