Tata Power plans geothermal, solar for Gujarat

India's largest private power utility is exploring the possibility of building two 5-megawatt renewable energy power plants in Gujarat.

Mumbai-based Tata Power, part of the Tata Group, said it plans to strengthen its renewables portfolio with power plants using geothermal or solar technology. The projects would come under a partnership with the government of Gujarat, a state in western India.

Last week, the Gujarat government announced a policy to encourage solar energy through March 2014 for projects between 5 and 500 MW. Gujarat plans to sign 25-year fixed-rate tariff contracts that exempt companies from paying an electricity duty on solar power sent to the grid or used on-site.

Tata Power has an installed generation capacity of 2,300 MW, but the company is aggressively adding renewables to its sources. It currently generates renewable energy from geothermal, hydro, solar and wind projects.

In September, Tata Power announced plans to buy a 10 percent stake in Australian enhanced geothermal systems firm Geodynamics for $37 million. As part of the deal, Tata planned to review the potential of geothermal prospects outside of Australia (see Tata Power buys stake in Australia's Geodynamics).

In December, Tata Power announced plans to increase its wind power production capacity from 200 MW to 500 MW by 2011 (see Indian companies order 300MW in wind power).