Tata Power Co Ltd on Thursday said its unit Tata Power Renewable Energy Ltd had won two solar projects of 50 megawatt (MW) capacity each in Karnataka under the Jawaharlal Nehru National Solar Mission at a tariff of Rs.4.79 per kilowatt-hour (kWh).
The company has received a letter of intent to develop two solar grid connected photovoltaic projects in Pavagada Solar Park in Tumkur district, Tata Power said in a stock exchange filing. The firm will sell power from the projects to State-run NTPC Ltd’s unit, NTPC Vidyut Vyapar Nigam Ltd, under a 25-year power purchase agreement, it said.
“It (the project) fortifies our vision of generating 30-40 per cent of the company’s total generation capacity from non-fossil fuel sources by 2025,” Anil Sardana, CEO and Managing Director, Tata Power, said in a statement.
The Rs. 4.79/kWh tariff indicates that prices have been moving upwards after hitting record lows. Solar tariffs first fell to a record low of Rs. 4.63 per unit with SunEdison Inc’s bid in November and fell to Rs. 4.34 at a January e-auction conducted by NTPC in Rajasthan, won by Finnish utility Fortum.
Banks are not confident of lending for project bids aggressively, fearing high risks and low returns. “They are reluctant to lend to project bids below Rs. 5 per kWh,” Ashish Agarwal, Director-Infrastructure at investment bank Equirus Capital, said.
Fortum recently told The Hindu that the firm had analysed the results of the previous 12 tenders, both under State and Central programmes. After adjusting for solar radiation, solar park charges, domestic content requirement and open categories, five out of 12 times, the tariff had been lower than Rs. 4.34 with the lower tariff normalised at Rs. 4.04 a unit, it said.
