Areva Says India Solar-Thermal Costs Fell 35% Since 2010

Areva SA (AREVA) says the cost of building a solar-thermal power plant in India has fallen by about a third since 2010 thanks to local manufacturing.

The French company is building a 21-billion-rupee ($336 million), 100-megawatt plant for Reliance Power Ltd. (RPWR) awarded in a December 2010 auction.

“Today, when I look at future projects, there is a 30 to 35 percent” reduction in how much it would cost to build a similar project, Siddhartha Ghoshal, managing director of Areva’s local solar unit, told a conference in New Delhi today. “That’s mainly due to the localization of materials.”

All 10 of India’s proposed solar-thermal plants, comprising 500 megawatts of capacity, missed deadlines to start operating earlier this year, hobbled by escalating costs and difficulties importing equipment. Only one has been finished so far, Godawari Power (GODPI) & Ispat Ltd.’s 50-megawatt plant, completed in June after a lack of local parts drove the project 20 percent over budget.

Solar-thermal plants use mirrors to focus sunlight on liquids to produce steam for turbines. Areva sourced 60 percent of the equipment for Reliance’s plant in India, though it had to import the mirrors, Ghoshal said. If Indian mirrors had been available, 90 percent of the project’s equipment would have been local and the savings even greater, he said.

Areva said this week that it expects the Reliance plant to start operation by the end of December.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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