On free fall, solar power tariff drops to Rs 3.15/unit

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On free fall, solar power tariff drops to unit

NEW DELHI: Solar powertariffs appear to be on a free fall in India, finding a new floor at a tariff of Rs 3.15 per unit quoted by Solairedirect in the auction for state-run generation utility NTPC’s 250MW at Kadapa in Andhra Pradesh.

This beats the previous low of Rs 3.30 per unit tariff, on a basic bid of Rs 2.97 a unit for the first year, quoted in February for the first unit of the 750MW Rewa solar park in Madhya Pradesh.

Solar power tariffs have been falling in the last three years due to the Narendra Modi government’s thrust on raising India’s green energy footprint and reduce oil imports by 10% by 2030. After coming to power in 2014, the Modi government metamorphosed the UPA’s National Solar Mission by setting a target of building 175GW of green energy capacity by 2030.

“Clean affordable power for all,” power minister Piyush Goyal tweeted as the new floor is nearly equal to the average tariff for coal-fired power supplied by NTPC and cheaper than electricity supplied by some private power producers.

But some industry players cautioned that the “hidden costs” of integrating such large-scale plants into grid should be considered when calculating the landed cost. According to them, gridconnected solar PV plants use transmission lines only 20% of the time compared to 70% by traditional plants, which makes it 3.5 times costlier to wheel solar power.

Also, operation of conventional plants will have to be ramped down or up to maintain supplydemand balance. This would result in lower plant load factors of conventional power station, which are expected to drop to 50% levels from current 60% levels. This in turn would push up the fixed cost component in the average cost of power.

As reported by TOI, solar tariffs had sunk to Rs 3 per unit quoted by Gurgaon-based Amplus Energy Solutions in auctions conducted by Solar Energy Corporation of India.

Source : http://timesofindia.indiatimes.com/business/india-business/on-free-fall-solar-power-tariff-drops-to-rs-3-15/unit/articleshow/58156592.cms

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