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JAN 15 2015

Bundled tariff for power from solar, thermal plants likely to be Rs. 4.50/unit

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 15th JAN 2015

The Centre expects to keep the blended tariff of electricity generated from solar and thermal plants at about Rs. 4.50 a unit.

The Ministry of New and Renewable Energy (MNRE) has put out the draft guidelines for setting up 3,000 MW of grid connected solar photovoltaic (PV) capacity and bundling it with unallocated thermal power as part of National Solar Mission's Phase II (Batch II).

Today, solar power comes at Rs. 6-7 a unit and coal-based power, at Rs. 3.5-4.5/unit. This is the base rate - the price at which producers sell to distribution utilities.

NTPC Vidyut Vyapar Nigam (NVVN), the trading arm of NTPC, will purchase the solar power and bundle it with unallocated thermal power generated by NTPC. The bundling will be done on a 2:1 basis wherein 2 MW of solar power will be bundled with 1 MW of thermal power.

Competitive bidding

MNRE has proposed a competitive bidding mechanism and interested parties will have to submit a fixed levelised tariff bid for 25 years for selling the power generated from these plants to NVVN.

"The mix of thermal plus solar is bound to increase the blended tariff. But we propose to average it out to keep it within affordable limits. Though we expect the thermal rates to go up gradually, we are looking at putting a cap on solar tariffs for bundling purposes," a senior Government official said. The bundled power will be sold to willing State utilities under 25-year power sale agreements at a weighted average tariff of solar and thermal components plus trading margin of seven paise per unit (kWh). The bidding will be State specific and bidders will not be allowed to quote a tariff higher than the Central Electricity Regulatory Commission's approved applicable tariff.

Uniform sized projects

NVVN will also decide and divide the entire 3,000 MW into uniform sized projects with the minimum size being 10 MW and the maximum, 300 MW.

NVVN may also be asked to divide the bid lot into different size projects to match the plot sizes of solar parks.

The competitive tariff bid mechanism for solar was a part of the recommendations of the Advisory Group on Power, Coal and New and Renewable Energy under Suresh Prabhu.

It had said that bidding is required among various suppliers as renewable sources would need to compete with each other as well as other sources of energy.


NTPC Vidyut Vyapar Nigam Ltd. Sri Prabhu Lingeshwara Sugar & Chemical Ltd Grid Renewable Energy Coal Tariff NTPC Ltd Ministry of New and Renewable Energy Energy Electricity Regulatory Commission National Solar Mission Power Trading Electricity solar power Solar

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