ReNew Power said on Saturday that it has signed a power purchase agreement (PPA) for round-the-clock (RTC) electricity supply with the Solar Energy Corporation of India (Seci).
In order to supply power from the 400 mega-watt (MW) RTC project at 80% utilisation rate, the company will require around 900 MW of wind capacity and 400 MW of solar capacity, supplemented by battery storage. ReNew Power will set up this capacity through wind and solar farms across Karnataka, Maharashtra and Rajasthan, and the total project cost is estimated to be around $1.2 billion. Standalone solar and wind generation units usually operate at a lower capacity utilisation range of 20%-30%.
As FE reported earlier, the company had quoted the lowest tariff of Rs 2.90/unit (for first year) for the 400 MW capacity in the reverse auctions held in May 2020 for the country’s first RTC renewable energy supply tender. Though the tariff under this tender will increase by 3% annually for 15 years, the levelised tariff would be around Rs 3.60/unit, which is lower than the current average power purchase cost of Rs 3.85/unit from non-renewable sources in the country. “We are pleased to sign this agreement which allows us to provide a value-added product to the electricity grid and offers us a competitive advantage for all such future bids,” Sumant Sinha, chairman and CEO of ReNew Power said.
At the current cost of lithium-ion batteries, the capital cost of renewable energy project can go as high as Rs 10-12 crore/MW if developers want to install a storage system for four hours along with the wind or solar plant.
Standalone solar and wind plants normally requires capital of about Rs 4-5 crore/MW. Since renewable energy is unpredictable in nature, other sources of energy are required for balancing it, increasing the actual cost of such power, dissuading state-run power distribution companies from buying such electricity. “This PPA is a significant step forward to not only meet the 175 GW renewable energy target of India but also usher in a dispatchable renewable energy regime in the electricity sector,” JN Swain, MD Seci said.