India is on track to produce 700 megawatts of solar power at a cost of $2.2 billion by December, ahead of an initial target for an ambitious plan that seeks to boost green power generation from near zero to 20 gigawatts (GW) by 2022.
It is unclear how we are talking about 700MW of power that can be produced. Most industry insiders that Panchabuta has spoken to have told us that we could expect about 300MW of projects to be commissioned by March 2012 with about 150-200 MW under construction as a reasonably optimistic scenario. Even taking the 470MW of CSP under consideration, none of those projects are expected to be commissioned in less than 24 months. Panchabuta would be really happy indeed if IREDA does beleive that 700MW of production from Solar would happen within the next six months in India.
Under India’s Solar Mission , investors bid to build solar power plants and the winning bids are determined by the electricity tariff that they accept as viable. Such has been the interest that the government has been flooded with investment pledges for the first batch of projects rolling out in December.
Again, there have been numerous stories about projects finding it very tough to secure financing and if the government is indeed flooded with investment pledges they should help some of these developers achieve financial closure.
India’s 20 GW solar plan is likely to attract overall investment of about $70 billion, the government has estimates. Issued in 2009, the plan envisages India producing 1,300 megawatts (MW) by 2013, another up to 10 GW by 2017 and the rest by 2022.
“The entire solar industry is no longer worried about the upheavals that are taking place in the European markets because they find a very new and very promising market is developing in India,” said Debashish Majumdar, chairman and managing director of Indian Renewable Energy Development Agency.
IREDA, a state-run agency, is the leader in the country’s solar energy financing.
“So far, every year the general mood was that nobody knew what would happen to the German policy or what would happen to Spanish policy,” said Majumdar, who attended a global summit on clean technologies in Munich last week.
Most industry sources that we spoke to are also definitely optimistic about India and its potential but are currently evaluating what is happening on the ground with guarded optimism. This is because most of the EPC and BoS companies we talked to, have faced a lot of uncertainties in orders from developers as deadlines are being constantly extended and prices negotiated. IREDA is one of those agencies that has been constantly extending deadlines, though the tariffs are attractive and bankable for their scheme, as “developers” have been unable to secure financing.