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Power Sector: Perilous side of declining solar power tariffs

By IndianMandarins- 11 May 2017
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power-sector-perilous-side-of-declining-solar-power-tariffs Even as solar power tariffs keep sliding and dropped to a record low of Rs. 2.62 per unit in the auction just conducted for Bhadla Solar Park - lower than NTPC's average coal-based power tariff of Rs. 3.20 per unit, clear policies are lacking that make India scandalously dependent on solar cell imports from China and in medium term may cause serious NPA problems for the banking sector. "Bhadla Ph-IV Solar Park results in a historic lowering of tariffs. Phelan Energy (50 MW) and Avaada Power (100 MW) have bagged projects at Rs. 2.62/unit. Softbank Cleantech has won 100 MW capacity at Rs. 2.63/unit," a senior official said. After the auction, Power Minster Piyush Goyal tweeted "Another milestone towards Prime Minister Narendra Modi's vision of clean affordable power for all: Bhadla Solar Park achieves a tariff of Rs. 2.62/unit.'' Goyal conveniently ignored the make in India concept in his tweet because Indian entrepreneurship is nowhere visible in making solar cells and modules. Of course, he's not responsible for promoting entrepreneurship in the manufacturing of solar cells. It's the responsibility of the department of industrial promotion. Let's see what it does in the light of the PM's official statement, issued on May 9, emphasizing that the manufacturing of solar equipment be given priority. The PM's observation may or may not have stemmed from his realization that the country's solar program is widely exposed to the manipulation of  China-centric import lobby. In 2015-16, the country imported $2.34 billion worth of cells out of which 83.61% were from China. China uses predatory pricing and dumps cheap thin film solar cells to capture the Indian market in the absence of any anti-dumping duty imposed by India. Despite all the make-in-India noises blared out from all official seminars and meetings, yet the country is nowhere on the global manufacturing index for solar components and systems. It also does not have any infrastructure for raw material production. The increased reliance on thin film technologies has augmented the dependence on specific elements like "rare earth" metals in which China has a near-monopoly. In the given circumstances, Indian solar project developers may find their projects turning unviable in the event of currency fluctuations or changes in China's policy on solar cell and module exports. Project developers may be well advised to keep in mind the effects of declining output. In a recent study, Mike Bergin of Duke University along with others has found that dust and particulate matter might reduce the energy yield of solar power systems in north India by 17-25%. May it be noted that the government has targeted an indigenous manufacturing capacity of 4-5 GW by 2020 under the National Solar Mission. Till the end of December 2016, the country's installed solar cell manufacturing capacity stood at 2,953 MW. Comparably, the government has targeted reaching an installed solar power manufacturing ability of 100 GW. In a written statement to Lok Sabha on December 8, 2016, Goyal had said "The government is supporting domestic solar PV manufacturing by various means and incentives. However, there is no exclusive national policy to develop indigenous solar power manufacturing in the country," Goyal said. Clearly, the government is not focused on making the country a solar power. So why do you worship and pray "Om Suraya Namah" every morning? Forget it, man! (By M K Shukla & Rakesh Ranjan)

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