Indian power minister celebrates record low solar price

French company breaks new ground in affordable solar, but Piyush Goyal tells parliament coal will “remain our mainstay”

Kids sitting under a solar panel at Dharnai village in India. (Pic: Greenpeace)

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India’s power minister has hailed a new clean energy record, with a solar plant winning a contract to sell to the grid at the country’s lowest price ever.

The contract to build the 250MW plant in the city of Kadapah, Andhra Pradesh, was won by French company Solairedirect. It bid to sell electricity to the National Thermal Power Corporation – India’s state power company – at Rs 3.15/kWh (roughly 5¢).

Indian power minister Piyush Goyal, greeted the news through Twitter. “Clean affordable power for all,” he said.

The Indian government, under prime minister Narendra Modi, has championed the transformative potential of solar energy. Modi is famous for his backing of solar when chief minister of Gujarat province.

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At the same time, the government remains committed to the opposite end of the energy transition – coal. Goyal told parliament on Monday that the Paris climate agreement “does not in any way stop the government or any country from meeting its energy needs from whatever sources of energy one may choose”.

Coal, he said, “will remain and to continue to remain our mainstay and there was no such agreement in Paris that will stop us from continuing to encourage coal-based generation of power”.

Goyal said that India was also “giving a big thrust to renewable energy” and it was central to the government’s plans.

This is the second time the Solairedirect has won an Indian solar auction with a record-low bid. In 2011, the company broke all records with a contract that sold electricity at Rs 7.49/kWh. At the time, one renewable energy consultancy called the price “mind numbing”.

On its website, Solairedirect said the decline in solar prices since that time had made solar energy affordable to all Indians.

“This is a critical milestone since for the first time in India, solar energy is cheaper than coal,” said the company. This achievement was celebrated by Goyal in 2016.

According to a report in The Hindu, other bidders for the Kadapah project were Canadian Solar Energy (Rs 3.39/kWh), Greenko Energies (Rs 4.09/kWh), Azure Power (Rs 4.38/kWh), Mohoba Solar (Rs 4.54/kWh) and Mahindra Renewables (Rs 4.68/kWh).

A 2015 project bid by SunEdison of Rs 4.63/kWh was considered “maverick” at the time, the Hindu reported. Just two years later, it would not have been competitive.

This article has been amended, it suggested the strike price for solar in the UK was 11p. This is incorrect.

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