State-run lignite mining and power generating company NLC India Ltd has abandoned plans to set up solar projects in Rajasthan as the state’s power distribution companies have refused to buy solar power at the rate it had estimated. NLC, earlier called Neyveli Lignite CorporationBSE 0.41 %, had in January invited global tenders to set up four blocks of solar projects of 65 MW each through the engineering, procurement and construction (EPC) route. Two of these projects were planned at NeyveliBSE 0.41 % in Tamil Nadu and the other two at Barsingsar in Rajasthan. The projects were to be commissioned by the end of the current financial year. In both cases, bids were received and contracts awarded. The Neyveli projects were won by BHELBSE -0.04 % and Jakson Group. Letters of award have been issued and a power purchase agreement with the Tamil Nadu Generation and Distribution Co (TANGED) has been signed.
But NLC abandoned the Rajasthan plan as the state government-owned Rajasthan Rajya Vidyut Prasaran Nigam and other discoms have shown little interest. LC did not respond to requests seeking a comment for this story. But B K Dosi, managing director at Rajasthan Renewable Energy Corporation, the nodal agency for renewable projects in the state, defended the state discoms decision. “If a company seeks a solar tariff higher than Rs 4 per kwH, it will not be possible for Rajasthan to agree to it. That is the rate at which we are buying solar power under the National Solar Mission,” Dosi told ET. Rajasthan has the best solar radiation in the country and the highest installed solar capacity at 1,294.6 MW. But lately, it has shown signs of a flagging of interest in solar power. In March, solar developers had complained to Chief Minister Vasundhara Raje and state Energy Minister Pushpinder Singh Ranawat that state discoms were refusing to guarantee grid connectivity in advance for their projects.
Tamil Nadu, on the other hand, is rapidly increasing its solar capacity. The state is now a close second behind Rajasthan with an installed solar capacity of 1,267.4 MW. ET VIEW: For Viable Renewable Power The success of India’s renewable energy capacity addition programme rests on the ability to ensure that discoms buy solar ability to ensure that discoms buy solar and wind power. This will require discoms to firmly adhere to the renewable power obligations set by the regulator. It will also require discoms to be financially viable to buy renewable power, even though it may be marginally more expensive than power generated from conventional sources. These producers also need compete with each other and conventional sources to ensure higher uptake of renewable power.