Cash-Strapped Indian State Stalls on Nation’s Biggest Solar Facility
Mounting delays in completing a 1.2-gigwatt solar project in India’s northeastern state of Jharkhand point to a weak link in India’s plans to decarbonize its energy supply, analysts say.
Contracts for the project, the country’s largest injection of new solar power to date, were to be signed in May, 2016, Bloomberg reports. But Jharkhand’s plans have broken down, since state power retailer Jharkhand Bijli Vitran Nigam Ltd. has no money. “We have asked for financial assistance of a few hundred crore (a few billion) rupees from the state’s finance department and are awaiting their response,” said R.K. Srivastava, chief secretary of the state energy department.
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Most of India’s other state-owned “discoms”—or electricity distributors—are also losing money, the news agency notes, as part of a public policy to subsidize electricity for the country’s poor. Combined losses that surpassed US$57 billion in March 2015, according to KPMG, “mean discoms can’t buy more electricity to satisfy expected demand, whether clean or conventional, nor can they add more customers. That ultimately leaves latent power demand unmet.”
Meanwhile, foreign partners in Prime Minister Narendra Modi’s ambitious plan to reduce reliance on coal and more than double installed renewable power are being left dangling—or worse. Goldman Sachs Group unit ReNew Power Ventures, Abu Dhabi Investment Group, OPG Power Ventures Plc, and SunEdison Inc. are among the investors still waiting to conclude purchase agreements that would allow them to start construction in Jharkhand.
At the same time, “several domestic and overseas clean energy companies have said they haven’t received payments for the electricity they generate for more than 10 months,” Bloomberg reports, “racking up deficits of several hundred million dollars.”