States across India are competing with each other to install large-scale solar power projects. A number of states have announced ambitious solar power policies and also organised competitive auction of solar power projects, reaping massive response in most cases.
A number of these auctions took place in late 2012 and early 2013. All these projects are now expected to be commissioned in 2014. The likelihood of most of the projects meeting their commissioning deadline is quite high as the state solar power policies have a clause to penalize project developers for any unjustifiable reason. As a result an estimated 2.8 GW of solar photovoltaic (PV) power capacity is expected to be added in India in 2014.
No solar PV power capacity is expected to be commissioned in 2014 under the central government’s program, unless it approves the first batch of the Phase II of the National Solar Mission. The cabinet is believed to be sitting on the proposal for various reasons including lack of funds and restrictions over announcing new projects ahead of state elections.
The largest chunk of capacity expected to be commissioned is from Tamil Nadu. The state distribution company is expected to sign power purchase agreements with projects with cumulative capacity of around 700 MW this year. These projects must be commissioned by next year according to the state’s policy.
Bihar, located in the east, has also issued a request for proposals for solar power projects with a total capacity of 250 MW. The state is completely new to the solar power with little to no installed capacity. As a result, developers are expected to take special interest in the offer. The tariff offered by the state government is also higher than that offered in other states.
We earlier covered the story about the Punjab government issuing a tender for 300 MW of solar PV capacity. The government has auctioned 251 MW solar PV capacity in utility-scale and small-scale segments. These projects are also expected to be commission next year.
Maharashtra, the state with the highest power consumption in the country, is expected to commission the largest solar PV project soon. The state utility has been working on a 125 MW solar PV project for several months now. While the project has been delayed due to lack of clearances, it should be commissioned soon. The government is also believed to be planning to add 350 MW of additional solar PV capacity for which it has sought financial assistance from the Asian Development Bank (ADB). These projects, however, are not expected to be commissioned next year.
Rajasthan, the western state blessed with significant solar energy resource, also auctioned 75 MW of solar PV capacity earlier this year. Some of the leading solar power project developers were awarded the projects. These projects are to be commissioned by 31 March 2015.
The biggest project allocation in 2013 was done by the southern state of Andhra Pradesh. The state government had offered 1,000 MW solar PV capacity in competitive auction. In response, the project developers offered to set up 1,340 MW capacity. The implementation of this program remains in doubt however as project developers want an increase in the tariff offered.
Another southern state, Karnataka, may also see over 100 MW solar PV capacity commissioned over the next few months. Madhya Pradesh, in central India, will see around 150-200 MW capacity commissioned soon. These projects were awarded to companies through competitive bidding in 2012.
In addition to solar PV power capacity, India will also see a number of solar thermal power projects commissioned in 2013 and 2014. These projects are part of the Phase I of the National Solar Mission. These were supposed to be commission by the first half of this year but all projects except one failed to meet the deadline.
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