NTPCBSE 1.19 % chairman Gurdeep Singh said Rs 3-3.20 a unit tariff for solar power may be the new normal and can be achieved without the support of “cheap funds or cheap panels“, which have been a concern for the industry.
Solar and wind energy units generate less than 10% of the global electricity output and have remained on the side-lines historically as these projects were taken up to fulfill a social responsibility towards clean energy.
But these green energy sources have seen a decline in prices making them comparable to conventional energy and causing a disruption in the power sector. India too has rapidly scaled up its renewable energy capacity , led by solar power in the last few years. But the steep fall in tariff has triggered concerns over project viability. “We should be happy with lower solar bids, especially when the process is done in such a transparent manner. In the current environment, solar power tariff would be Rs 3-3.20 a unit without relying on cheap funds or compromising on quality ,“ Singh said.
The Parliamentary Standing Committee on energy gave critical feedback on the solar energy sector, asking the government to help developers raise funds but has also raised concerns over the viability of these projects given the steep fall in tariff as a result of aggressive bids by developers.
The solar power tariff plummeted to its lowest level in May at Rs 2.44 per unit energy in the auction for 500 megawatt (mw) of projects in Rajasthan. The tariff was about Rs 11 seven years ago.
While Singh did not comment on the viability of project that are offering solar power at Rs 2.44, he said solar energy would play an important role in incremental capacity addition in the country but coal based-power would continue to be necessary to ensure cheap and continuous power supply to consumers.
“We are aligning our business such that our incremental capacity is more in renewable and less in coal. We are quite confident of adding 25 gigawatts for renewable energy,“ Singh said.
NTPC has commissioned 847 MW or renewable energy capacity , has 73 MW under execution and another 1,275 MW under tendering process. The company’s target is to develop 10 GW of renewable energy as a commitment to the government. It is also developing another 15 GW under National Solar Mission (Phase 2).
NTPC is the only power generator investing in conventional energy and its orders are being chased by power equipment majors like BHEL and L&T.