The Indian government’s plan to boost solar power capacity with the help of the defence forces has run aground.
The Indian defence forces have clarified to the government that they do not have any surplus land available to set up large-scale solar power projects. The Ministry of New and Renewable Energy had initially planned to set up 1 GW of solar power capacity at currently unused land owned by the defence forces.
The Department of Defence and Services has now clarified that it would use the large tracts of unused land for military purposes only. This has forced the Ministry to reduce its initial capacity addition target to just 300 MW.
This capacity is expected to be fully installed by 2019, and the Ministry would provide a viability gap funding of Rs 750 crore ($125 million). These projects will sell electricity at a fixed rate of Rs 5,500 ($91.7) per MWh for a period of 25 years.
The Indian government had planned an elaborate ecosystem of solar power development through this program. The government had decided, in August this year, that it would not pursue anti-dumping investigations of imported solar PV modules. In order to support domestic solar module manufacturers, the government decided to ask its own institutions like the defence forces and public sector companies to set up solar power plants.
The understanding was that projects set up by these institutions would be able to use domestically manufactured solar PV modules without violating the WTO rules since they are government-owned entities.
As a result, the government may now have to ask state-owned power companies like NTPC, BHEL, and NHPC to enhance their own solar power capacity addition targets.
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