State-owned CIL on Friday said it has entered into its first ever power purchase pact with Gujarat Urja Vikas Nigam Ltd (GUVNL) for sale of 100 mw solar power.
The tenure of power purchase agreement (PPA) is 25 years, Coal India Ltd (CIL) said in a statement.
"We feel upbeat that we could win in our first ever competitive bidding of solar auction. We will aggressively participate in more such auctions in future," CIL said in a statement.
In March, CIL had won a 100 mw solar power project in a reverse auction conducted by GUVNL.
For the 100 mw bid that it won, CIL was awarded the work with a stipulation that it enters a PPA for establishment of a solar power project and supplies the power generated to GUVNL within 18 months from the date of inking the PPA.
CIL will execute the 100 mw project through a solar (engineering, procurement and construction) EPC contractor. It has already issued a tender in advance for finalising a solar EPC contractor which is in an advanced stage.
The project will be executed within one year from the date of placement of the work order.
The PSU said that CIL is serious in its intent to pursue solar power generation as an alternative green energy source and this lists high on its diversification portfolio.
The company has rolled out a plan for 3,000 mw of solar power generation by 2024.
Around Rs 13,500 crore is planned to be invested in solar power projects through the company's internal resources, special purpose vehicles (SPV) and bank loans.
CIL is developing necessary in-house expertise and has created a team of competent officers for its solar initiatives, the company said.
"Solar will replace coal as a key energy provider in future and we are laying the groundwork to remain relevant in the country’s energy sector. We plan to venture into solar power generation in a big way," it added.
To accelerate its entry into development of cleaner renewable energy sources, CIL on April 16, added two more fully-owned subsidiaries to its fold. These will function as special purpose vehicles (SPVs) to carry the company's stated objectives.
The two SPVs that were incorporated are 'CIL Navikarniya Urja Ltd' and 'CIL Solar PV Ltd'. Both the registered entities will be situated in West Bengal.