In April, the government announced the launch of the first micro-grid-powered plant in the country.
A total of 7,000 MW of electricity will be generated by the project, which will be built at Bhadrakakkam, in Thane district of Gujarat.
The power generated will be distributed through a rooftop PV panel and by hydroelectricity in an existing hydropower plant in nearby Varanasi.
A microgrid would be able to provide electricity for an area of approximately 400 sq km, with an initial capital investment of Rs.10,000 crore.
The first of its kind, the plant is expected to be operational by March 2019, at a cost of about Rs.100 per kWh.
In April this year, India launched a pilot project in the southern state of Gujarat for the development of microgrids, which is expected by 2022.
The pilot project is the first of a planned 10 microgrid-powered projects that will be installed across India by 2020.
The microgrid technology has also been used to produce solar energy for several years.
The country has the second-largest number of microgrid projects in the world after the United States.
The Indian government has said the project will help create jobs, boost the economy and contribute to environmental protection.