• NLC has ‘abandoned’ its plans to set up 130 MW of solar power plants in the state of Rajasthan, according to a local news report
  • Power companies don’t want to purchase solar power for tariffs higher than $0.06/kWh
  • NLC to go ahead with its plan to install PV systems in Tamil Nadu
  • Rajasthan has very big solar plans - with many large corporations planning several thousands of megawatts of PV power plants in the Indian desert state

While India’s central government is going full steam to reach its 100 GW solar target by 2022, some states don’t seem to be sharing the same sentiment towards solar power. Complaints keep pouring in from solar project developers about power distribution companies (discoms) trying to discriminate solar generation technology, in particular through grid curtailment – and this despite the Ministry of New and Renewable Energy (MNRE) pushing for a so-called ‘must run’ status to solar.

Now, discoms in the state of Rajasthan are openly refusing to buy solar power for a rate higher than 4 INR per kWh ($0.060). This has reportedly prompted state run mining company NLC (formerly Neyveli Lignite Corporation Limited) to ‘abandon’ its plans to install 130 MW of solar power plants in the state, reports Indian business newspaper The Economic Times (ET).

Speaking to ET, Managing Director of Rajasthan Renewable Energy Corporation Limited (RRECL) BK Dosi, said, “If a company seeks a solar tariff higher than 4 INR per kWh, it will not be possible for Rajasthan to agree to it. That is the rate at which we are buying solar power under the National Solar Mission.”

A recent report of consultancy Mercom pointed out that sometimes discoms resort to buying cheaper power from power exchanges to save money.

Big plans for solar in Rajashtan
Rajasthan is where the first historically low solar power prices were offered in India. In January 2016, Finnish utility Fortum won a 70 MW project at a price of 4.34 INR per kWh ($0.065) in an NTPC auction. The desert state of India has crossed 1,200 MW of installed solar power capacity – and has some very big plans for solar.

The Adani Group will be setting up a 10,000 MW capacity solar power park in the state. SoftBank Solar Services Private Limited (SBS) has signed on a memorandum of understanding (MoU) with RRECL to install up to 1 GW of solar power capacity as part of Phase-I of the Indian solar program by December 2017 at cost of around $1 billion. It can later be expanded to 4 GW in Phase-II and 5 GW in Phase-III.

At the same time, Suzlon Energy Limited too will be developing solar wind hybrid power projects (SWHPP) of 1,500 MW in Rajasthan as part of Phase-I and Phase-II. The capacity is supposed to require investments of 120 billion INR ($1.8 billion). Wind energy company Suzlon has planned to develop 500 MW PV capacity by December 31, 2017 and the other 1,000 MW capacity within five years from the MOU date on November 5, 2015.

Reliance Power Limited will be setting up 6,000 MW capacity of solar power plants by 2024-25. Essel Infraprojects Limited has plans to develop 5,000 MW PV capacity through three solar parks till 2018-19.

This huge capacity will be coming online in the next few years. If discoms are resistant to buying or connecting the solar plants to the grid now, one wonders how and if these plans will be realized.

The NLC has a power generation capacity of 10 MW for solar as of today. It plans to add at total of 3,990 MW of solar power generation capacity. NLC has already floated projects equal to 260 MW (4×65 MW) out of which two were to come up in Rajasthan’s Barsingsar and two in Neyveli, Tamil Nadu. Another state owned company Bharat Heavy Electricals Limted (BHEL) had won a tender to set up 65 MW PV capacity in Neyveli (see BHEL Bags 80 MW EPC Order).

According to the ET report, while NLC will not be going ahead with the Rajasthan solar projects, the Tamil Nadu projects remain on track.