Tuesday, February 25, 2014: The 2 GW capacity-worth of new solar energy projects at massive scale will soon be constructed in India soon as the finance minister P Chidambaram claimed during his interim budget speech. Chidambaram said that given the success of India’s Jawaharlal Nehru National Solar Mission (JNNSM), the government now aims to see the development of four large-scale solar energy projects during 2014-2015.
The four projects are located at Jammu, Kashmir, Rajasthan, and Gujarat. The government’s plans are already under way for a multi-stage 4 GW ‘ultra-mega’ solar power project in Rajasthan, with six PSUs involved in the project, under a signed memorandum of understanding (MoU).
However, there are concerns over these new ‘ultra-mega’ solar power projects, as it may be difficult to finance them under the JNNSM’s payment mechanism. The Indian government is already considering project bids for 750 MW of PV, which will be supported through a ‘viability gap funding’ mechanism.
In a CleanTechnica report, Ritesh Pothan, the Renewable energy consultant expressed concerns that whether this mechanism will successfully enable the 2 GW of projects proposed by the ministry due to the unlikely speed of payouts under the viability gap funding process.
Pothan raised the questions, in the same report, whether or not developers will be able to raise finance at the low government rates? And, whether or not such large projects are politically viable given the elections approaching in May?
Most analysts say that the current government’s approvals are likely to be under scrutiny, since these plans come at such short notices, which is likely to be difficult.
The government in recent times approved many solar power projects under various state governments schemes and the MNRE-JNNSM programmes.
