India Plans of doing 34 GW of Solar Auctions, Sounds like a Fairy Tale built on Smoke

Solar Auctions India – Challenges

The Indian government plans to substantially ramp up its plan to hold solar auctions as it wants the whole 100 GW of solar energy to be tendered out by 2020 so that plants can be built in time by 2022 to meet its ambitious target. However, teething problems are creeping up which did not exist when the solar energy penetration was much lower. Auctioning of solar capacities is the easiest part, as the government has to run a bid process management process by copy-pasting the tenders that it has been doing in the past.

It is the infrastructural issues in getting the power from these plants to reach the consumer that is the hard part and the government arms are ignoring. SECI which is in charge of running the tender process has been happily doing it without a care in the world as it gets a percentage of the fees in running the process. It does not have to worry too much about where the transmission capacity will get built to move the power from these gigawatts of solar plants to the consumption centers. Complaints by the developers that the inter-state transmission system is not ready to plug in their solar projects have already led to the delays in the tender run by NTPC for 2000 MW. The problem remains as the tender has been postponed again. Building a transmission project in India can take up to 5 years while a solar project can be built and run in around 1.5 years.

Read about other issues and challenges in solar power development in India.

Another elephant in the room is the problem of integrating the huge amounts of solar and wind capacities that are being built. India does not have enough storage or peaking plants that can manage the grid balancing that will be the requirement with huge flows of intermittent solar power. Already some states are curtailing solar power despite its must run status. As the capacity of solar energy keeps growing exponentially every year, this problem could become acuter as India’s transmission system is creaking along at best. The Indian power distribution system has seen inadequate investment over the years and is severely incapable of handling renewable energy in large amounts.

Just announcing large generation capacities will not help as the generation problem has been more or less solved with solar energy getting cheaper than all other forms of energy. Developers in India should be allowed to compete on their own without auctions. Focus and investment by the government now should increase on integrating these solar energy sources into the grid so that it can allow the common man to benefit. Despite generation prices of wind and solar falling drastically, the power prices being received at the consumer point keep increasing every year.