Besides the PPAs, various agreements for land transfer and coordination were signed between the developers, Madhya Pradesh Power Management Company, Delhi Metro Rail Corporation, Rewa Ultra Mega Solar Ltd (RUMSL), New and Renewable Energy Department, Power Grid Corporation and the department of finance in the Madhya Pradesh government.
Attending the PPA signing, Union power and renewable energy minister Piyush Goyal said despite being a power surplus state, Madhya Pradesh has taken renewable energy as a long-term vision.
"In Gujarat many years back, the renewable energy cost Rs 11-12 a unit. Since then tariffs have come down...Rewa PPA will be a standard model for all states." He said the target 20,000 mw of solar capacity would be achieved by 2017-end.
“The project marks an inflexion point for solar power in India where states and not just central public sector undertakings take the initiative and fulfil the commitment made by the nation in COP21,” said Manu Srivastava, chairman, RUMSL, and principal secretary, government of Madhya Pradesh. India has committed 100 giga watt of solar projects by 2022 under the COP21.
Srivastava said viability gap funding, central financial assistance and blending with cheap coal power have been used as instruments to bring down the solar power tariff, but these instruments are inherently limited in their availability. “The Rewa project does not use any of these instruments but aims to achieve comparable tariff of solar power by following a robust process and project agreements.”
Mahindra Renewables, ACME Solar Holdings and Solengeri Power bagged three units of 250 Mw each at Rs 2.979, Rs 2.97 and Rs 2.974 tariff for the first year. The levelised tariff works out to Rs 3.3 over the 25-year PPA. The contract allows for a 5 per cent year on year escalation which works out to 75 paise in the 15th year.
It is estimated that benefits to the state over project life on the NPV basis, considering their current lowest solar power procurement at Rs 5.05 a unit, is Rs 2,086 crore. Benefit to the other procurer, Delhi Metro over the project life, considering procurement from distribution companies at over Rs 6 a unit, is Rs 1,220 crore.
Prior to Rewa, the lowest tariff for grid connected solar power was Rs 4.34 per unit. Fortum India quoted the rate in January 2016 when NTPC conducted bidding for Badla solar park in Rajasthan.
PGCIL is developing 220/400 kv substation at the Rewa project site under inter-state transmission system totally free of cost for the state and the project. Since the ministry of power has granted status of regional generating station to the project and has allowed inter-sate transmission of power exempt from charges and losses, power from Rewa will reach Delhi metro up to Delhi periphery at the same rate at which it is injected at Rewa.
The first power from the project is likely to be available from September 2017. While DMRC is likely to buy 121 million units (kilowatt per hour) from each of three units, MPPMCL through its distribution subsidiaries will book 80 per cent of the generation capacity.
Twenty companies had put in bids for 10 times the required capacity of 750 mw. ReNew Power and SoftBank promoted SBG Cleantech, Adani and Aditya Birla group were among other bidders.
Located at Gurh Tehsil in Rewa, it would be supplying solar power to meet almost the entire day time requirement of Delhi Metro. This would also enable the Rewa project to supply bulk of the power within the state during peak demand hours of midday.