India’s finance minister, Shri Chidambaram, announced 2GW worth of new large-scale solar projects as part of his interim budget speech earlier this week.
The finance minister said following the success of India’s JNNSM national solar mission, the government wanted to see four “ultra mega solar power projects” each with a capacity of over 500 MW in 2014-15.
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According to local press reports, the projects will be in Rajasthan, Gujarat, Jammu and Kashmir and form part of the JNNSM.
Plans are already underway in India for a multi-stage 4GW ultra mega solar power project in Rajasthan. Six companies involved in the project signed a memorandum of understanding on the project last week.
However, there are concerns the latest round of “ultra mega” projects may be difficult to finance under the JNNSM’s payment mechanism.
The Indian government is already considering project bids for 750MW of PV available under the first batch of the second round of the JNNSM, which will be supported through a ‘viability gap funding’ mechanism .
Renewable energy consultant Ritesh Pothan questioned whether this mechanism would enable the 2GW of projects proposed by the minister to go ahead promptly, as there are concerns over the likely speed of payouts under the viability gap funding process.
“The real question is will the [Indian developer and manufacturing] companies be able to raise finance at these low [government] rates?”
Pothan also questioned whether it would be possible to get such large projects signed off ahead of May’s elections, when the current government is widely predicted to be kicked out.
“Putting this together at such short notice will be difficult,” Pothan said.
The JNNSM target of achieving 1,684MW of grid connected solar power has been exceeded, and the JNNSM entered its second phase on 4 January 2013.
