India’s ambitious plans to build 100,000 MW of solar capacity by 2022 are in jeopardy as the country’s financially distressed distribution companies (discoms) leave a trail of unpaid power bills.
The debt-laden discoms, which are owned by India’s state governments, are unable to pay for electricity from renewable energy projects at the tariff set out in the projects’ development contracts.
“Several domestic and overseas clean-energy companies have said they haven’t received payments for the electricity they generate for more than 10 months, racking up deficits of several hundred million dollars that may put the country’s green power ambitions at risk,” Bloomberg reported.
The unpaid power bills were disclosed after it was revealed that 1,200 MW of new solar projects awarded to companies at auction in March 2016 remained on the table because the discom in Jharkhand State is financially unable to sign power purchasing agreements (PPAs), the state’s Energy Department said.
The winners of the Jharkhand tenders last March included Adani Enterprises, SunEdison, ReNew Power Ventures and Acme Group.
India’s state discoms had combined debts of more than US$50 billion at the end of 2015, and a federal government rescue plan outlined last year has made little progress with solving the problem, India’s Economic Times said.
The discoms’ debts mean they cannot buy more electricity to satisfy expected demand, whether it is clean or fossil-fuelled, Bloomberg said.
Details of the crisis in northeast Jharkhand State were disclosed as what is claimed to be the world’s biggest single solar plant project began operations in southern Tamil Nadu State.
The US$660 million Ramanathapuram solar project is spread over 10 square km and will have a generating capacity of 648 MW, the Times said.
It was fast-tracked regarding land access approvals because the federal government is seeking to give priority to large-scale renewable projects which will have achieve the 2022 target, the Times quoted the Centre for Science and Environment in New Delhi as saying.v