Development Status of Pavagada Solar Park and Projects

Mercom recently visited the Pavagada Solar Park, and gained valuable insight into the nuances and challenges of park development. When complete, Pavagada will be the largest solar park in the world. The following is the first in a series that came from that visit.

Solar parks are the centerpiece of the National Solar Mission’s goal to achieve 100 GW of solar installations by 2022, with 40 GW of solar expected to be installed in over 50 solar parks. Solar parks were conceived as a solution to land acquisition and infrastructure challenges being faced by project developers. Initially, the government was targeting 20 GW of large-scale projects to be exclusively developed in solar parks sized 500-1,000 MW across the country.

Land was set aside in remote areas that were drought prone or in wastelands where land was not utilized for agriculture. Once the land was identified, the responsibility of creating a park with roads, water, and transmission grid infrastructure all fell on the states. Under this model, the states would then facilitate the building of new large-scale solar projects that would be auctioned by various government agencies. Each solar park charged a fee which could include upfront and ongoing maintenance fees to be paid by the project developer, and these were expected to be less expensive than building a project outside of a park.

Project development in solar parks has not been going as smoothly as envisioned. Projects have been auctioned in parks where there are barely any roads and incomplete infrastructure has caused developers to face delays and higher costs. Also, park fees have been steep considering the low-bid environment and incomplete infrastructure. Recently, Mercom reported that there are more than 1 GW of completed solar projects that are unable to be commissioned due to delays in grid infrastructure and evacuation issues.

Against this background, instead if solely relying on interviews with developers and government agencies, the Mercom India team decided to visit one of the largest solar parks in India to get a first-hand understanding of the challenges on the ground and gain a clear view of the realities and bottlenecks.

In this first installment, we are covering the infrastructure around the park to get a detailed understanding of the scope of the park and how it was put together.

The Pavagada Solar Park in the Pavagada Taluk, Tumakuru District of Karnataka is set to become the largest solar park in a single location and will have 2 GW of capacity when complete. The solar park infrastructure is being developed by Karnataka Solar Power Development Corporation Limited (KSPDCL), a joint venture between Solar Energy Corporation of India (SECI) and Karnataka Renewable Energy Development Limited (KREDL).

Land & Investment:

The park is built on 13,000 acres of land and expected to cost ₹144.25 billion (~$2.22 billion) to develop. This total includes infrastructure works (station roads) cost of ₹8.25 billion (~$127 million); a power grid station cost of ₹16 billion (~$246 million); and a solar project cost of ₹120 billion (~$1.85 billion) for 2 GW of solar projects that will be developed in the park.

2,000 MW Pavagada Solar Park Total Investment

Grid and Pooling Stations:

The Pavagada Solar Park was conceptualized in February 2015, and execution began in January 2016. The park’s proposed 2,000 MW of grid-connected solar will be developed in eight blocks of 250 MW of capacity each. For each 250 MW block, one pooling substation of 220 kV has been proposed. Each 250 MW block is then subdivided into 50 MW sub-blocks. Thus, each of these 5 x 50 MW sub-blocks will be connected to a pooling substation through 33 kV or 66 kV underground cables. The voltage will again be stepped up to 220 kV at the solar project pooling station and again stepped up to 400 kV at the proposed 400 kV grid substation by the Power Grid Corporation of India Limited (PGCIL). KSPDCL will establish eight 220 kV pooling stations to evacuate the entire 2,000 MW of solar power generated at the park. The 400 kV grid substation will be connected to PGCIL’s 765 kV station at Madhugiri.

The cost of setting up the solar park will be met partly by MNRE grants and partly from the upfront charges collected from solar power developers.

In September 2016, land possession certificates were awarded to successful bidders in auctions for developing projects in the Pavagada Solar Park.

The most unique feature of the Pavagada Solar Park is that all of the land is leased, which lowers the park’s cost. The KSPDCL is paying farmers ₹21,000 (~$323)/acre/year with a five percent escalation every two year for land that is being utilized for solar park development. Since Pavagada is a drought-hit area, this arrangement works for both parties.

KSPDCL is involved in developing eight power stations to collect power and evacuate it up to the point of the pooling substation. The stations will be 220*33 kV and 220*66 kV. KSPDCL has awarded contracts to Amara Raja and Larsen & Toubro (L&T) to develop these stations. Amara Raja is developing four stations and L&T is developing the other four. The roads with street lights are being developed by KSPDCL.

KSPDCL has spent ₹1.35 billion (~$20.7 million) so far to develop pathways. It has also done augmentation work for 25 km of roads and developed 40 km of new roads so far, said a KSPDCL executive.

The PGCIL is developing the substation that will be used to evacuate power from the Pavagada Solar Park. The substation will have a capacity of 400 kV and will connect to PGCIL’s 765 kV substation at Madhugiri. An engineer on the ground at the Pavagada Solar Park said the substation is scheduled to be complete by March 2018.

Pavagada Park Map

Source: KSPDCL

KSPDCL has replenished water bodies in the region through the use of rainwater harvesting techniques, and all of the water needs of the park are expected to be fulfilled by reservoirs located near each 250 MW block.

During the Pavagada Solar Park visit, a KSPDCL executive said the company leased extra land to ensure that there is ample space to develop all of the required facilities. To develop a 2 GW park, approximately 10,000 acres of land is required, but the company has leased 13,000 acres keeping in mind the requirement for good roads, reservoirs, pooling stations, etc.

Solar Park Fee

According to Mercom data, solar park fees in India vary from ₹3.73 million (~$58,039)/MW in Karnataka to ₹10.58 million (~$164,335)/MW in Gujarat. Compared to other solar parks, the Pavagada Solar Park is expected to be on the lower end.

Pavagada park fees

In Gujarat, fees at the Charanka Solar Park are constantly increasing, and have risen from an average of ₹4 million (~$62,124)/MW to ₹10 million (~$155,311)/MW. The 250 MW Kadapa Solar Park in Andhra Pradesh charges a one-time development cost of ₹4.12 million (~$63,985)/MW. In addition, there are annual operations and maintenance (O&M) charges calculated at a rate of ₹0.32 million (~$4,970)/MW for the first year, escalating annually at a rate of six percent thereafter. Water used by the projects is charged a rate of ₹10 (~$0.16)/kiloliter, which is fixed for the agreement period.

The Ghani Solar Park in Andhra Pradesh has a high development charge of ₹4.2 million (~$65,316)/MW. On top of that, there are additional reoccurring charges for O&M, land leases, water supply charges, and a service charge of 15 percent on all these fees. Andhra Pradesh also has a six percent annual escalation on reoccurring charges.

The Rewa Solar Park is the only mega solar park (over 500 MW) with a lower park fee than Pavagada, as the entire internal evacuation infrastructure of the park was built with a World Bank loan.

 Pavagada Solar Park Project Status Update:

Of the total 2 GW of planned capacity, NTPC has been allocated 1.6 GW, SECI has 200 MW, and KREDL has the remaining 200 MW.

Pavagada park project status

600 MW, NTPC, NSM Phase-II, Batch II: Status – Nearing Completion

According to Mercom’s India Solar Project Tracker, so far, 600 MW of grid-connected solar was auctioned by NTPC in 2015 at the Pavagada Solar Park under the National Solar Mission (NSM) Phase-II, Batch-2. These projects are nearing completion and are expected to be connected to the grid within a few months.

The KSPDCL official also told Mercom that a few pooling stations are nearing completion. “As of December, we can start evacuating at least 200 MW of solar capacity and another 400 MW by January 2018.” The official added that the evacuation would have begun at least a month ago, but it was delayed by flooding caused by heavy rains during the last two months. Vast areas of the park are black cotton soil, which became extremely sticky during flooding and stranded all civil works. Huge quantities of red soil had to be procured to cover the black soil so that work could continue.

Projects under developement in Pavagada Solar Park

The park has secured developers for all 600 MW of the capacity that was tendered under the NSM Phase-II, Batch 2 program. Of that capacity, Adani is slated to develop 150 MW, including 50 MW under the domestic content requirement category (DCR) and 100 MW under the open category, and Tata Power is set to develop 50 MW under the DCR category and 100 MW under the open category.

Meanwhile, Fortum and ACME are each developing 100 MW, while ReNew Power and RattanIndia are each developing 50 MW.

1,000 MW NTPC, Self-Owned Program: Status – Re-Tendered

NTPC initially tendered 1 GW of solar projects in February 2016, but those projects were hampered by delays, bid extensions and cancellations. This prompted NTPC to re-tender that capacity in March 2017 under its self-owned program. The total 1 GW of capacity has been divided into 750 MW under the open category and 250 MW under the DCR category.

200 MW SECI, NSM Phase 2 Batch 4 (Solar + Storage): Status – Proposed Re-Tender

SECI initially tendered 200 MW of solar projects along with battery energy storage systems under NSM, Phase-II, Batch 4 in August 2016, but this process was met with several extensions and delays, causing SECI to cancel this tender along with other projects under the Batch 4 program. SECI plans to re-tender and is currently in negotiations with states to finalize tariffs and power sale agreements.

200 MW KREDL: Status – Re-tendered

KREDL initially issued an engineering, procurement, and construction (EPC) tender in July 2017 to develop a 200 MW solar project in the Pavagada Solar Park, but this was withdrawn in August 2017. The government of Karnataka approved the tenders for 200 MW of solar by KREDL at Pavagada Solar Park in the beginning of 2017. In November 2017, KREDL re-tendered the 200 MW with a bid submission deadline of January 3, 2018.

According to the KSPDCL official, the solar park will employ close to 4,000 individuals from nearby villages for various jobs, both skilled and unskilled. KSPDCL has already conducted skill development workshops, which means that a trained workforce is ready and available.

Image credit: Mercom India visiting Pavagada Solar Park in cooperation with KSPDCL

Priya SanjayPriya currently serves as the Publisher for With more than a decade of experience working in corporate communications, research, and policy, Priya has deep roots in the Indian energy markets and is regularly in touch with policy makers and industry leaders. Priya received her bachelor’s degree from Vidya Vardhaka College of Arts in Bangalore, India for Political Science and Economics and completed her MBA from Bangalore University. More articles from Priya Sanjay.