Ashis Parida October 21, 2017Mahindra Susten, a part of the Mahindra & Mahindra group, is close to setting up India’s first battery-backed solar power project of utility scale in the Andaman and Nicobar islands.
The company has emerged lowest bidder in a tender invited by state run-NLC (formerly Neyveli Lignite Corporation), beating Adani Group, Hero Future Energies, among others with a bid of Rs 288 crore.
As a part of a government initiative to encourage battery-backed solar power project, two other public sector companies — Solar Energy Corporation in India and NTPC — were to award similar projects but have scrapped it after inviting bids.
“Current energy requirement in Andaman and Nicobar is primarily met by diesel generator set and the cost of generation is as high as over Rs 20 a unit. This is an environment friendly option and cheaper too,” Basant Jain, chief executive officer, Mahindra Susten, told ET.
He said that the project will receive agrant of Rs 100 crore from the government, which would lower the effective tariff to Rs 8 a unit.
“Even without the grant, the cost of power will not be more than Rs 12 a unit, which is cheaper than power from diesel-run unit, and would still meet internal rate of return targets,” he said.
Mahindra Susten would be doing the engineering, procurement and construction work for the project which is scheduled to be commissioned in 18 months from the beginning of the projects.
Industry sources said that NLC opened the bids in August but has been delaying awarding it since it may be exploring other options like running power on liquified natural gas. An email sent to NLC on this issue remained unanswered.
India’s solar-power capacity has grown exponentially to around 14 gigawatts (GW) and the government has set an ambitious target of 100 GW by 2020, but storage has been a missing link thus far and the government is now acknowledging the need for it.
Therefore, the government wants the industry to set up battery-manufacturing units in India as a sharp decline in prices of batteries between 2010 and 2017 has made battery-backed solar power more viable.
“We are also considering technology partnership with foreign solar storage technology companies to sharpen our capability further and offer this service in other geographies.While solar with storage tenders in India will come up in a big way going ahead, there are some very big projects coming up in the Middle East and the US.”
Mahindra Susten is a part of Mahindra Partners which is the $1 billion private equity division of the $19 billion-Mahindra group, led by Anand Mahindra. The group has identified solar power as a key growth area to tap the potential in the country.
India has huge solar power potential but this form of power is inherently intermittent and subject to fluctuations. Around the world, countries balance this with gas-based or hydropower to ensure continuous power supply but India does not have much gas, and hydropowerproject development in the country has been slow.
Battery storage is a good back-up option but so far, the high cost of storage was a discouraging factor for the price-sensitive market in India. But the fall in prices of battery is making these projects more attractive and luring companies like Mahindra Susten and global majors like Wartsila to enter the space.
Source: http://energyinfrapost.com/mahindra-susten-build-indias-1st-battery-backed-solar-project-andaman/
