Connect with us

Hi, what are you looking for?

Image courtesy of Cynthia Shahan, CleanTechnica.

Clean Power

Indian Renewable Energy Companies Continue To Face Financial Challenges

Financial and project implementation troubles for Indian renewable energy developers do not seem to cease, with little to no solutions to the existing challenges and new ones coming up frequently.

Financial and project implementation troubles for Indian renewable energy developers do not seem to cease, with little to no solutions to the existing challenges and new ones coming up frequently.

We recently covered a story about several solar power developers who were awaiting payments for the energy their power plants generated over the last few months in the state of Telangana. As many as 200 solar power project developers await payments of US$300 million for energy generated since July 2018. These developers were facing significant financial strain and a threat of their projects declared non-performing assets and rating of their parent companies being downgraded.

A similar situation has now developed in the northwestern state of Rajasthan. This time the delayed payments have put a strain on wind energy project developers. Power distribution utilities in this state have failed to pay at least US$122 million to wind energy project developers since September last year.

Despite a direction from the regulators to renew the power purchase agreements, they have not been renewed. However, the utilities continue to procure energy from these wind energy projects and have made no payments for the same. Utilities claim that the delay in payments to wind energy developers is because they themselves do not have sufficient funds.

Indian media agency recently reported that a 600 megawatt solar PV project planned in the southern state of Andhra Pradesh faces uncertainty. The project was scheduled to be implemented by one of India’s leading solar power companies, Acme Solar Holdings. The project was allocated to the company, following a competitive auction, at a tariff of Rs 2.59/kWh (3.78US¢/kWh) last year.

According to the reports, NTPC Limited, the company that held the competitive auction and allocated 2 gigawatt capacity among various major solar power developers, was supposed to arrange for a power purchase agreement with Acme Solar and a power sale agreement with the utilities of Andhra Pradesh. NTPC reportedly has failed to do so. As a result, Acme has written a letter to NTPC claiming that the power plant is no longer financially viable and has asked for its bank guarantees returned.

It is interesting to note other aspects of the project, and the competitive auction conducted by NTPC Limited. The Indian government imposed safeguard duties on imported solar modules in the duration between the issuance of the tender and the competitive auction, leading to widespread confusion among the stakeholders.

NTPC had clarified at that time that if Acme is willing to absorb the additional financial impact of the safeguard duty the tariff for the project shall be Rs 2.59/kWh (3.78US¢/kWh), else it would be reduced to Rs 2.28/kWh (3.33US¢/kWh). A similar option was presented to other bidders as well. The reports do not clarify if Acme has refused to bear the financial impact of safeguard duty. However, it is significant to note that the lowest tariff bid in India for a solar PV project was also submitted by Acme Solar Holdings at Rs 2.44/kWh (3.56US¢/kWh) and is considered highly competitive, and even financially unviable by some analysts.

The same media reports also quoted NTPC officials claiming that other project developers successful in the 2 gigawatt auction are expected to commission their projects on time. However, if NTPC has indeed failed to enter into power sale agreements with the utilities of Andhra Pradesh, it also seems highly unlikely that those projects would see the light of day.

Recently, the Ministry of New and Renewable Energy appointed a three-member committee to look into and resolve such disputes over projects auctioned by the Solar Energy Corporation of India (SECI) and NTPC Limited.

Image credit: Cynthia Shahan

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Former Tesla Battery Expert Leading Lyten Into New Lithium-Sulfur Battery Era — Podcast:

I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...
If you like what we do and want to support us, please chip in a bit monthly via PayPal or Patreon to help our team do what we do! Thank you!
Written By

An avid follower of latest developments in the Indian renewable energy sector.


You May Also Like


Nuclear for commercial ships is so obviously flawed from a business perspective that I didn't even bother to include it in my quadrant chart...


The future of all ground transportation and an awful lot of aviation and marine shipping being electric, low-carbon, quieter, and a lot less smelly...

Climate Change

Don't blame ChatGPT for some humans being venal con artists or deluded fabulists, and don't blame it for other people buying into the nonsense.


As a resident of a condo without central air conditioning, I’ve been feeling the harsh effects of climate change, particularly during the sweltering summers....

Copyright © 2023 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.