Every Solar thermal Plant in India is delayed, still the Government wants to award more

Every single solar thermal plant awarded under India’s federal subsidy program (JNNSM Phase 1) is delayed according to MNRE. Note I have been critical about solar thermal technology for a long time now because of the manifold problems that the technology faces. The sharp erosion in solar panel prices has made solar PV technology move miles ahead of the solar thermal technology. However, the Indian government wants to give an equal share of solar thermal plants to developers under JNNSM.

Read on GWI Advantages and Disadvantages of Solar Thermal Energy.

Solar Thermal Plants fail to meet the timelines, Government ready to grant Extension rather than Penalize

All solar thermal plants are delayed because of one reason or another and if the contractual guidelines are followed, they would have to pay a penalty of Rs 230 crores. However, in our country crony capitalism rules the roost and the RE secretary wants to give these plants an extension of 10 months. Note India’s power regulator and ministries have been known to give more sops to corporate groups, even when they don’t meet the language of the contract. In the recent UMPP case, all big power companies such as Adani Power, Tata Power and Reliance Power are set to get higher power rates despite the contract clearly stating the price of the contract to be a fixed one.

Indian Government supports Large Power Plants instead of Rooftop Plants and Off Grid Solar

India’s solar power policy is flawed anyway, as the government is giving subsidy to large power plants instead of small solar rooftop plants and off grid solar energy. These plants are not helping improve solar technology nor are they making a big difference in India’s massive power deficit. All they are doing is benefiting some large corporate groups, who are not penalized even when they don’t meet the generous contract terms. Lanco which is building these 2 plants has not indicated a time when it would complete the two plants, while others are also taking their own sweet time. MNRE instead of changing focus is all ready to award 500 MW to solar thermal power during the next phase. Note these solar thermal plants are being supplied by Siemens who has left the business citing its non-viability. Many other top global solar thermal technology providers have shut shop as well. But Indian bureaucrats are living in the dark ignorant ages as usual.

Mint

India’s ministry of new and renewable energy is seeking to defer penalties on about $1 billion of solar-thermal power projects that are delayed by a lack of water, financing difficulties and equipment shortages.Seven projects totaling 470 megawatts in capacity by companies including by Godawari Power and Ispat Ltd., Reliance Power Ltd. and Lanco Infratech Ltd. that were to be ready by May, aren’t operational, Tarun Kapoor, joint secretary at the ministry, said in a phone interview from New Delhi. The projects could potentially forfeit about Rs230 crore ($42.5 million) in performance guarantees, according to rules when the contracts were awarded in December 2010.There’s obviously a problem since all are delayed, Kapoor said. This is the first time solar-thermal projects are being built in India and we want them to succeed. An expert committee at the ministry is recommending a 10-month extension for the projects, he said.

A 100-megawatt project owned by billionaire Anil Ambani’s Reliance Power is about six months behind schedule, Kapoor said. The Indian projects, ranging from 20 megawatts to 100 megawatts in capacity, are using turbines from suppliers including Siemens AG, General Electric Co. and Areva.India has built 1,686 megawatts of solar capacity and expects to award an additional 500 megawatts of solar-thermal capacity by 2017, Kapoor said. The outcome of the plants under construction could affect those plans, he said.

Our earlier article why:

Most Indian planned Solar Thermal Plants under JNNSM might not get built

We have repeatedly highlighted the drawbacks of solar thermal energy vis a vis crystalline solar panel technology. Solar Thermal Plants are getting replaced or mothballed altogether because of the high costs and long build times. India had awarded nearly 500 MW to 5 solar energy developers under JNNSM Phase 1 which were supposed to get built by Feb to May 2013. However only 2 of those plants are under construction while others are delayed ostensibly because of lack of heat transfer liquid availability. What we think is that many of these solar thermal plant developers will default and never build these plants given that they won’t show any profits. Reliance Power has not gone ahead with its 4000 MW ultra mega thermal power project in AP because the rise in coal costs has meant that they company can only sell power at a loss. Some of these solar plant developers would have come to the same conclusion given the high costs of solar thermal technology. Note solar panel farms have been mostly built on time, thanks to the collapse in solar module prices which led even the low ball bidders to escape losses.

Solar Thermal Plants under JNNSM

1. Lanco Solar  100 MW  Rajasthan
2. Reliance Power 100 MW Rajasthan
3. KSK Energy 100 MW Rajasthan
4. Godavari Power 50 MW Rajasthan
5. Aurum Renewables 20 MW Gujarat
6. Corporate Ispat  50 MW Rajasthan
7. Megha Engineering 50 MW Andhra Pradesh

JNNSM Solar Thermal Plants saw huge discounts to base price

India’s ambitious JNNSM Plan to build 20 GW of Solar Capacity by 2022 has seen projects being awarded for 479 MW of Solar Thermal Projects under Phase-1. The Solar Project Bidding was expected to be extremely competitive and it turned out to be exactly that with discounts of  more than 30% being offered to the base price of RS 15.31 for Solar Thermal generated Electricity. Note Rs 15.31 was determined to be a decent price on which a Solar Thermal Plant Developer could get decent returns just a year ago. This means that a 30% Discount would lead to zero or very low returns for the Solar Thermal Winners. According to news reports there are 7 winners for these Solar Thermal Plants 6 of which will come up in Rajasthan which seems to be the biggest winner of these Solar Subsidy Scheme. Andhra Pradesh is the only other state to win a Solar Thermal Project. There were about 60 applicants for the Solar Thermal Part of the Phase 1 JNNSM Bidding from which 7 have been selected.

Solar Thermal Technology under Siege

Solar thermal technology received a huge blow when the biggest global green company Siemens abandoned solar energy altogether taking a massive loss on its $400 million acquisitions. Areva also announced that it will not build a 250 CSP plant in Australia as it did not get financing. Note 2-3 solar thermal plants in USA have already been converted into solar panel farms.