PSU miner Coal India (CIL) has added two more 100% subsidiary companies to its fold — CIL Navikarniya Urja and CIL Solar PV — to pursue its clean energy initiatives. It has also signed a power purchase agreement (PPA) with Gujarat Urja Vikas Nigam (GUVNL) for sale of solar power from its upcoming 100 MW solar power plant in Gujarat.
The new subsidiaries, both West Bengal-based, will function as special purpose vehicles to carry out the coal miner’s green ventures, with the first project being the solar power plant won in the GUVNL-conducted reverse auction.
This takes CIL’s total number of subsidiaries to 10, at a time when the government is reportedly planning to spin off CIL subsidiaries into independent coal producing companies. CIL CMD Pramod Agarwal told FE, however, that the company does not have any information about the government’s plans.
A CIL executive said the PPA is for a tenure of 25 years with a stipulation that the power generated has to be supplied to GUVNL within 18 months from the date of signing the deal. The PPA was signed on Thursday.
The company will execute the Rs 442-crore project through a solar EPC contractor, and a tender issued to finalise the contractor is at an advanced stage. The project will be executed within one year from the date of placement of the work order, the CIL executive said. “We feel upbeat that we could win in our first ever competitive bidding in a solar auction. We will aggressively participate in more such auctions,” the executive said.
Solar power generation lists high on CIL’s diversification portfolio as there are plans to roll out 3,000 MW of solar power generation by 2024 entailing investment of around `13,500 crore. The solar power projects will be funded through the company’s internal resources, bank loans and SPVs. The company is developing necessary in-house expertise and has created a team of competent officers for its solar initiatives.
“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,” the executive said.