Nov 30 2010
India’s largest private power producer, Tata Power, said that the company is not participating in the auction of the National Solar Mission, as the terms laid down by the government would affect the feasibility and profitability of the projects. The government’s plan is not attracting the attention of firms, which have the resources and skills to make the mission a success.
This can be a major setback for the solar industry development in the country. Many prospective investors such as Areva and the World Bank have recognized India as one of the prospective market. Most part of the country is getting about 300 sunny days per year.
European countries such as Germany, France and Spain are reducing solar subsidies, which result in robust investment and increasing the costs of state renewable energy. India is looking to shun such issues by giving capacity to developers providing the highest discounts, which equals the selling rate of their electricity.
Tata Power’s executive director of strategy and business development Banmali Agrawala, said that this strategy by the government could rebound. The government fixed an initial trading price of Rs. 15.31/kWh for solar thermal projects and Rs. 17.91/kWh for solar photovoltaic projects. The developers submitted the bids with discounts of up to Rs. 4 to those rates fixed by the government, he added.
Tata Power said that the company could not raise loans from banks under the mission, as it is ambiguous that NTPC, the selected power buyer, is funded enough to pay the developers. The company is constructing a 25-MW capacity solar power facility in western Gujarat through a separate state program.