With the announcement of a historic low tariff of Rs 1.38 ($0.019) per unit for a rooftop PV project and a new 1.5 GW solar project, the Indian state of Madhya Pradesh has upped its solar game plan.
Speaking to pv magazine, Shreekant Deshmukh, MPUVNL superintending engineer, said that the lowest rate of Rs 1.38 per unit is applicable for the first year, which is one-fourth of what consumers are presently paying. “The rates would increase by 3% annually and would roughly double at the end of 25 years,” he said.
So far, most renewables capacity in the state has been in wind. These new projects will substantially increase the proportion of solar.
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How will this very cheap power affect coal power stations? The coal power stations will run at low capacity during the morning, and scale up to meet the afternoon peak and overnight demand. But their capacity utilisation rate will fall. And that will reduce their profitability. The cost advantage of solar is too great for coal generation to be sustained for long. As the percentage of solar power in the system increases, coal power stations will become more and more vulnerable.
But before the coal power stations can be closed, there will need to be enough storage in the system to replace coal-powered supply. Making sure the lights stay on will require careful planning.
What's happening in Madhya Pradesh is what will happen to coal everywhere. The writing is on the wall.
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