Railways Tender for 3 Gigawatts Solar Power Generation and Auction process likely go through SECI

NEW DELHI: Indian Railways will soon launch tenders to set up large-scale solar power projects working towards its overall solar power target of 5 gigawatts. Railway Minister Piyush Goyal recently announced that Indian Railways will soon float solar power tenders to set up 3 gigawatts of capacity. These projects will be set up over the unused surplus land that the Railways owns.

While the Minister did not mention about any collaboration with the Solar Energy Corporation of India (SECI), the tenders and auction process would likely go through SECI (Solar Energy Corporation of India Ltd.). SECI is a company of the Ministry of New and Renewable Energy, Government of India, established to facilitate the implementation of National Solar Mission. It is the only public sector undertaking dedicated to the solar energy sector. SECI is responsible for implementation of a number of government schemes, major ones being the VGF schemes for large-scale grid-connected projects under JNNSM, solar park scheme and grid-connected solar rooftop scheme, along with a host of other specialised schemes such as Defence scheme, canal-top scheme, and Indo-Pak border scheme. SECI has ventured into solar project development on turnkey basis for several PSUs. The company also has a power-trading licence and is active in this domain through trading of solar power from projects set up under the schemes being implemented by it.

Railways, being a government entity, would attract the leading project developers which would likely bid at very aggressive rates. One such developer already named by the Railway Minister is NLC Limited, a coal mining and thermal power generator. NLC Limited actively participates in solar and wind energy auctions organized by the state government of Tamil Nadu. It has currently has 191 megawatts of operational solar power capacity in Tamil Nadu.

The Indian Railways is reportedly planning to set up a 1 gigawatt solar power park in the state of Madhya Pradesh. The Railways was attracted to the state as it hosts the Rewa solar power park, which is one of the cheapest solar power projects in India. The state’s central location also bodes well for the various regional entities spread across the country.

The current lowest solar power tariffs in India are Rs 2.44/kWh (¢3.8/kWh), while Indian Railways and its regional arms pay around three to four times this rate to various power distribution utilities across the country.

Indian Railways plans to set up 5 gigawatts of solar power capacity over the next few years, which includes a combination of utility-scale and rooftop solar power projects.