Solar power in India will cost less than coal energy in five years

The Clinton Climate Initiative, a programme of the William J Clinton Foundation, is in the process of setting up four ‘solar parks’ across the world with an overall capacity of 20,000 Mw. On Monday,it signed an agreement with the Gujarat government for setting up what is billed as the world’s largest solar project. IRA MAGAZINER, CCI’s chairman, talked to Maulik Pathak on his plans. Excerpts:

So, you have finally firmed your plans on Gujarat after exploring for over a year now. Have you identified the location?
We have identified three to four locations and will be finalising these in the next three to four weeks. About 5,000 hectares of land is required. We have been to many places where they talk and talk. Finally, we came to Gujarat, where people act. CCI is aiming to set up a solar park with a generation capacity of 3,000 Mw, which could go up to 5,000 Mw. The cost of the project would be about $8-10 billion for 3,000 Mw and for 5,000 Mw, it would be about $15 billion. The feasibility study will be over in 2010 and the plant will start in 2012.

How much of solar capacities has Clinton Climate Initiative planned worldwide?
We are planning four solar parks across the globe. We are looking at South Africa, California in the US, Australia and Gujarat. All these projects are of the same size, as of now. The overall capacity to be generated from solar energy in the four projects could go as high as 20,000 Mw.
From the progress made so far, we feel the Gujarat project will be the first to come up. And this would be the world’s largest solar project.

The cost of generation for solar power is very high as compared to other fossil fuel-fired units.
A solar park can decrease the cost of solar power significantly. The initial cost for setting up the project is very high. Once the plant is set up, its cost comes down. There is no extra cost, except managing the mirrors.
You don’t have to adjust to any fluctuations in cost. In fact, there is no fuel cost. It (solar plant) can go on as long as the sun shines. Of course, we have got to make arrangements when the weather is cloudy. By our calculations, the cost of solar power generation in India will come down to Rs 5-6 per kilo watt hour/unit in the next five years. And this will be lower than the cost of a coal-fired plant.

How do you propose to finance these projects? How many developers have shown interest in the Gujarat project so far?
As the project is very costly in the initial phases, we will arrange finance for the solar developers. We are already in talks with Asian Development Bank for this. As I said earlier, once the project takes off, the cost of generation goes down, so finance is initially essential. About 10 international developers have already shown interest.

The central government had recently written to the state to consider setting up a solar SEZ (Special Economic Zone) in Gujarat. Any plans to park your solar project in the SEZ? Also, do you propose to set up hybrid plants?
We have held talks with the central government on this. In fact, we are very hopeful about the National Solar Mission. Along with developers, research and development, even component manufacturers have shown interest in our project. So, there is a good export market. We can certainly consider that (SEZ).
Hybrid plants are something else that we are considering at the moment.

Source: Business Standard