State-owned Indian power utility company National Thermal Power Corporation (NTPC) informed stock exchanges Tuesday it has approved investments in two solar power projects. The combined cost of the two projects is about Rs. 3,104 crore, the company said in its regulatory filing.
The two projects are Mandsaur Solar PV Project (5x50 MW) in Madhya Pradesh at an estimated cost of Rs. 1,502.77 crore, and Bhadla Solar PV Project (4x65 MW) in Rajasthan entailing an investment of about Rs. 1,601.27 crore. The investments were approved at the company's board meeting held last Wednesday, March 29.
Both projects are expected to be commissioned by March 2017. NTPC's current operating solar power capacity is 100 megawatts, which is expected to reach 10 GW by the end of financial year 2021-22.
The Narendra Modi government has plans to tap solar energy in a big way under the National Solar Mission.
In an interview with business news channel CNBC-TV18 Tuesday, NTPC Director-Technical A K Jha explained why solar power developers have bid for very low tariffs of late.
"The main reason probably is the volume because initially, it started with 5-10 megawatts, small steps, but now we are getting into 250 megawatts and that kind of a scale, [sic]" he told the channel.
"...When we were doing Andaman five megawatt, that time the engineering, procurement and construction (EPC) cost was around Rs 12 crore per megawatt. And when we ordered Andhra Pradesh last year, the cost was Rs 6.36 crore per megawatt and when we have ordered Rajasthan and Madhya Pradesh this year, the rates are Rs 5.36 crore per megawatt, [sic]" he added.
On falling tariffs
Jha said reduced imports improve the scope for lowering thermal power tariff.
"We have been trying to reduce the tariff on the thermal side by rationalising the coal and reducing the import of coal. And we have reduced this year, the import of coal, by more than 42 percent [sic]," he said.
"And as the Coal India production increases, the coal import will get reduced and therefore, the tariff will come down [sic]," he added.
Jha said the company's plant load factor was around 78 percent in 2015-16, much lower than 85 percent recorded in the preceding year.
The NTPC stock was trading Tuesday at Rs 127.70 at around 3 p.m. on the BSE, down 2.56 percent from its previous close. The Indian government holds 69.96 percent stake in the company after the latest round of divestment in February this year, when it offloaded 5 percent stake.
NTPC currently has 18 coal-based, seven gas-based, eight solar-PV, one hydro and eight subsidiaries-joint venture power stations.