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Solar energy projects fail to light up as crunch hits Tamil Nadu

According to reports, It has been a year since the Tamil Nadu Solar Energy Policy was announced, but no power projects have come up under this yet; only the power cuts are back.

With the state in a severe power crunch, the government in October 2013 planned to add 3,000 megawatt (MW) of solar power by 2015, — 1,000 every year from 2013, but there has been little progress. If things had gone on track, the power situation in the state could have been eased, though not solved. But the state is now staring at several hours of power cut again and the situation wouldn’t get better by summer 2014.

 Government officials say legal issues have delayed solar power projects. “The 1,000 MW tender is delayed because of legal cases, but we are confident of getting it cleared,” said Sudeep Jain, chairman and MD of the Tamil Nadu Energy Development Agency ( TEDA).

“Some companies have gone to court against the solar purchase obligation (a part of the TN solar policy which mandates that certain classes of customers buy 6% of their electricity requirement from solar),” said S Nagalsamy, member of Tamil Nadu Electricity Regulatory Commission.

This apart, several projects that were to come up have been stalled. About 50 companies had agreed to be part of over 700 MW of projects with the state electricity utility Tangedco, but there has been a delay in signing power purchase agreements. “Everything including land documents, bank guarantees are in place but we are waiting for Tangedco to sign agreements. Every time we speak to them, they say it will be completed in 15 days but there is no progress,” said M Umapathi, chairman & managing director, Voltech Group which is planning a 10 MW plant near Tuticorin. Most other companies echo his view.

Despite the hurdles, investors are making plans for solar projects in the state, indicating the interest amongst companies. But since Tangedco has not been able to capitalise on this interest, what could have been a flood of power projects is merely a trickle now. Companies are taking to solar to meet their captive needs. For instance, a consortium of auto component makers is setting up a 50 MW plant (part of which is already commissioned) for captive use, and a group of textile companies are working on a 10 MW park in Karur, yet another textile group is planning a 20 MW plant in Tirupur, and auto company Daimler has a 300 kilowatt system, with plans for 4 MW in its facility near Chennai.

Industry analysts say that while interest remains, solar projects should be completed fast, before companies will lose interest and move to other states or register under the National Solar Mission, which would divert power to the central grid.

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