The Karnataka Renewable Energy Development Limited (KREDL) on June 2, 2025, released a Request for Proposal (RfP) to develop a 100 MW solar photovoltaic (PV) project in the Pavagada Ultra Mega Solar Park (PUMSP), one of India’s largest contiguous solar parks. This tender is significant not only because it expands Karnataka’s leading role in utility-scale solar, but also because it carries forward lessons from earlier phases of PUMSP to optimize execution, financing, and grid integration.
Background: Pavagada Ultra Mega Solar Park (PUMSP)
PUMSP, located on the Karnataka–Andhra Pradesh border, spans over 13,000 acres of government-owned land. Since its inception in 2017, Pavagada has been awarded in tranches totaling 2,050 MW of capacity—each tranche partitioned into 200 MW blocks. By early 2025, around 1,400 MW had been commissioned, making it the second-largest operating solar park in India after Bhadla (Rajasthan). Key challenges in Phases I–VI included:
- Tariff competitiveness pressures as module and balance-of-system (BoS) costs fell, driving discovered tariffs below ₹2.50/kWh by 2024
- Land leveling and soil stabilization on undulating terrain prone to dust storms
- Transmission bottlenecks leading to curtailment during peak generation hours
- Financing delays caused by high interest rates and varying State Bank of India (SBI) benchmark rates
KREDL’s new RfP for 100 MW (Phase VII) seeks to leverage these lessons: a simplified land lease model with graded rent, pre-approved pooling substations, and a ceiling tariff band to ensure viability for both developers and Karnataka Solar Power Development Corporation Limited (KSPDCL), the implementing agency.
| Parameter | Details |
|---|---|
| Capacity | 100 MW (50 MW designated as “must-run” to meet Karnataka’s RPO targets) |
| Bid Submission Deadline | July 8, 2025 |
| Subtotal Metering | Modules to be connected via 33 kV collector network to 220 kV Pavagada pooling substation (Phase VI, pre-commissioned) |
| Tariff Quoting | Reverse auction under capped tariff; max quote ₹3.00/kWh (levellized) for 25-year PPA with KSPDCL |
| Land Lease & Evacuation | KREDL to lease land for 30 years at ₹20,000/acre/year (CPI-indexed); state to upgrade substation; developer to bear 5 km feeder line cost |
| Performance Security | 2% of PPA value via bank guarantee; project to be commissioned within 12 months from LoA |
In the earlier phases (I to VI) of the project, discovered tariffs consistently declined from ₹3.35/kWh in Phase I (2017) to ₹2.49/kWh in Phase V (2023). This downward trend was primarily driven by multiple factors, including a significant reduction in the cost of monocrystalline solar modules—prices dropped by approximately 30% since 2020. Additionally, economies of scale played a crucial role as EPC vendors streamlined and standardized their processes, resulting in cost efficiencies. Furthermore, developers benefited from improved access to low-cost debt, facilitated through state-collateralized loans provided by KSPDCL.
For Phase VII, given a higher ceiling (₹3.00/kWh), analysts expect discovered tariffs to cluster around ₹2.70–2.80/kWh, reflecting incremental costs for grid-upgrade deposits and curtailment risk mitigation. Major domestic IPPs—Adani Green, ReNew Power, Tata Power—are likely to participate, using their existing PUMSP footprints to optimize balance-of-system (BoS) logistics.
KREDL’s 100 MW tender represents the final large-phase offering at PUMSP (capacity allocated is now ~2,150 MW). Once commissioned (expected by December 2026), PUMSP will approach 85% utilization, cementing Karnataka as a national leader in solar generation.
