The State-run Solar Energy Corporation of India (SECI) is likely to conduct a follow-up meeting with solar industry representatives today to discuss the details of its tender for 7.5-GW solar energy projects in Leh and Ladakh region of Jammu & Kashmir.

The tender, which is part of the government’s ambitious plan to build 23-GW solar power projects in Ladakh, had been issued by SECI on December 31, 2018 with last date set for April 30.

As per the Request for Selection (RfS) document, two solar power projects will be built in the Phase-1 — a 2.5-GW project in the Zangla region of Kargil and a 5-GW project in the Pang region of Leh.

Transmission infra

The developers will have to set up the solar generating capacities and the transmission network up to the interconnection point, at their own cost, in a span of 54 months. SECI will sign a 35-year power purchase agreement (PPA) with the project developers.

The first meeting with developers was conducted in February. However, given the size of the projects and complexity of the region, SECI has decided to conduct another meeting to clarify the details of the tender, a SECI official told BusinessLine . According to several industry players who are considering bidding for the projects, there are presently concerns over the requirement to develop the transmission infrastructure. This, coupled with logistical, geographic and security challenges typical for the region would lead to power tariff crossing ₹5 per unit.

“It is a big question whether the discoms who eventually have to buy power from these projects will be willing to buy power at this cost,” one of the industry players said.

Tariff costs

According to SECI official, since transmission infrastructure cost contributes around half of the total project cost, developers would need to achieve higher generation from their power projects as well as higher utilisation of transmission lines to make the tariff competitive.

Even then, SECI expects the tariff discovered from these projects to be 50 per cent higher than the average solar tariff. “We are anticipating the tariff of ₹5 per unit, but it could also be cheaper,” the SECI official noted. In the auctions conducted in February SECI have discovered tariffs ranging from ₹2.55 to ₹2.61 per unit.

“In theory, setting up large projects in Ladakh is a very good idea as the region has high irradiation, low temperatures and huge swathes of surplus land. The problem is on the operational and tender design fronts,” said Vinay Rustagi, Managing Director of solar consulting firm Bridge to India.

According to him, putting up dedicated transmission lines to transmit power generated by the solar plants would raise both the time and capital cost for these projects. “SECI has kept the minimum bid size at 2,500 MW and bundled transmission along with it, which we feel is highly restrictive as very few developers have the necessary operational and financial strength,” Rustagi added.