No more extension for solar project timelines, Centre exceeds bid target for FY24: Bhalla – EQ
In Short : “The Centre exceeds bid target for FY24 and discontinues further extension for solar project timelines, signals adherence to stringent project schedules, and underscores commitment to accelerating solar energy deployment,” stated Bhalla.
In Detail : The Union secretary for the ministry of new and renewable energy announces end to extensions for solar projects except when absolutely necessary. Emphasis on stringent measures for timeline extensions, citing availability of modules and decreasing prices.
NEW DELHI : Government is looking at putting an end to the practice of giving extensions on timelines for completion of solar power projects in a bid to achieve its ambitious target of 500 GW non-fossil based power capacity by 2030.
In an interview, Bhupinder Singh Bhalla, secretary, ministry of new and renewable energy (MNRE), said that the government has bid out 51 GW of renewable energy capacity in FY24, against the target of 50 GW. Capacity addition would accelerate further from FY26, he said.
He said that the Centre would be much more stringent going ahead in terms of dealing with requests for extension of project timelines and would allow extension only if “absolutely warranted”. Although developers faced issues such as domestic supply shortage or high module prices earlier, now the prices have declined and the domestic supply chain is also growing.
The statement comes at a time the ministry has reinstated the approved list of models and manufacturers (ALMM) for solar photovoltaic modules with effect from 1 April mandating government-backed projects to source modules only from the suppliers featured in the list.
“We plan to stop giving extensions for completion of solar projects, except for cases wherein extension is absolutely warranted and the situation is out of the control of the developer. Extensions were given earlier to developers in several projects and also under CPSU scheme, one of the reasons being high prices of module and cells,” Bhalla said.
“There were issues, but going forward we will not give too many extensions. We will become very strict as now modules are available, prices also are low. Now, a lot of domestic production is starting.”
Emphasizing that the domestic capacity of solar module capacity is growing, Bhalla said that the approved capacity under ALMM is already about 37 GW and there are applications for 12 GW more. “This will take the annual manufacturing capacity to nearly 50 GW, which would be adequate as the current requirement in the country is seen at 25 GW annually. In the next two years, the requirement will go up to 50 GW,” the secretary said.
Solar projects along with a few schemes have been allowed extension of timelines to curb the impact of high customs duty and lack of modules on the capacity installation targets in the past few years. Among such extensions, MNRE had in 2022 granted extension of time to solar power projects under CPSU scheme Phase-II implemented by the Indian Renewable Energy Development Agency Ltd (Ireda) until 30 September 2024.
“Currently there is around 190 GW of installed non-fossil capacity, about 90 GW under construction and over 30 GW has been bid out, which brings the number to over 310 GW. We are going to bid out 40-50 GW every year. If the gestation period is about two to three years, and the next four-five years play out well we can achieve the 2030 target. However, many more things need to fall in place to achieve the target including evacuation infrastructure, successful closure of bids, offtake of energy and product availability,” said Anujesh Dwivedi, Partner, Deloitte India.
The focus is on fast-tracking completion of solar projects as India eyes to set up a total of 292 GW of solar capacity by the end of the decade out of the total targeted green capacity of 500 GW. As of February, India had an installed solar capacity of 75.57 GW.
During April-February 2023-24, a total of 11.47 GW of renewable energy capacity, including large hydro projects, was added, against the installation of 12.34 GW in the corresponding period of the previous fiscal.
Bhalla, however, exuded confidence that the country will achieve the target of 500 GW installed non-fossil capacity by 2030.
“We are 100% confident of achieving 500 GW non-fossil target by 2030. The bidding process has gained pace in the last fiscal which has created the required ecosystem. In FY24, we have completed about 51 GW of bids against the target of 50 GW of capacity. The acceleration in the bidding process will have effect after few years,” he said. The government has set a bidding trajectory of 50 GW renewable capacity until FY28.
