Govt’s solar park plan a lifeline for power transmission business

Analysts say Adding 50 ultra-mega solar parks to the 34 under-construction could be a Rs20,000 crore business opportunity for power transmission firms


Under the original 100 GW solar capacity addition plan, 20GW was to come from solar parks and 40GW each from roof-top projects and distributed power projects
Under the original 100 GW solar capacity addition plan, 20GW was to come from solar parks and 40GW each from roof-top projects and distributed power projects

New Delhi: The government’s decision last month to double solar park capacity to 40,000 megawatts (MW) in three years has opened up a new business opportunity worth up to Rs20,000 crore for power transmission companies.

Adding new 50 ultra-mega solar parks to the 34 under construction in 21 states, as decided by the cabinet on 22 February, will need to significantly widen the green energy corridor—the transmission network for the solar parks—an official at Solar Energy Corp. of India, a state-owned company in charge of implementing various solar power projects, said.

The ongoing Rs13,000-crore green energy corridor-II project connecting the 34 parks under construction and new transmission projects will be identified keeping in mind the location of the new parks, said the official, requesting anonymity.

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Transmission networks within the state where projects come up will be assigned to transmission utilities by the states, while inter-state projects will be assigned by the central government. Since construction of solar parks takes way less time than setting up a transmission corridor, transmission projects that need quick execution will be assigned to central or state transmission firms, while those for power plants that will come up at a later stage are likely to be auctioned as it affords sufficient time for a tariff-based bidding, an official in the power ministry said requesting anonymity.

According to I.S. Jha, chairman and managing director of Power Grid Corp. Ltd, which prepared the road map for the green energy corridor-II, not all the proposed new solar parks may come up at new locations and many could be in the solar and land resource rich states such as Madhya Pradesh, Rajasthan, Tamil Nadu and Gujarat, where such parks are already operating.

“The required additional transmission capacity may be a mix of inter-state and intra-state. In the case of a new solar park, generally, the cost of transmission comes to Rs50 lakh to Rs1 crore per MW, depending on location,” said Jha.

Under the green energy corridor project-II, 32 transmission projects—Rs8,041 crore of inter-state networks and Rs4,745 crore of intra-state network—are being constructed.

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Under the original 100 gigawatt (GW) solar capacity addition plan, 20GW was to come from solar parks which needed high-end transmission network and 40GW each from roof-top projects and distributed power projects, both of which require very limited transmission network. This has now been recalibrated to provide for 40GW of solar park capacity, merging with it a part of the planned distributed solar capacity.

According to Reji Kumar Pillai, president and chief executive officer of India Smart Grid Forum, a public-private partnership of the power ministry, the real challenge of integrating renewable energy into the gird is in the roof-top segment. Integration of renewable energy into the low-voltage distribution grid is a major engineering challenge for power distributors, whereas transmission utilities are better-equipped to manage integration of MW-scale solar plants and wind farms connected at high voltage, he said.

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