Bidding exposes solar tariff game | Centre for Science and Environment


Bidding exposes solar tariff game

The solar mission is not showing up

By: Ruhi Kandhari

Bidding for the first phase of Jawaharlal Nehru National Solar Mission has put a question mark on the ambitious target set to enlarge the country’s energy needs through the solar route. Out of the 30 short-listed bidders, almost 20 have had nothing to do with solar photo voltaic (PV) power. It seems as if the projects they promise may soon turn unviable.

Experts say that Indian solar power story has become a bubble that could burst anytime. These sunrise sector companies are willing to change the proposed tariff to serve their interest. They are even ready to settle for lower profits to enter the market.

Asked if the discounts were viable in this case, Deepak Gupta, secretary, Ministry of New and Renewable Energy, said, “Bidders must have bid with their eyes open. They would not want to lose their guarantees.” For example, a company that would offer a tariff of Rs 11.91 per unit would have to provide bid guarantee of Rs 15 crore.

The new power producers could resort to using poor quality equipment to save cost. A solar technology expert quoted the analysis of Mercom Capital, a clean energy market intelligence service company: “As evident in Spain and other countries, lack of expertise and qualifications among project developers can lead to poorly executed projects, producing at much lower capacities.”

While one of the objectives of the solar mission is to support indigenous industry, the government may postpone mandatory use of locally made PV cells in solar power projects. This may allow entry of cheaper foreign technology. “We will consider mandatory clause for PV cells only after evaluating progress on projects that have been bid in the first round. If need arises, we may postpone its implementation to allow more global technologies to enter the Indian market," Gupta was quoted as saying in newspaper reports.
 

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