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The Indian government has announced that it will develop, with the help of state-owned energy companies, the largest solar power plant in the world. The planned project, which will use solar photovoltaic cells, will have a final capacity of 4,000MW (4GW), and be located in the western state of Rajasthan.
The size of the project requires it to be split into separate phases, with phase one planned for commission in 2016, with a capacity of 1,000MW. This phase one alone will be ten times larger than any other solar power plant in the country.
India has struggled with severe power cuts in recent times due to its ageing energy infrastructure, and the fact that demand for electricity far outstrips the supply. In an attempt to address this problem four coal-fired Ultra Mega Power Plants (UMPP) are under construction, with production capacities of around 4,000MW.
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Whilst the coal UMPPs are unsustainable and highly polluting, they can offer electricity at far lower costs than the solar plant, however they also face major troubles due to the availability of low cost coal. Tata Power and Reliance Power, the companies who own and operate the coal plants, have asked for permission to increase the electricity tariffs they offer in order to allow them to use more expensive coal supplies.
The UMPPs have been designed to burn low carbon coal in order to reduce the extra emissions that they would produce. India is already one of the largest carbon emitters in the world, and cannot really afford to begin releasing even more greenhouse gases. The problem is that India’s coal has a low carbon content (this actually means that it burns less efficiently and therefore emits more emissions), and therefore the coal they use must be imported, increasing the cost.
Millions of people around India do not have access to electricity and giant solar projects such as this offer a long-term solution.
The project will be developed by a joint venture of five state-owned companies: BHEL, Powergrid Corporation, Solar Energy Corporation of India, Hindustan Salts, and Rajasthan Electronics & Instruments Ltd.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com
A 4000 MW solar PV plant would cost Rs 50000-60000 crores to produce just 6 billion units of energy per annum- This was equivalent to the generation from an 800 MW coal based plant costing only Rs 4000 crores. Though there was no cost for fuel for a solar plant, if one takes the cost of increased capital, the cost per unit would come to Rs 15 on the conservative side, vis-à-vis Rs 3-4 from a coal based plant, based on its location and sourcing of fuel. However, the true cost of solar energy was never stated because of various incentives and tax breaks given in the name of green energy sources.
Further, just as the BHEL was mandated to put up a large solar plant, the power distribution companies were forced to buy electricity from solar plants at a high price Rs 12 per unit, which gets averaged off in the power tariff. What was forgotten was that, unlike in the developed countries, in India the capital was scarce as its investment needs are high in particular for infrastructure. So the amount of Rs 50000-60000 crores needlessly spent in pursuit of solar energy deprives funds needed for other more essential projects like, housing for the poor, roads, water supply or railways.
There is another disadvantage to solar power, as it was not available during the peak hours, which fall between 18-22 hours, when the sun was out of sight. The net result was that the solar capacity will have to be duplicated with conventional power in order to meet the peak demand. Conversely, when the solar power was available during the daytime other plants will have to back down thereby adding to the idle capacity.
It is to be noted that the USA, where there was no scarcity of capital, has not found it worthwhile to go for solar energy in a big way. Out of a total generation 4100 billion units in 2011, the solar generation was 0.04 percent, as against 42 percent from coal based plants, 25 percent from gas, 19 percent from Nuclear and 8 percent from Hydro.
Therefore it makes no sense to go after solar plants before first achieving self sufficiency in power as well as meeting other infrastructural needs.
This is not to ignore the importance of solar power as a clean and future source of energy. But by deferring the investments, India stands to gain; as the technology advances the cost of plants will come down.