Cost of solar in India will be lower than coal plants in five years

Ira Magaziner, chairman of Clinton Climate Initiative - a programme of the Willam J Clinton Foundation is hopeful that the cost of solar power generation in India will be lower than coal based plants in the next five years

CCI, which is in the process of setting up four Solar Parks across the world with an overall maximum capacity of 20,000 Mw today signed an MoU with Gujarat government on Monday for setting up in what is billed as world's largest solar project. Talking to Maulik Pathak, Magaziner shared his plans of tapping this sun-shine sector. Excerpts:

So you have finally firmed your plans on Gujarat after exploring for over a year now. Have you identified the location?
We have identified about three to four locations and will be finalising them in the next three to four weeks. About 5,000 hectares of land is required for the project.

We have been to many places where they talk and talk. Finally, we came to Gujarat where people act. CCI is aiming to set up solar park with a generation capacity of 3,000 Mw which could go up to 5,000 Mw. The cost of the project would be about $ 8-10 billion for 3,000 Mw and for 5,000 Mw it would be about $ 15 billion. The feasibility study will be over in 2010 and the plant will start in 2012.

How much solar capacities has Clinton Climate Initiative planned worldwide?
We are planning to set up four solar parks across the globe. We are looking at South Africa, California in US, Australia and Gujarat. All these projects are of the same size as of now. The overall capacity to be generated from solar in the four projects could go as high as 20,000 Mw.

From the progress made so far, we feel that the Gujarat project will be the first to come up. And this would be the world's largest solar project.

The cost of generation for solar power is very high as compared to other fossil fuel fired units.
A 'solar park' can decrease the cost of solar power significantly. The intial cost for setting up the project is very high. Once the plant is set up, its cost comes down. There is no extra cost except managing the mirrors.

You don't have to adjust to any fluctuations in cost. In fact there is no fuel cost. It (solar plant) can go on as long as the sun shines. Ofcourse, we got to make arrangements when the weather is cloudy. As per our calculations, the cost of solar power generation in India will come down to Rs 5-6 per kilo watt hour/unit in next five years. And this will be lower than the cost of a coal fired plant.

How do you propose to finance these projects? How many developers have shown interest in the Gujarat project so far?
As the project is very costly in the initial phases we will arrange finance for the solar developers.

We are already in talks with Asian Development Bank for this. As I said earlier once the project takes off, the cost of generation goes down, so finance is essential initially. About 10 international developers have already shown interest in the project.

The Central government had recently written to the state to consider setting up a solar SEZ in Gujarat. Any plans to park your solar project in the SEZ? Also, do you propose to set up hybrid plants?
We have held talks with the Central government on this. In fact, we are very hopeful about the National Solar Mission.

Along with developers, research and development, even component manufacturers have shown interest in our project. So there is a good export market. We can certainly consider that (SEZ). Hybrid plants are something else that we are considering at the moment.