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Interaction | December 2013

Inter-agency disputes have led to project delays

Many solar projects are delayed because government agencies like GUVNL are fighting for reduction in rates and changes in policies. Shailendra Singh Rao, MD & CEO, Envarrior Consulting Services, in an interaction with ELIZA WAGHMARE, reveals more than 2,000 MW of solar projects in Gujarat are held up.  

The Jawaharlal Nehru National Solar Mission (JNNSM) has an ambitious target of setting up around 20,000 MW of grid-connected solar power by 2022. Do you think this target is achievable as most of the solar projects are getting delayed? What are the major reasons for projects getting delayed?
 The major component for any renewable energy project getting delayed is the government process involved in it. The government has given the renewable purchase obligation (RPO) target to each state, but the states have not been able to adhere to the targets so far. Not implementing the projects properly results in processes getting delayed.

 

Gujarat, despite being the state with the highest installation of solar power, has over 2,000 MW of solar power applications, which are already pending. This is because Gujarat has already launched the RPO but still other agencies like Gujarat Urja Vikas Nigam Ltd (GUVNL) has filed several petitions in the Gujarat Electricity Regulatory Commission (GERC) for reducing the rates and for changes in the policies, etc. Intergovernmental disputes have led to such delays in the projects.

 

Secondly, the funding process is another reason for delays in project. While setting up a solar power project, banks and other funding agencies should be ready to help investors who are interested in setting up these projects. When a company approaches a bank, then the bank delays in assessing the projects. Also there are various other delays from banks' side.

 

Thirdly, there is a scarcity of suitable land, which then leads to further delays.

 

The company recently launched the 'Akshay Urja Gram Sumruddhi' solar-based rural electrification project in India. Please elaborate more on this. Do you think the company will achieve the target [over 50,000 solar street lights across Indian villages] by 2020?
 'Akshay Urja Gram Sumruddhi' is a pilot project in which we are planning to tie up with various corporates in the solar energy space. Each corporate will contribute or donate one or more solar street light as part of the project. Envarrior will be the managing entity and will install solar lights with the help of local village government bodies like panchayats and the gram sabhas. With the help and their permissions, we will be installing solar light every village. Our company targets to set up more than 50,000 solar lights within 10 years. We have already started the project and have been successful in installing 200 solar lights across Gujarat.

 

The project was started in Gujarat and the second phase will take place in Rajasthan and Maharashtra. Phase 2 is expected to start by 2014. So far, solar lights worth Rs 20 lakh have been installed.

 

What are the challenges faced by the power industry in India?
 The major challenge which the industry is currently facing is the unavailability of advanced technologies. In the thermal power sector, the industry hardly has any advanced technologies that can be used efficiently for power generation. Even the Indian panels are not efficient enough to boost the renewable energy segment. The Indian wind power companies do not have advanced wind power machines.

 

The second major constraint is the government policy. Policies have to be revised and should be made investor-friendly so that more and more investors come up and be motivated towards investing. Another major challenge is unavailability of proper infrastructure. Keeping in mind the current demand and power generation, proper infrastructure is required to reach even the remote areas.

 

The government seems to be active in bringing out new reforms for the power sector. What is your outlook on the power sector in India?
 The current power scenario in India looks bleak because there is a huge demand-supply gap for power. This is the prime reason why the government is focusing more on renewable energy projects as they think this sector has immense potential. At Envarrior, our focus is also towards the renewable energy market; but as a consultant. I think, even the solar power industry in India is very nascent.

 

There are number of upcoming power plant projects in India. With regards to wind power segment, there are more than 18,000 MW projects, which are already been established. It is expected that by 2050, the solar power industry will account for 8 per cent of the total power generation in the country. But when we see at a broader picture, the renewable energy sector will account for 26 per cent of the total power demand in the country. Thus, there is a huge demand for renewable energy, and this will help raise new opportunities for the consulting industry.

 

In fact, our Indian power segment is largely dependent on thermal power sector, and new thermal power plants are been established despite of government constraints and lack of power supply sources like coal and nuclear. But despite these projects being established, they are not operational. On one hand, the government is planning to set up new power plants, while on the other hand, the already-established power plants are not operational. So, the questions arises: How will the energy demand be met for operating the existing power plants?

 

The focus has to be on alternate sources of energy, which can help meet the power demand of the country. Therefore, renewable energy is the only alternative available.

 

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