Solar power: First mega projects in Ladakh expected to get good response

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Updated: Feb 11, 2019 8:18 AM

Response to the tender for the first phase of the region’s mega solar project is expected to be good.

Response to the tender for the first phase of the region’s mega solar project is expected to be good.

The Centre IS thinking big as far as tapping the solar potential of Jammu and Kashmir’s Ladakh region is concerned. On its agenda is the creation of 23-GW solar capacity in the region, entailing investments of `45,000 crores. With a single tender for the first phase of the ‘ultra mega’ solar project having been floated, a pre-bid meeting will be held on February 18 for the installation of 2,500-MW capacity in the Kargil region and 5,000 MW in the Leh district.

There is a good reason for the focus on the region. Thanks to its high ‘irradiance’ factor, the daily solar power generation potential in the Ladakh region is 6-8 units per sqm, as against 3-5 units for the other parts of the country. Besides, land acquisition for the project is likely to be a smooth affair.

To attract developers, the Solar Energy Corporation of India (SECI)—the nodal agency for the project—has incorporated innovative terms and conditions in the bid documents, with power purchase agreements (PPAs) to be signed for 35 years instead of the normative 25 years.

For the Kargil-based plants, transmission lines might originate at Zangla, traversing through Kargil and Alusteng (Srinagar) before they terminate at New Wanpoh in Anantnag. The plants in Leh would have to be connected to the New Kaithal switching substation in Haryana. The transmission systems would need a special foundation with raised platforms and other avalanche-protection features.

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Land for the projects shall be leased to SECI by the Ladakh Autonomous Hill Development Council (LAHDC) for 40 years and sub-leased to the developers. For the Kargil project, the land would be leased at a premium of 18% to the existing rates. For the plants in Leh, there would be a 13% premium to the existing rates.
Policymakers believe the projects would ensure economic growth of the region and integrate the local population into the mainstream. A senior government official told FE that with socio-economic uplift of the region being one of the project objectives, “we have asked LAHDC to quote land rates on a par with what solar developers pay in other parts of India even if the prevailing rates are much lower.”

Commenting on how the tender is being viewed, a senior executive of a prominent solar company says, “all big players are eyeing the project. The PLFs are expected to be high. However, the logistical challenges in the area and the impediments to constructing long transmission networks would need to be assessed.”

Kameswara Rao, leader, energy, utilities and mining, PwC India, says, “response to the tender should be good and, despite the logistical challenges, the bids could set a record. The solar resource potential is very high, the efficiency of solar cells improves in cold conditions, and the running costs would be lower”. Several solar projects have been set up in similar arid, cloud-free regions in Chile, he points out.

Striking a contrarian note is Amit Kumar, partner, clean energy, PwC. “There are several challenges the project would face. Besides the rugged terrain, the region witnesses heavy snowfall and remain cut-off from the rest of India for almost half the year. Also, the existing pool of solar project developers in India do not possess operational experience of large-scale solar projects in similar terrain,” he holds.

The complexity of the project, need for high capital investment and the risk profile would necessitate high tariffs. The example of Jalaun and Kanpur solar projects which evoked a tepid response from

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