The Financial Times reports that the winning bid for the third and fourth phase development at Bhadla solar park in Rajasthan – a 500-megawatt solar farm – was one of the lowest prices for solar power ever seen anywhere in the world. The companies — Acme Solar, an Indian developer, and SBG Cleantech, a joint venture whose shareholders include SoftBank of Japan — said they would build the project for a guaranteed price of just Rs2.44 ($0.04) for every unit of electricity they eventually sold – substantially cheaper than coal.
The Bhadla auction confirmed that the country is undergoing a generational shift from coal-fuelled power to solar and wind and placed India at the centre of a global renewables revolution that is driving down the cost of green energy and which represents one of the biggest threats to fossil fuels.
As India is already the world’s third-biggest carbon emitter and plans to electrify even its most remote villages within two years, a rapid expansion in the country’s renewables sector would prove a huge boost for attempts to keep global temperature rises below 2C — the target set by the 2015 Paris climate accords.
Masayoshi Son, founder of SoftBank, has said he plans to invest $20bn in the Indian solar power industry. (The other investors are Taiwan’s Foxconn and Indian company Bharti.)
In 2015, the government of Narendra Modi set ambitious targets for building new renewable power. By 2022, explained the finance minister Arun Jaitley, India would build 175 gigawatts of new renewable power, of which 100 gigawatts would come from solar.
The solar plans alone are equivalent to 25 large nuclear plants
Manoj Kumar Upadhyay, the founder and chairman of Acme, one of a handful of companies competing for solar projects against many established Indian and multinational conglomerates suggests there are good reasons the price of solar power in India is so low.
In addition to its strong and reliable sunlight, the price of Chinese-made solar panels has tumbled in the past few years as a manufacturing boom has created over-supply. Moreover, India’s notoriously high cost of capital has been reduced by strong government involvement in the solar power sector. At parks like Bhadla, the government acquires the land — removing one of the biggest hurdles in a country where land rights are difficult to negotiate — as well as guaranteeing grid connections and providing payment guarantees should state utilities default.
Six years earlier, India and China had been blamed for “sabotaging” a meaningful deal at the UN climate talks, but Mr Jaitley’s announcement confirmed India was now at the centre of global efforts to develop cheaper renewables and tackle climate change.
Next post: CHS’ founder, Winin Pereira, whilst acknowledging the advantages of solar power, would continue to focus on issues relating to the highly toxic materials used in solar panels.