Dec 28 2010
Tata Power has entered into the nation’s fast growing solar energy segment by signing a Power Purchase Agreement with Gujarat Urja Vikas Nigram (GUVNL), the state run utility, for a 25 MW Solar PV unit in Gujarat. The solar PV plant would include more than 100 crystalline silicon solar modules and would be completed by December 2011.
According to Prasad Menon, Tata Power’s Managing Director, the project would probably be the first of the several solar farms to be constructed in the region and the agreement with GUVNL would be beneficial and facilitate the company’s participation in several similar initiatives in the solar power industry.
The Gujarat State Government had in the very recent past declared the allotment of an added 565 MW to the different solar power developers as incentives for them to invest in solar projects in the state. Thus far GUVNL has entered into agreements with 26 solar power firms encompassing 365 MW of power, attracting investments of around $1.3 billion.
This project also emphasizes Tata Power’s interest in the solar segment as the company had begun operating a 1 MW solar unit on the outskirts of Delhi with BP Solar as a partner. They also plan on constructing a 3 MW solar plant at Mulshi in Maharashtra which would be connected to a local grid.
However, Tata Power has specifically avoided participation in any project connected to the $19 billion National Solar Mission Organization by the Government of India, mainly due to the strict deadlines imposed and excessive centralized control of development exercised by them. The mission has a target of generating 20 GW from solar power by 2022, which would account for almost 12 % of the current generation capacity of the nation. The Government also offers preferential tariffs, designated buyers and loans for the first round of projects. But Tata and other developers such as Azure have not participated quoting unfavorable terms of tariffs and loans as the reason. According to Banmali Agrawala, Executive Director (Business Development and Strategy) of Tata Power, the firm could obtain far more favorable terms elsewhere and that they did not want to participate in a project with a Power Purchase Agreement that was not profitable.