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.

Bloomberg

Of the 500 megawatts of projects due to be completed in February and May, only a third of that capacity may be ready on time, said Tarun Kapoor, joint secretary at the Ministry of New and Renewable Energy. Three of the 10 ventures are unlikely to be built, he said in an interview in New Delhi. Aurum Renewable, which was considering turbines from GE, Siemens and Sumitomo Heavy Industries Ltd. (6302)’s Shin Nippon Machinery Co. for its 20-megawatt project, didn’t respond to e- mails and phone calls seeking comment. Lanco didn’t respond to requests for confirmation of a delay to its 100-megawatt plant. The company is also the contractor for KVK Energy & Infrastructure Pvt.’s 100-megawatt project.