Finnish energy company Fortum has successfully commissioned its largest solar power project in India. News of the project being commissioned was reported widely by German EPC contractor Belectric.
Fortum won this project in a competitive auction in June 2018. The company bid a tariff of Rs 2.85/kWh. The project is located in the Pavagada solar power park in the south Indian state of Karnataka. Fortum already operates a 100 megawatt project within this solar park.
In a press release issued at the time of securing the project in June 2018, Fortum stated that the project will entail an investment of €120 million and would be commissioned in Q3 2019.
The project has certainly slipped on its commissioning deadline. Correction: Fortum notes that, “As per the PPA we were supposed to complete 250 MW by end of August 2019, the actual completion timelines were: 150 MW was completed in July 2019 and 100 MW was completed in first week of August 2019, hence the project has not slipped any of the deadlines.”
The 250 megawatt project was Fortum’s last major win in the Indian market. Several developers in the Indian market have faced challenges in the past, and as a result some well known names have vanished from competitive auctions, Fortum one among them.
Fortum had secured another 250 megawatt project in an auction conducted in January 2019. However, the auction and capacity allocation were cancelled. Three companies — Fortum, Softbank-based SB Energy, and Engie — lost a total of 700 megawatts capacity as a result of the cancellation.
Challenges of the Indian solar market were also acknowledged by Belectric for whom this was the largest solar project in India. Ingo Alpheus, CEO of Belectric Solar & Battery, said that despite these challenges India remains one of the largest solar PV markets and the company will continue to work in India. Belectric expects to achieve 1 gigawatt of installations this year.
A number of companies have been facing delays in commissioning their projects. The delays are not limited only to solar but wind energy projects as well. Leading reasons for delays include non-availability of transmission infrastructure and land to develop projects. Long-standing dues worth millions of dollars has greatly limited several companies’ ability to participate in new auctions.