India to invite bids for 1 GW solar plant by March

Bharat Heavy Electricals Ltd. (BHEL), India’s largest power-equipment maker, plans to invite bids by March to build a 1-gigawatt solar plant as the government seeks to cut the cost of the technology by promoting large projects.

State-owned Bharat Heavy, leading a six-company joint venture, intends to auction a contract for the design and construction work in the next four months, said Tarun Kapoor, joint secretary at the Ministry of New and Renewable Energy.

India, which suffers from peak-hour power shortages of as much as 25 percent in some states, is starting a program of large-scale renewable projects to diversify its energy mix and reduce a current-account deficit exacerbated by fuel imports.

The country has proposed to build five so-called ultra-mega renewable parks comprising as much as 18 gigawatts in capacity over about 10 years, according to a ministry presentation obtained by Bloomberg News. That would expand India’s installed solar capacity ninefold.

“The main objective is to bring down the price of solar power,” Kapoor said at the Intersolar conference in Mumbai yesterday. “We want to bring it to about 5.5 rupees (8.6 cents) a kilowatt-hour so that it’s competitive with any other source of power.”

Bharat Heavy’s planned tender will award a contract for the first gigawatt of a proposed 4-gigawatt solar park at Sambhar, Rajasthan state. The remaining capacity will later be auctioned in 500-megawatt batches to non-state developers, Kapoor said.

Planned Parks

Separately, a 4.7-gigawatt renewable park is planned in Kharaghoda, Gujarat state, that would include 700 megawatts of wind power. Land for both parks has already been obtained from state-run Hindustan Salts Ltd., Kapoor said.

Other government plans include solar farms in northern Jammu and Kashmir state, and a solar park in Bhadla near Jodhpur in Rajasthan.

The target tariff of 5.5 rupees a kilowatt-hour for ultra-mega projects is 27 percent below the average cost of solar power in India today, according to Kapoor. It’s 32 percent below the global average, data compiled by Bloomberg show.

The new Solar Energy Corp. of India will be the sole buyer of electricity from the projects, according to the joint secretary. The state-run corporation applied to regulators last month for a license to trade power, which would allow it to buy and sell solar output across the nation.