Lanco Beams as India Targets 68,000 Megawatts of Solar Power by 2022

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--After launching a 75-megawatt (MW), photovoltaic (PV) solar project in India's Maharashtra state, Lanco Solar, a fully owned subsidiary of Lanco Infratech9 (BSE:LITL.BO) (Gurgaon), claims to be the country's top solar power developer. "It is a strategic win for us," said V. Saibaba, the chief executive officer of Lanco Solar. "It not only puts us firmly as the top solar power developer in the country, but also helps us considerably in securing our supply chain competitively."

Lanco is developing the project in a consortium with Juwi Renewable India Limited (Bangalore), the local division of Juwi Holding AG (Worrstadt, Germany). The contract for the $196 million solar plant at Dhule was issued by Maharashtra State Power Generation Company (MAHAGENCO).

"In a couple of years, we see solar power costs coming down 7 to 8% per unit per year," Saibaba said. "Between 2003 and 2010, solar power generation globally has grown from 3,000 MW per annum to 17,000 MW per annum. Our group company, Lanco Solar, has also signed power purchase agreements for 141 MW of solar power with NTPC Vidyut Vyapar Nigam under the national Solar Mission, and with Gujarat Urja Vikas Nigam under the state policy." Included in the projects are the 100-MW solar thermal facility, which is under construction in Rajasthan, and 35 MW of targeted capacity in Gujarat.

The bullish outlook for Indian solar projects is backed by the recent KPMG India report that forecast 68,000 MW of solar power for the country by 2021-22. This figure is 7% ahead of the government's current target, which is an additional 20,000 MW of solar power by 2022. Currently, solar power installations of all types and sizes have a total capacity of about 40,000 MW. The total installed power generation capacity in India currently stands at just less than 180,000 MW.

The prediction of exponential growth in the sector is based on falling costs, technological innovation, economies of scale and the prospect of low-cost equipment production centers. At the same time, the cost of generating thermal energy is expected to increase 4% to 5% every year as the cost of hydrocarbon fuel inputs, such as coal and gas, and the cost of greenfield construction projects are constantly rising.

Depending on the type of solar power technology and the solar radiation conditions at the installation site, the cost per unit of solar power generation varies between $0.27 to $0.31. Traditional coal-based power costs about $0.11 per unit.

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