Launching a 750MW Solar Power Project by Madhya Pradesh Power Management Company

Madhya Pradesh Power Management Company to Launch a 750MW Solar Power Project

Three entities viz. Madhya Pradesh Power Management Company Limited(MPPM), Delhhi Metro Rail Corporation(DMRC) and International Finance Corporation(IFC) have come together to announce a tender for a 3 X 250 MW solar project in Rewa, Madhya Pradesh. MPPM, which holds all power distribution companies in the state of Madhya Pradesh, will buy most of the power generated by the proposed project, but quite interestingly DMRC will benefit around 363 million units of power per year from the proposed project, through an open access route.

Major Highlights

(1) Largest long-term procurement of open access solar power by a bulk power consumer in India heralding the case for economic viability of solar power

(2) Attractive opportunity for large international developers because of its large size and ready solar park infrastructure availability

(3) Rajasthan and Madhya Pradesh to benefit from a surge in open access power procurement because of high irradiation and relatively easy availability of land

The Rewa project has been under development since 2013. It was to be developed by Solar Energy Corporation of India(SECI) and was to be concessional funded by the World Bank with some participation from the private developers and minority shareholders. However the project structure needed be completely revamped as the World Bank’s conditions for funding were highly onerous and due to some lack of interest from the private developers for minority share holders.

Now a joint venture between SECI and Madhya Pradesh Urja Vikas Nigam Limited (MPUVN) will take over the providing of the solar park infrastructure for the project. And the rest will be taken care of by the World Bank like Providing the finance for internal substation and transmission lines. The tender lays down a time window of 18 months for the commissioning of the project from the date of signing of the power purchase agreements(PPA). If the PPA is signed by December 2016, these projects can be expected to be commissioned by mid 2018

According to our understanding Delhi Metro will bear all the cost and risk associated with open access use of power and provide a demand forecast for the day ahead. So each project will require to prepare a forecast of the availability for every 15 minutes time, which will take into account the amount of energy required by DMRC and prepare a matching schedule in coordination with MPPM. Once Commissioned Rewa Solar Power project will be very attractive to the large international developers because of its sheer size and ready solar park infrastructure availability.

So with waiving off of interstate transmission charges for manipur whatsapp groups the solar power by the central government, states such as Rajasthan and Madhya Pradesh, that have high irradiation and lots of wastelands are likely to attract a large part of these new investments.