Indian Solar Thermal Developers start giving excuses to escape their stupidly low bids

We at Greenworldinvestor have always been of the opinion that most solar thermal plants will never come up in India, given the atrociously low bids made by companies such as Reliance and Lanco during the reverse auctions of Phase 1 of the Jawaharlal Nehru Mission. While the solar PV developers were bailed out by the crash in the solar panel prices, nothing of that sort has occurred for the solar thermal developers. CSP technology has seen bankruptcies as solar PV costs have declined at a tremendous pace. CSP suffers from a number of disadvantages as compared to solar PV besides the cost.

Solar thermal developers have already got an extension of 10 months and still they are nowhere near completing their solar thermal plants. Only one developer has completed the 50 MW plant, while others are still sitting on their asses waiting for divine intervention to bail them out.

Now these utilities Lanco and Reliance are starting to put the blame on the ministry for the lack of their own performance and stupidity. They are citing wrong DNI data for not completing their plants. Their excuse is that they got the wrong date from the ministry on solar radiation for their plants, which will affect their return projections. This argument simply does not hold water almost 2 years after they won the awards. Did it take them two years to measure the solar radiation data and come to this conclusion? Was it not their responsibility to find the solar radiation data before committing to plants with investments in hundreds of millions of dollars?

It is very clear that these developers have no intention of building these plants and will keep coming up with excuses to escape. This is the whole problem of PPP partnerships with these unethical Indian business groups. Reliance Power is infamous for not building its UMPP plant in AP because the coal prices went up making its stupidly low bid uneconomical. The companies do not understand the concept of risk management and know that the Indian government filled with corrupt politicians will change the rules of the game in their favor later on. If things work out well, they will make tons of money and if it does not, they will get bailed out. So simply bid stupidly in auctions and win out in either case.

 Solar power plants of Reliance Power, Lanco and others, are seeking higher tariffs saying that the data on solar radiation provided by the government was faulty which has led to lower generation. Several companies have filed petitions before the central regulator, seeking higher tariffs jut as a panel chaired by Deepak Parekh recommended compensation for Tata and Adani’s higher costs of generation.

At least three solar thermal power project developers with mandate to commission total 250 mw of capacity have moved petitions before the Central Electricity Regulatory Commission (CERC) seeking higher tariff.

Reliance Power subsidiary Rajasthan Sun Technique Energy, Lanco Group’s Diwakar Solar Projects and Godawari Power and Ispat owned Godavari Green Energy, in their respective petitions, claimed that the solar radiation data shared by ministry of new and renewable energy (MNRE) are incorrect and solar thermal projects may not be able to generate power as per the projection.

However, it turned out 15%-20% less than ministry’s projections for solar radiation, which is the only fuel for our kind of projects.