Ultra Mega Solar Power Project

21/4/2017 531 Geography | Energy | View Recent Current Affairs

  •  Madhya Pradesh government has signed a power purchase agreement (PPA) with the Delhi Metro Rail Corporation (DMRC) to supply 24% of electricity generated from the Rewa ultra mega solar project to be set up in the state.
  • Rewa Ultra Mega Solar (RUMS) project is a joint venture of Solar Energy Corporation of India and MP Urja Vikas Nigam where in both parties have 50% stake.
  • When completed, it will be the world’s largest single­site solar power project.
  • IFC, a member of the World Bank Group, is the lead transaction advisor for this project that will mobilise USD 550 million in private investment and avoid a million tonnes of GHG (Greenhouse gas) emissions.

About Ultra Mega Power Projects (UMPPs)

  • Ministry of Power launched a unique initiative in 2005-06 to facilitate the development of Ultra Mega Power Projects (UMPPs) each having a capacity of about 4000 MW each, at both the coal pitheads and coastal locations aimed at delivering power at competitive cost to consumers by achieving economies of the scale.
  • The Central Government has accordingly taken the initiative for facilitating the development of UMPPs under tariff based competitive bidding route using super critical technology on build, own and operate (BOO) basis.
  • Central Electricity Authority (CEA) is the Technical partner and Power Finance Corporation (PFC) is the Nodal Agency.
  • In order to enhance investors’ confidence, reduce risk perception and get good response to competitive bidding, PFC incorporates Special Purpose Vehicles (SPVs) for each UMPP to undertake the bidding process on behalf of the power procuring (beneficiary) States.
  • The purpose of the SPVs is to carry out the bid process management and obtain various clearances/consents for the projects so that the same are transferred to the successful bidder along with the SPV, who is selected through the tariff based International Competitive Bidding (ICB) in accordance with the Guidelines issued by Ministry of Power, Govt of India, as amended from time to timeUMSPP project is too good to be objected. It will use surplus land and bring down the cost of solar energy.
  • PSUs will use public funds to set up a project of public interest. The country will get the much needed electricity as well as contribute to mitigating climate change.

Analysis:

  • As per the Census 2011, one-third of households—about 400 million people—do not have access to electricity. In rural India, about 45 per cent of the households—more than 77 million—continue to use kerosene to light their homes and shops. With no access to any source of lighting, 1.2 million households go dark after sunset. The country is paying huge development costs because of this energy poverty—education, health and economic development are getting stymied.
  • Solar energy is decentralised—sunlight falls everywhere. Demand for electricity too is decentralised. This makes solar PV technology, which is modular, most suitable for decentralised generation and consumption. This is the precise reason a majority of solar PV installations are decentralised.
  • Besides, big solar power plants are viable only when they use solar thermal energy. Unlike PV, solar thermal is a centralised technology. It converts solar radiation into steam, which is then used to run a large conventional turbine. Big solar plants across the world, such as those in the US and Spain, are mostly based on solar thermal technology.
  • India is the only country which is investing in big solar PV projects. India has installed 2,000 MW grid-connected plants, mostly in Gujarat and Rajasthan. In the past five years, the price of solar energy has halved. It is debatable whether this reduction is because of installing 2,000 MW solar power, or due to the glut in the solar industry and dumping of solar PV panels by Chinese and US companies.
  • The other major advantage small solar power plants have over the big ones is instead of a few big businesses setting up large-scale solar power plants, we can promote thousands of small businesses through solar mini-grids and social entrepreneurs to serve the local population. This will create jobs at the local level and build local economies.
  • This model will revolutionise the way power is produced and consumed in India. This will also bring down the price of solar power—the main objective of setting up UMSPPs. It will be a better way of utilising the resources of NCEF and PSUs.

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