P2 Solar, Inc. (PTOS) Proceeds with Mini Hydro Project
Although fossil fuels lead the world’s electricity generation market, more than 60 countries are now using hydropower to meet more than half of their electricity needs. The benefits of producing electricity from small hydropower, together with increasing interest in the sector, have led to improved policies and support from governments. Both are expected to engender new installations in many countries in coming years. P2 Solar is one of the companies developing mini-hydropower projects for public and private sectors that are actively seeking to incorporate it into their electricity consumption profiles and have favorable renewable energy policies.
Mini-hydropower’s attractiveness is partly driven by its ability to quickly respond to changing demand for electricity, water management, and flood control. Small and mini-hydropower generation plants boast a shorter development period, roughly two to five years, compared to large hydropower plants, which usually have a development period of about seven years. Additionally, small and mini-hydro have a higher return on investment attributable to the low capital investment, construction, operational and maintenance costs. Construction of a small hydropower plant also does not disturb the local habitat as large hydropower plants do.
Last month, P2 Solar announced that its subsidiary in India signed a power purchase agreement with the Punjab energy distribution company for its Rajgarh Mini-Hydro Project. A crucial event for P2 Solar, this agreement is a result of the company’s substantial efforts in recent years.
The power purchase agreement provides a payment term for 35 years, at an estimated tariff of US$0.10. These are terms the company believes will facilitate a high rate of return and create free cash flow for the firm. The signing of the agreement means P2 can now close bids for construction and proceed to build the project. The company’s management will be returning to India shortly to move ahead with the project’s development, including selecting the lead contractor and initiating construction.
For more information, visit www.p2solar.com
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