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Solar power: All eyes on Tamil Nadu

According to reports, a leader in wind energy, Tamil Nadu is all set to claim at least the No. 2 slot among Indian states (after Gujarat) in solar power, as the State is gearing up to signing power purchase agreements for 698 MW.

Hopes for early signing of PPAs with solar power project developers have been raised after officials of the Tamil Nadu Generation and Distribution Company (Tangedco), held separate meetings with 53 developers last Thursday.

These developers had won rights to put up solar plants and sell electricity to Tangedco for Rs 6.48 a kWhr (with 5 per cent annual escalation for ten years) — a tariff that was discovered through a bidding process earlier this year.

Tangedco officials have told developers to expedite matters. Get land in hand, submit the required ‘bank guarantee’, we will sign the PPA the next day, they told the developers.

A senior official of Tangedco told Business Line that land possession documents had not been received only for about 75 MW. He expressed confidence that the State would see 600-700 MW of solar power capacity in one year.

As was evident at the 7th Renewable Energy India 2013 held in Delhi last week, the solar industry is watching the Tamil Nadu scene keenly, given that the State’s solar programme is the largest among the ongoing programmes in India.

The Phase-II of the Jawaharlal Nehru National Solar Mission, which was to kick-off with a bidding round for 750 MW of capacity, is with the Cabinet and it may be quite a while before it is rolled out.

Karnataka and Punjab have their programmes under way, but are relatively smaller — 130 MW and 300 MW, respectively. Andhra Pradesh, after an aborted bid to start a bidding process for 1,000 MW, has recently come up with an open offer — anybody could put up a solar project, if he is ready to sell the power to the State for Rs 6.49 a unit for 20 years.

Meanwhile, the going is getting tougher for solar developers as the costs have been going up.

Pashupathy Gopalan, Managing Director, SunEdison, says that rupee depreciation raises project costs by at least Rs 50 lakh per MW. Solar module prices have also gone up in the last few months and could raise capital costs by not less than Rs 12 lakh per MW. On the overall, project costs have gone up by 7-8 per cent, while the tariffs have remained low.

“It is going to be very hard to make it work,” says Gopalan.

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