NEW GOLD RUSH

Everyone wants a piece of the pie in the sky

The three-phase Jawaharlal Nehru National Solar Mission has set up an ambitious roadmap: 22,000 MW of solar power by 2022. The clock is ticking fast for the first phase. By 2012-13, grid connected plants supplying 1,000 MW, rooftop and small plants producing 100 MW and off-grid applications generating 200 MW have to be up and running.

The mission requires drastically ramping up solar energy production in India from the current 8-12 MW of installed capacity. But technology, cost and operational challenges are not easy to overcome. The solar mission has evolved an innovative mechanism to fund this expensive power. The government directed the National Thermal Power Corporation’s trading subsidiary, the National Vidyut Vyapar Nigam, to bundle the expensive solar power with the cheaper unallocated quota of thermal power. So with one unit of solar at a higher tariff (roughly `18) bundled with four units of cheaper conventional energy (`2 per unit), the power utility pays about `5 per unit.

The programme is stuck because of its success. Too many people have applied for setting up solar projects. The Ministry of

New and Renewable Energy says it faces two challenges. One, to provide a levelplaying field for the newer sola-thermal projects to compete with the more established photovoltaic technology. After much deliberation it agreed on

dividing power targets equally between the two technologies. Two, it wants to avoid too many projects queuing up before financial institutions. The ministry has proposed selecting projects in three steps. In the first step it will ‘migrate’ a portfolio of existing projects to this scheme. In the next step it will target only 150 MW by 2010-11. The ministry says migrating the existing solar projects will quicken the pace. Officials say they received proposals for over 700 MW for migration, and have narrowed down the list to eight to 10 projects, adding up to 100 MW.

The government is swamped by applications and says it has little to allocate. It is now considering reverse auction, where project proponents shortlisted based on their net worth will be asked to state the cheapest rate at which they can supply solar energy. Proponents fear this approach could see big players underbid, which would lead to unfeasible projects.