Gas utility GAIL and BHEL to jointly develop solar projects

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State-owned natural gas provider GAIL (India) and power generation equipment manufacturer Bharat Heavy Electricals Limited (BHEL) have signed a Memorandum of Understanding (MoU) for cooperation in development of solar based power projects.

Under the deal, GAIL shall be the project developer and BHEL shall act as an engineering, procurement, construction and project management contractor. This will help both the companies to leverage their competitive strengths to build substantial portfolio in solar power projects.

BHEL shall also provide operation and maintenance services during the initial period upon becoming successful bidder.

GAIL and BHEL will jointly undertake commercial solar power projects through participation in tariff/viability gap funding (VGF) based competitive bidding process.

Notably, as part of the viability gap funding scheme for 12 GW of new solar, last month SECI invited bids for setting up of 2 GW of grid-connected solar PV projects. The projects, to be developed on ‘build, own, operate’ basis, can be located anywhere in India for self-use or use by government entities at maximum fixed tariffs of Rs 3.50/kWh.

GAIL’s entrance into the solar industry is noteworthy, given the utility’s dominance in India’s soaring gas sector. In January this year, it commissioned a 5.76 MW rooftop PV array at its Pata petrochemicals plant in Uttar Pradesh, which is claimed to be India’s second largest rooftop solar PV power plant behind Tata Power’s 12 MW installation in Amritsar.

BHEL has been in the field of design, engineering, manufacturing, installation and commissioning of solar power plants for over three decades and has a portfolio of more than 700 MW. It is said to be the only company in India that manufactures almost the entire range for solar equipment, including solar cells, solar modules, SCADA, inverters, power transformers, switchgear and modules mounting structures with tracking system.