India: Coal plants to subsidize solar
The Indian government has ordered state utility giant NTPC to sell
more expensive solar generated electricity with cheaper coal power as a single
unit in an effort to increase solar uptake. As part of the initiative, the NTPC
will build 15 GW of solar plants by 2019.
The government plan supports Indian
Prime Minister Narendra Modi's ambitious target of 100 GW solar capacity by
2022.
GE
The government of Indian Prime Minister Narendra Modi
has ordered state utility NTPC to bundle and sell electricity from coal-fired
power plants and solar farms to the grid -- a move aimed at making PV more
competitive, according to Bloomberg.
The order, issued on July 17, is expected to reduce the price
distribution companies pay for solar power and force them to purchase more
renewable energy.
"The lower price ensures the competitiveness of this power in
the wholesale market, thus easing the search for alternative buyers,"
Bharat Bhushan Agrawal, a solar analyst for Bloomberg New Energy Finance in New
Delhi, told the news agency.
The ruling makes it easier for India’s state-run distribution
companies, which have had difficulties covering the costs of electricity bought
in the market, to acquire solar power and support Modi’s ambitious target of
achieving 100 GW of solar capacity by 2022. India’s current solar capacity
stands at just over 4 GW. The NTPC is to build 15 GW of solar plants by 2019 as
part of the program, according to Bloomberg.
The government’s push to increase the use of solar power may meet
with opposition, however. Praveer Sinha, CEO and executive director of Tata
Power Delhi Distribution, told Bloomberg that distribution companies may resist
purchasing bundled power, pointing out that “the average cost of procurement is
already higher than the billing rate” and bundling coal and solar power would
increase prices.
Five coal plants in the country with a total capacity of 8,960 MW
will take part in the program. The Singrauli plant in northern India will be
the first to begin bundling its electricity with solar power. The 1.7 GW
plant’s output will be sold along with electricity from 3 GW of solar
installations, according to the Bloomberg report.
The news agency quoted A.K. Jha, chairman and managing director of
NTPC, who explained in an earnings call that, in the case of Singrauli, if the
present tariff was INR 1.80 ($0.0269), the combined tariff would be INR 3.12
($0.0467) or INR 3.15 (0.0471). Jha added, however, that bundled price might be
cheaper than the current market price of power from thermal plants.
Currently, the price of solar power in wholesale markets ranges
between INR 5 ($0.0748) and INR 6 ($0.0898).
Critics of the government
plan argue that it makes little sense to extend the lives of ageing coal-fired
plants in order to subsidize solar energy when PV is becoming increasingly
competitive on a stand-alone basis.
Original post: 07. SEPTEMBER
2015 | | BY: EDGAR
MEZA
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