SoftBank to offer ISA members free power from solar plants after 25 years of PPA

By: | Published: October 4, 2018 3:07 AM

SoftBank Group’s chief executive officer Masayoshi Son on Wednesday said his company is willing to supply free power from solar projects after the completion of the 25-year tenure of power purchase agreements (PPAs).

SoftBank, Masayoshi Son, solar plants, power purchase agreements, International Solar Alliance, SB EnergySoftBank Group’s chief executive officer Masayoshi Son.

SoftBank Group’s chief executive officer Masayoshi Son on Wednesday said his company is willing to supply free power from solar projects after the completion of the 25-year tenure of power purchase agreements (PPAs). The offer would also be available to all member countries of the International Solar Alliance (ISA), Son added. Son’s comments come after SB Energy, the company’s power generation unit, quoted Rs 2.71 per unit for solar power even as the lowest solar tariff discovered in the same auction was Rs 2.44 per unit. “The cost of solar power generation is much cheaper in India compared with rest of the world,” Son said.

SB Energy’s bid for 1,100 MW in the aforementioned auction has been rejected by the Central government. Son was addressing the plenary session of the second edition of the global renewable energy investment meeting and expo. The event is simultaneously being held along with the maiden assembly of ISA and the second Indian Ocean Rim Association renewable energy ministerial meeting.

Echoing the slogan of “one world, one sun, one grid” raised by Prime Minister Narendra Modi during the inauguration of these events on Tuesday, Son said renewable energy can be easily shared globally if electricity, like internet, can be interconnected through wired networks. Though Son estimated the life cycle of solar plants to be 80 years while making the offer, the International Energy Agency recommends the life expectancy of solar modules at 30 years. The current average capacity utilisation level of solar plants is as low as 19%.

The Central Electricity Regulatory Commission defines ‘useful life’ of solar thermal projects to be 25 years. About 4 gigawatts (GW) of recent solar bids have been scrapped due to high prices discovered. Gujarat had cancelled the first bidding process for 500 MW solar capacity held in March, when the lowest tariff discovered was Rs 2.98 per unit. The reauction fetched the magic figure of Rs 2.44 per unit, matching the record low rate first found in May 2017 for Rajasthan’s Bhadla projects. However, sources said Azure Power, which had won 100 MW in the latest Gujarat auction by quoting Rs 2.45 per unit, has requested the state to withdraw its bids. Uttar Pradesh minister Brijesh Pathak said the state would soon re-tender its recently cancelled auction.

As recently reported by FE, power minister RK Singh has pointed out the states’ reluctance towards buying solar power, stating that even if the states agree to buy solar power at lowest tariff of Rs 2.44 a unit, they effectively end up paying Rs 4.04 for every unit of electricity as they have to continue paying fixed charges to thermal power plants.

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