Akhilesh Magal, head adviser, solar energy, Gujarat Energy Research and Management Institute (GERMI), promoted by the state-controlled Gujarat State Petroleum Corporation (GSPC), says one reason why the solar power producers are refusing to come in is, "Gujarat does not allow third-party open-access" where an independent power producer "connects to a buyer" directly. "The state electric utility companies are wary of granting open-access permissions, as this would thwart businesses", he regrets.
An environmental engineer from Carnegie Mellon University and an expert on solar policies and grid integration of renewable energy, Magal, in his commentary in a top international renewable energy portal says, "It would be wrong to say that there isn’t enough land. The solar resource, of course, continues to be good"", he says, wondering, while most developers and investors have had a good experience in Gujarat, "why is the state holding back on further allocations?"
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| Magal |
The commentary, titled "Gujarat & The Problem Of Plenty", suggests, the reversal in solar field has happened despite the fact that "Gujarat was the first state in India to announce its solar policy in 2009" and its "policy preceded the National Solar Mission (NSM) and was the first (and since then the only) policy to be based on a fixed feed-in tariff (FiT)."
A major reason why solar power is no more being encouraged in Gujarat, suspects Magal, is "Gujarat is one of the few states in India that have a power surplus" and Gujarat’s state-owned "distribution companies (DISCOMs) literally do not need any more power, and therefore have no reason to purchase solar power."
As against this, Magal says, "In most other states with power deficits, solar power is an easy way to quickly meet the deficit. Thermal power plants take time to get commissioned, and coal linkages are a constraint in India today. In Gujarat, solar can only replace conventional generation, and not augment it. Sending power to other states is allowed, but severely limited due to transmission capacity bottlenecks."
Then, Magal says, "Although the price of solar has fallen by more than 60% since Gujarat signed its first power purchase agreements (PPAs), solar is still about 30% more expensive than long-term thermal power contracts from new coal plants." Against this backdrop, "DISCOMs are not allowed to freely pass on these costs to consumers unless they get the proposed tariff approved by the regulator, State Electricity Regulatory Commission (SERC)."
Explaining the constraint, the expert says, "This would leave the onus on the government to bridge the difference. Solar PPAs are long-term agreements (at least 25 years), which would mean that the government has a sizable outflow on its cash-flow sheet for a long time. Governments generally are wary of making such long-term commitments."
Then, Magal says, "Although the price of solar has fallen by more than 60% since Gujarat signed its first power purchase agreements (PPAs), solar is still about 30% more expensive than long-term thermal power contracts from new coal plants." Against this backdrop, "DISCOMs are not allowed to freely pass on these costs to consumers unless they get the proposed tariff approved by the regulator, State Electricity Regulatory Commission (SERC)."
Explaining the constraint, the expert says, "This would leave the onus on the government to bridge the difference. Solar PPAs are long-term agreements (at least 25 years), which would mean that the government has a sizable outflow on its cash-flow sheet for a long time. Governments generally are wary of making such long-term commitments."
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