Introduction

Solar power in MP to cost one-fourth of current rates

  • Client

    New and Renewable Energy Department, Madhya Pradesh

  • Services

    To explore strategies for development and deployment of renewables.

  • Technologies

    Solar Energy

  • Dates

    06/10/2018

Description

Madhya Pradesh has set a historic benchmark in solar power tariffs in the country by having the lowest rate of Rs 1.38 per unit for the first year in Central Government buildings, which is one-fourth of what the consumers are presently paying.

 

State Government Medical Colleges, also a beneficiary in the tender, has got a rate of Rs 1.63 per unit for the first year. The rates would increase by 3 per cent annually and would roughly double at the end of 25 years. These rates will set new standards in the solar rooftop sector.

 

The RESCO- 2 tender issued by Madhya Pradesh Urja Vikas Nigam attracted Nine (9) international and domestic bidders, who oversubscribed its 8.6 MWp rooftop tender capacity by more than 630 per cent.

 

The results were announced in an innovative ceremony held on the sidelines of RE-Invest 2018, a global platform to explore strategies for development and deployment of renewables. The bid results were opened live in front of an audience comprising senior officials from the Ministry of New and Renewable Energy, the World Bank, Madhya Pradesh Urja Vikas Nigam and IREDA, as also prospective bidders and procurers. With the announcement of the winning bids, the work orders were issued and Power Purchase Agreements (PPAs) were signed immediately thereafter.

 

Speaking on the occasion, Manu Srivastava,– Principal Secretary, New and Renewable Energy Department, Madhya Pradesh said, “Madhya Pradesh’s RESCO model enables organisations to adopt Solar Energy without making any capital investment whatsoever. Further, they get power at a fraction of what they are paying today. The most remarkable feature of today’s event was that the financial bid was opened publicly and it was immediately followed by issuance of the work order and signing of the PPA, which often takes indeterminate amount of time.”

 

The saving on account of RESCO tender in the first year itself is over Rs 7 crore and would increase in the subsequent years.

 

The RESCO- 2 tender builds on the numerous policy, contractual and procedural innovations from the RESCO 1 tender, including some emanating from the learnings of the Rewa project, which has made this low tariff possible.

 

Further, issuance of work order post the opening of financial bids and signing of PPA takes a substantial time and has certain inherent uncertainties. Hence, immediately after the opening of the bid, work order was issued to the winning parties and PPA’s were signed. This made the process extremely transparent, trustworthy and prompt.

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