The supposed drag in the renewable energy sector remained prevalent during 2014 as the central government changed in India. But the new government is expected to push for renewable energy expansion aggressively.
Solar power capacity added in India during 2014 was 883 MW, consulting firm Mercom Capital reported recently. This capacity addition was 12% lower than the 1,004 MW capacity added during 2013. The fall in capacity can be attributed to the lack of any large capacity auctions and the delay in commissioning of auctioned projects.
The central government (under the National Solar Mission) has not conducted an auction since October 2013 when 750 MW of solar photovoltaic power capacity was allocated in 2 segments of 375 MW each. These segments were differentiated on the basis of whether the projects would be allowed to use imported or Indian-made modules. The projects should have been commissioned in about a year’s time but the Ministry of New and Renewable Energy has not issued any update on them.
Some states, like Andhra Pradesh and Tamil Nadu, also auctioned significant solar power capacity over the last few months. Both these states, however, had their fair share of problems.
The erstwhile Andhra Pradesh was bifurcated into Telangana and today’s Andhra Pradesh, following a bitter political fight. This threw open a huge Pandora’s Box of administrative and legal hurdles for the project developers.
Tamil Nadu also had long-standing issues with project developers, who had secured the rights to develop a large number of solar PV projects. The project developers were not satisfied with the tariffs being offered by the state government, which were the lowest-ever in India. The tariffs have been renegotiated and developers have started to sign the power purchase agreements.
Mercom Capital expects that about 1,800 MW capacity would be added in 2016. This capacity might include projects from Rajasthan, Karnataka, and Punjab, in addition to the phase 2, batch 1 750 MW capacity auctioned in October 2013.
2016 will also see several 100 megawatts of solar power capacity auctioned by the central government. Additionally, several private project developers may also start working on the projects they have pledged to implement.