State-run Energy Efficiency Services Ltd (EESL) is in talks with oil major Royal Dutch Shell for a joint venture to invest over Rs 40,000 crore in setting up 5,000 MW decentralized solar plants with storage for low-cost electricity in rural India. Thus offering round-the clock power at an attractive price of ₹3.50 per unit for 25 years.
They plan to source used batteries from car manufacturers, which are proposed to be used as stationery storage devices.
EESL is also in talks with at least two other companies for a stake in the venture. Going by a regular debt:equity ratio of 80:20, the joint venture (JV) would invest about ₹8,000 crore.
Sources said EESL can hold 51% in the JV. They said Shell is keen on the partnership as it is eyeing opportunities in India’s renewable energy space.
The joint venture is placing its bets on the fact that state distribution companies incur heavy losses in supply to rural areas and towards subsidies to agricultural consumers.
The cost of supply to rural consumers in states like Haryana, Punjab, Uttar Pradesh, Karnataka, Tamil Nadu and Maharashtra is upwards of Rs 6 per unit.
They have proposed that if the state governments replace all gram panchayat street lighting with LEDs, it will charge Rs 3.87 per unit of electricity supply for 25 years.
In addition, if the inefficient agricultural pumps are to be replaced with efficient ones, the tariff will be set at Rs 4.50 per unit for 25 years.
EESL is working on creating multiple revenue streams from land offered by state governments and taking clean energy to the demand point while eliminating line losses and costs.
This is a Businesswire Feed; edited by Clean-Future Team