Companies

After tie-up with Abengoa, BHEL sees big play in solar CSP

M. Ramesh Chennai | Updated on February 07, 2011

With a technology tie-up with the Spanish solar major, Abengoa, under its belt, BHEL sees a large scope in the Concentrated Solar Power (CSP) field.

The public sector power equipment major is already into solar PV – it is building a plant to manufacture crystalline silicon photo voltaic modules at Bangalore.

BHEL believes that there is business aplenty in India as the developers (power producers) will need to look for low cost equipment – read, made in India – because they have offered aggressively competitive prices to win their projects.

Background

Under a reverse bidding process, the Central Electricity Regulatory Commission had set a tariff of Rs 17.91 a unit for solar PV and Rs 15.31 a unit for solar CSP, and interested companies were asked to offer discounts.

In the fiercely competitive bidding process which took place in September last year, the best 30 PV developers, with a total capacity of 150 MW, offered to sell their power (to the nodal agency, NTPV Vidyut Vyapar Nigam) between Rs 10.90 a unit and Rs 12.70 a unit.

The best seven CSP developers, with a total capacity of 470 MW, offered rates between Rs 10.49 (of Lanco Infratech) and Rs 12.24 (of Corporate Ispat). Under the power purchase agreements between the developers and NVVN, the developers have to achieve financial closure within a stipulated timeframe, failing which there will be stiff penalties.

Some believe that the quoted tariffs are so unrealistic that they may trip the whole programme.

Today, CSP equipment costs, in the international market, between Rs 28 crore and Rs 37 crore a MW. Even the CERC's feed-in-tariff of Rs 15.31, which was bid down by competition, assumed a price of Rs 24 crore a MW.

Hence in order to be profitable at the offered tariffs, developers would need to look for low cost equipment made in India.

BHEL aims to cater to this market.

“We are already working with five developers,” BHEL's Chairman and Managing Director, Mr B.P. Rao, told Business Line, a few days ago. Seven companies have been allotted projects worth 470 MW.

Of these, three companies – Rajasthan Sun Technique Energy (a subsidiary of Reliance Power), Lanco Infratech and KVK Energy — were allocated 100 MW each. The other 170 MW went to Godavari Power and Ispat, Corporate Ispat Alloys, Megha Engineering and Arum Renewable Energy.

Unlike in the case of PV, where electricity is generated when sunlight falls on a silicon panel, ‘concentrated solar power' plants use sunlight to heat water into steam and use the steam to turn the turbines.

BHEL has sufficient expertise in steam generators and turbines, Mr Rao observed, adding that “mirrors are no big deal”. The crux of the matter, according to him, is the technology for heat capture, an area in which Abengoa is an expert.

Published on February 06, 2011

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