NEW DELHI: India will build the world's largest solar plant to generate 4,000 mw from sunlight near the Sambhar lake in Rajasthan that will sell electricity at an estimated rate of Rs 5.50 per unit.
The proposed solar project's capacity is about three times India's total solar power capacity and comparable with coal-fired ultra mega power projects of Tata PowerBSE -1.02 % and Reliance PowerBSE 0.21 %. "Being the first project of this scale anywhere in the world this project is expected to set a trend for large scale solar power development in the world," a government statement said.
It would be set up and run by a joint venture of five public sector utilities BhelBSE 1.12 %, Powergrid Corporation of India, Solar Energy Corporation of India, Hindustan Salts limited and Rajasthan Electronics & Instruments Limited, the statement said.
The first phase of the project, which would be 1,000 mw is expected to be commissioned in 2016. "Based on the experience gained during implementation of the first phase of project, the remaining capacity would be implemented through a variety of models," it said. The project would 23,000 acre of land out of which 18,000 acre would be provided by Hindustan Salts limited. The tariff is expected to be competitive.
"Government is considering a tariff of Rs 5.50 per unit of solar power generated for this project," said Ashwini Kumar, director (solar), solar energy corporation. Notably, Rs 5.50 per unit would be the lowest ever tariff for solar power in the country, which is expected to be the benchmark reference tariff for the upcoming phase of the national solar mission as well.
"We would route a part of the finance through viability gap funding, rest would be tied through power purchase agreements with power distribution companies," said Kumar.
The current cost of solar power in the country is around Rs 7 per unit. With the project setting the benchmark cost Rs 5.50 per unit, it is expected to bring down the cost of solar power further.
"Solar power at the rate of Rs 5.50 per unit would surely bring in buyers. Prior discussion with the government, distribution companies and ministry of finance have yielded that solar power at this rate is most viable for finance and purchase," said Amit Kumar, Associate Director (energy & utilities) at PwC.
Solar Energy Corporation is also trying to get a part of viability gap funding from national clean energy fund managed by the ministry of finance, said Kumar.
