NTPC, NLC India and other state-run companies to make green energy parks across the country

New Delhi: As part of India’s energy security efforts, state-run companies present in the conventional power space such as NTPC Ltd, NLC India Ltd (earlier known as Neyveli Lignite Corp. Ltd) ,and Power Grid Corp. of India Ltd (PGCIL) are being roped in to build massive green energy parks.

Setting up such parks will provide heft to India at the world stage specifically in the view of a rapidly evolving global energy landscape and a fundamental change in the global investment culture. Prime Minister Narendra Modi will be attending the UN Climate Action Summit on 23 September in New York.

These proposed ultra mega renewable energy power parks (UMREPP) of 2,000 megawatts (MW) involving a cost of around $2 billion each, are to be set up in wind and solar resource rich states such as Jammu and Kashmir, Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu and Telangana, according to a government note reviewed by Mint.

The National Democratic Alliance (NDA) government’s push may also see participation from other hydropower public sector units (PSUs) such as North Eastern Electric Power Corp. Ltd (Neepco), NHPC Ltd, Tehri Hydro Development Corp. Ltd (THDC), SJVN Ltd (SJVNL), and Damodar Valley Corporation (DVC).

Mint reported on Thursday about the central government plan of making state-run companies build massive clean energy parks to help developers achieve economies of scale and further bring down solar and wind power tariffs.

With built-in incentives to ensure states and operators are invested in the success of the parks, India’s largest power sector lenders such as Power Finance Corp. Ltd (PFC) and REC Ltd may also participate in the push to cut India’s dependence on fossil fuels.

“The effort is to make land and decimated transmission available to renewable energy developers aiming for catalysing the growth of renewable energy in the country," Anand Kumar, secretary in the ministry of new and renewable energy told Mint.

To ensure that these plans don’t meet the fate of ultra-mega power project programme, attempted to create large power generation capacities at a single location, the preliminary meetings for setting up such large clean energy parks under the existing Solar Park scheme, has also been attended by the principal energy secretaries and principal revenue secretary of the above mentioned states. Also, the chairman and managing directors of the CPSUs have also been made a part of the initial discussions.

This assumes importance given the standoff between the centre and the Andhra Pradesh government over reworking power purchase agreements (PPAs) signed by the previous TDP government for wind and solar power.

Given the delays in land allocation, the centre also made the district commissioners of solar radiation rich districts such as Barmer, Bikaner, Jaisalmer, Jodhpur and Kutch attend the preparatory meetings for such large clean energy parks.

To get states on board and facilitate the requisite clearances, state governments will be paid Rs0.02 per unit of electricity generated from the projects over their lifetime. Also, the SPVs will be paid park development and operations and maintenance (O&M) charges by the developers, and Rs0.02 per unit on the electricity generated over their lifetime. The operators that will set up renewable energy projects such as wind or solar inside the clean energy park will be selected through tariff-based competitive bids.

Even as the US withdrew from the Paris climate deal, clean energy projects now account for more than a fifth of India’s installed power generation capacity.