• Reeling under power outages that have almost become a norm in the state this summer, the Indian state of Karnataka has signed a power purchase agreement with the Solar Energy Corporation of India (SECI)
  • Five state owned utilities will buy solar power from SECI for $0.07 per kWh
  • SECI is reported to have assigned the job of generating and supplying this clean power to 10 private companies by offering them VGF

To meet its power demand, the state of Karnataka in India is set to buy solar power from 1 GW of power plants from the Solar Energy Corporation of India (SECI). A total of five state run utilities in the state will purchase this power for a total of 4.50 INR per kWh ($0.07).

Speaking to Indian business daily Mint, Karnataka’s Energy Minister DK Shivakumar, informed that this rate is ‘almost comparable to the rate at which the government buys power from other conventional sources’.

Bangalore is home to several big companies, especially IT and e-commerce firms. It is also referred to as the Silicon Valley of India. It is Bangalore that takes up almost 25% of the total power demand of 12,000 MW, according to the report. Summer this year has been pretty harsh in the entire country with several regions facing severe droughts. There has been sudden spikes in power demand, which the state has been unable to manage with its hydro-electric and thermal power plants. Frequent power outages had become a norm. Hence the decision to buy solar power from SECI.

The utilities have signed 25-year power purchase agreements with SECI. The clean power will start coming to Karnataka in the next 18 months. The Mint reported that SECI has outsourced power generation and supply to 10 private companies, providing them viability gap funding of 10 million INR per MW ($148,000). These companies have identified plots in 13 districts of the state.

As of April 30, 2016, the total installed solar power capacity of Karnataka stood at 145.46 MW. The state is aiming for a total of solar power capacity of 7,000 MW by 2021 (see Karnataka Revises Solar Policy).