50 MW of Solar Projects to be Developed in Pavagada Solar Park at a Tariff of ₹1.24/kWh

Karnataka commission has fixed the levelized tariff of ₹1.24/kWh for 24 years


The Karnataka Electricity Regulatory Commission (KERC) has given its approval to issue the letter of award (LoA) to Amar Raja Power Systems Limited, to construct  50 MW (10 MW x 2 blocks + 15 MW x 2 blocks) of solar projects at Pavagada Solar Park, located in Tumkur district of Karnataka.

The 50 MW solar project will be built with associated transmission systems under the engineering, procurement, and construction (EPC) mode.

The commission has also fixed the levelized tariff of ₹1.24 (~$0.017)/kWh for 24 years for this project. The power purchase agreement (PPA) will be executed between the Bangalore Electricity Supply Company (BESCOM) and Karnataka Renewable Energy Development Limited (KREDL).

Explaining why the tariff is so low, an official from the BESCOM said, “Land is available to KREDL at no cost and the power evacuation infrastructure up to the sub-station is also available; therefore the tariff is low.”

The KERC was replying to letters written by the government of Karnataka and KREDL commented that

“KREDL should seek necessary approval from the Karnataka government and the Ministry of New and Renewable Energy for the enhancement of the capacity of Pavagada solar park from 2,000 MW to 2,050 MW”, the KERC said in its letter.

The Pavagada solar park infrastructure was developed by Karnataka Solar Power Development Corporation Limited (KSPDCL), a joint venture between Solar Energy Corporation of India (SECI) and KREDL. It was initially built to host a capacity of 2,000 MW of solar in a single location spanning 13,000 acres of land. Now the entities are identifying smaller pieces of land which can be utilized to develop smaller solar projects. Due to this reason, KREDL is seeking approval from the state government to enhance the park capacity by another 50 MW and supply power to the distribution company BESCOM at a low rate which would be a win-win situation to both KREDL and BESCOM.

KREDL could not be reached for comments.

According to the PPA document signed between BESCOM and KREDL, “The solar power developer will be entitled to receive the tariff of ₹1.24 (~$0.017)/kWh per the terms of this agreement during the period between the commissioning and the expiry date”.

BESCOM will not be liable to pay any insurance or compensation that may arise under this agreement on account of any loss, damage etc.

Moreover, the solar power developer will be responsible for power evacuation from the solar power project to the nearest designated delivery points in Pavagada Solar Park.

The Pavagada solar park covers 13,000 acres with a total capacity of 2 GW. The park is divided into eight blocks of 250 MW each with dedicated high voltage supply lines, pooling stations, and a pooling substation for evacuation.

In January 2018, KREDL tendered 1,200 MW of grid-connected solar PV projects to be developed at Pavagada. However, KREDL was able to auction merely  550 MW of the tendered capacity due to poor response from bidders amid various ongoing uncertainties in the solar sector.

According to Mercom’s India Solar Project Tracker, Karnataka has installed large-scale solar capacity of over 5.3 GW and has a development pipeline of ~2.8 GW, making it the leading solar state.