Ahmedabad: Adani Power Ltd plans to set up two solar photovoltaic cell projects in Gujarat and Rajasthan that would produce 140 megawatts (MW) in three years.
Work has already begun on setting up a 40MW plant in Kutch, Gujarat, said Ravi Sharma, chief executive of Adani Power.
“The firm will commission its 40MW solar power project near Bitta village in Kutch district by December this year. We have already entered into a long-term power purchase agreement with the Gujarat government for this renewable power,” Sharma said. The plant’s capacity would be boosted to 100MW in two years.
“We aim to set up a solar power plant in Rajasthan with a capacity of 40MW,” he said.
“This project is still in the planning stages; so we cannot tell the exact location, but the plant is likely to come up in the next three years,” he added.
Sharma declined to specify investment details for these projects.
“Solar power generation is currently in the initial stages in India. Currently, cost of setting up a photovoltaic solar power project stands at around Rs 18 crore per MW in India, which is quite higher than the coal-fired power plant, which costs Rs 3-5 crore per MW,” said an analyst who tracks the power sector for a domestic brokerage, requesting anonymity.
At this cost, Adani Power will have to spend Rs 2,500 crore to produce 140MW, the analyst said.
But the prices companies charge for producing power using renewable resources are also high because of incentives provided by the Union and state governments, making it easier to recover expenses.
In January 2009, Gujarat announced a policy to promote solar energy, fixing a tariff of Rs 15 per kWh for developers using solar photovoltaic technology, and Rs 13 per unit for utilities running on a solar thermal platform—both for 12 years.
After that, Gujarat Urja Vikas Nigam Ltd will pay Rs 5 per unit to the utilities for the next 13 years.
The Union government, in its solar policy, has also fixed higher tariffs of Rs 17 and Rs 15 for 25 years for solar photovoltaic and solar thermal power, respectively.
“In future, more firms are likely to enter solar power generation,” said the analyst mentioned above. “However, the firms that have already forayed in solar power generation will have first movers’ advantage.”