The conference on Reverse Bidding organized by Renewable Markets India in Ahmedabad included a significant amount of disclosure and discussion on the status of projects in Gujarat along with the thought process behind the new tariff for the next control period.
The gist of the 1st day was a breakdown on the costs of solar projects and optimization of costs.
The 2nd day was focused on the status of current Gujarat projects and the thought behind the tariff structuring for the next control period. More below
Dr. Kirit Parikh Chairman, IRADE, made a case for the need of nuclear power to meet our energy requirements for the decade 2030. A key point of explanation was thatIndia has Uranium for only 10,000MW currently however utilization of this material would create plutonium and Uranium 232 which would be multiplied in fast breeder reactors thus meeting a possibility of 500,000 MW generation based on these in 2030. His point was that although focus should be on Solar, Wind as well as other forms of Renewable, we should also keep Nuclear power in mind, in case, the above mentioned do not take off in the future as expected.
Mr. D.J.Pandian, Secretary – Energy and Petroleum Gujarat, was quite candid in disclosing that out of the 950MW sanctioned, the government initially only expected 50% to close (going by past experience) when the projects were allocated. For the current deadline of 31st Dec, a capacity of around 300MW is expected to be commissioned while another 200MW is expected to come up by March 2012. His thoughts around CSP were that the technology would be difficult to implement on a large scale in future given the paucity of water and accurate DNI data. The same water can be more productively used in other sectors such as agriculture & industry. This is a major point where PV technology scores over CSP.
Dr. Ketan Shukla, IFS, Secretary – Gujarat Electricity Regulatory Commission, displayed the highlights for the Solar Tariff for the control period 28th Jan 2012 – 2014 and has asked for suggestions to incorporate into the new tariff rates. A new development is the expectation of the government that CSP tariffs will be higher than PV. Also, the rationale behind calculating the new tariffs to be declared was explained well with feedback taken quite graciously and requested to be given over email. A key point to note in our conversation with Dr. Ketan Shukla was that he clarified that Gujarat Government has no cap on usage of Solar Storage for CSP which would help make it a true Grid technology. Projects could be on the lines of the GemaSolar project in Spain which now generates electricity 24 hours and has CUF’s close to other conventional Thermal Technologies.
The strong policy thrust, vision, efforts put in by the Gujarat government and its officials has been one of the main reasons for investor optimism in solar projects in Gujarat.
A key point of discussion was the deadline of 31st December 2011 for Phase 1 & 2 projects and the timeline of 28th January for the new tariff for 2012-2014. Our interpretation is that projects which commission before the 28th of January would receive the initial tariff of Rs. 15 for 12 years and Rs. 5 for the remaining 13 years and post that, the new solar tariffs would apply. The penalties as per the PPA would also start being levied come January 1st 2012 upto the date of acceptable commissioning and generation. This was not confirmed explicitly, however implied.
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