Solar trick

A number of solar mission projects operational only on paper

 
By Ankur Paliwal, Jonas Hamberg
Last Updated: Saturday 04 July 2015

image

THE government has decided to act tough with 14 companies which did not commission their solar power projects in time. NTPC Vidyut Vyapar Nigam Limited (NVVN), the power trading arm of the state-owned National Thermal Power Corporation, penalised them by encashing a part of their bank guarantees. These erring firms are among the 28 that were awarded solar photovoltaic projects under batch one of first phase of Jawaharlal Nehru National Solar Mission (JNNSM). The date of commissioning of these plants was January 9.

Amrit Energy and Greentech Power are among the companies whose guarantees were encashed on February 16 to recover a total of Rs 30 crore (see table). But some project developers have managed to escape penalty by obtaining commissioning certificates from states without completing projects.

image

Lanco Infratech happens to be the engineering, procurement and construction (EPC) contractor for three of the companies that have been penalised—DDE Renewable Energy, Electromech Maritech and Finehope Allied Energy. A recent investigation by Delhi NGO Centre for Science and Environment had shown that Lanco Infratech is in possession of seven projects, including the above three (see ‘Solar scam’, Down To Earth, February 1-15). All these projects are located in Askandra village in Nachna Teshil of Jaisalmer, Rajasthan.

In keeping with JNSSM guidelines, the companies were asked to submit bank guarantees of Rs 9 to Rs 12 crore at the time of signing power purchase agreements on January 9, 2011. It was agreed that if a project developer misses deadline, NVVN would start encashing the bank guarantee in parts over three months, after which the project would be fined Rs 5 lakh per day for another three months. If still incomplete, the project would stand cancelled.

Incomplete but commissioned

In the present case, NVVN encashed bank guarantees because the 14 companies did not commission the projects in the given time. But many more may have escaped NVVN’s notice.

Take the case of seven solar photovoltaic projects of 5MW each in Askandra village; Lanco is the EPC contractor for all of them. NVVN encashed the bank guarantee of three of them because they were commissioned a day after the deadline of January 9. The remaining four were commissioned between January 7 and 9, according to Rajasthan Renewable Energy Corporation (RREC). The Rajasthan Discoms Power Procurement Centre (RDPPC), the nodal agency for the state discoms, issues a commissioning certificate to a 5 MW plant “only when it is operational to feed the full 5 MW into the grid”, says its chief engineer N M Chauhan. Going by RREC and RDPPC claims, all the seven solar projects in Askandra have been commissioned to produce a total of 35 MW.

But a closer look reveals a different picture. When Down To Earth (DTE) visited Askandra on February 12, a month after the commissioning deadline, it found that less than half the works seemed complete. It was past the second penalty period, meaning NVVN should have encashed the next part of the bank guarantees. These seven project sites are located cheek by jowl in an area of 49.5 hectares. There were no sign boards to distinguish one site from the other. Solar panels were fully installed and connected only at two sites. In the remaining five sites, they were either being connected to inverters or the inverters were being connected to transformers. Two sites had only metal poles sticking out of the ground. A site engineer said, “a lot of work remains. We are only feeding 10-20 per cent of the commissioned capacity of 35 MW.”

Even the grid sub-station to which these seven projects are supposed to be connected is not complete. “Fifty per cent of the work remains,” said Dheeraj Singh, engineer at the sub-station.

Vijendra Panchal, Lanco’s site head at Askandra, said all the seven plants are operational and are feeding the 33 kv grid sub-station at Ajasar village, 8km away. A visit to Ajasar belied this claim. “No, they are not feeding our grid,” said B R Vishnoi, assistant engineer of the Ajasar grid sub-station. DTE found that Lanco is feeding the sub-station at Chandsar village, 3 km from Ajasar. The meter reading taken from the 33 kv Chandsar grid sub-station confirmed how little power these seven sites are generating. “Lanco’s seven plants in Askandra have fed only 65,385 kwh power in a month,” said Vishnoi who also looks after Chandsar sub-station. This is only 1.3 per cent of the promised output, and just enough for 210 households. If the plants were functioning at full capacity they can meet the needs of 15,800 households. What’s more, Lanco has taken 4,042 kwh from the grid station to power its site at night.

Then how is it that these seven plants obtained commissioning certificates? “Do not ask about commissioning. It is complicated. Besides, it is the job of RDPPC,” said Anil Patni, project manager with RREC. “Once the plant is commissioned, we do not bother to check if they are regularly feeding the grid. It is the company which will lose money because electricity will not be purchased from them,” said Patni. This attitude defeats the purpose of the ambitious solar mission. JNSSM aims to generate 20,000 MW by 2020.

There are around 20 projects under batch one of JNNSM in Rajasthan; 17 were commissioned by February 10. A visit to four more 5 MW commissioned solar plants in Phalodi tehsil in Jodhpur in Rajasthan and their readings noted from the Bap village grid sub-station showed they are transmitting sufficient power into the grid. For example, Mahindra Solar and Punj Lloyd were transmitting up to 30,000 and 23,000 kwh respectively a day.

So, while NVVN may have encashed bank guarantees of three of the seven projects in Askandra, the remaining four seem to have escaped because on paper they were commissioned before the deadline. “We encashed bank guarantees from the 14 firms because they were either not commissioned or were commissioned after the deadline. And for this data we depend on the state governments. We do not have mandate to go and check the sites,” says A K Maggu, general manager with NVVN. But it clearly is a matter of investigation, he adds.

Ambiguity in interpretation

According to Tarun Kapoor, joint secretary with the Ministry of New and Renewable Energy (MNRE), such things happen because the word commissioning seems to be interpreted differently by the Centre and states. According to NVVN, a project is considered commissioned when the full 5MW capacity is installed and is feeding the grid.

“The Rajasthan government has now written to us that many of their plants are partly commissioned,” says Kapoor. “For MNRE, these projects are not commissioned,” he adds. We are investigating the matter and if found guilty, bank guarantees will be encashed from them, he adds. “We will soon release a clarification defining the word commissioning,” adds Kapoor.

Subscribe to Weekly Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.

  • Thanks for throwing light on

    Thanks for throwing light on such issues. We are wasting time, ruining the environment and bleeding tax payers money !! Solar Mission should be by the people, for the people with empowering the real needy to use solar for his own consumption. Treating solar as central power generation plant, like thermal plant, is a big mistake. As during power distribution there are T&D losses and this costly power will become further costly. Instead promoting roof top and training the common man could be better options.

    regards,

    Posted by: Anonymous | 8 years ago | Reply
  •  Thank you for the comment

     Thank you for the comment Atul. The problem in my personal view is transparency. The government agencies do not have the manpower to make sure the plants are being commissinoned but if they were more open with their data they could get help from the public.


    Roof-top solar would be great but again the problem is how to control that it is not misused (if net-metering is involved users could theoretically feed in diesel power into the grid and get paid solar tariffs) or re-sold. 


    Transmission and distribution (T&D) Losses in India is a huge problem (25-30%) - if it could come down to that of China it would mean much of the coal power coming up now would not have to be commissioned.

    Posted by: Jonas Hamberg | 3 years ago | Reply
  • I complettely agree with you

    I complettely agree with you Jonas, non transparent practices like these will give the nascent solar industry & the Solar mission a bad name...winning at nay cost seems to be motto by some politically connected corporates, fully exploiting the system loop holes under teh gusie of business/financial innovation!

    Organizations with dubious track records, and a history of violating norms should be made public and barred from business as deterrent for others...similar to a recent example set by the MP Govt per the news report from Indian express(you might want to investigate on this as well).


    http://www.indianexpress.com/news/mp-debars-lanco-for-5-years-for-reneging-on-pact/919312/0

    Posted by: Anonymous | 8 years ago | Reply
  • How was similar work done in

    How was similar work done in Gujarat under Dr Rao of the Gujarat Renewable energy development agency? Has Down to earth written any article on it? I believe Gujarat now has the best implementation record of both wind generation and solar photovoltaic energy generation in the public sector?

    Posted by: Anonymous | 7 years ago | Reply
  • Thanks Ankur Paliwal and

    Thanks Ankur Paliwal and Jonas Hamberg for a great article.

    IÔÇÖm an Australian, writing from Australia, who was fortunate enough to have visited India many yrs ago. As such I can only say it would be good to see these crooks bought to justice.

    ÔÇ£Transmission and distribution (T&D) Losses in India is a huge problem (25-30%) - if it could come down to that of China it would mean much of the coal power coming up now would not have to be commissioned.ÔÇØ

    Please consider:

    Desertec
    From Wikipedia, the free encyclopedia

    ÔÇ£DESERTEC is a mega renewable energy project which aims to setup a massive network of solar and wind farms stretching across the Middle East and North Africa (MENA) region, and connect to Europe via a Euro-Mediterranean electricity network primarily made up of high-voltage direct current (HVDC) transmission cables. The project, estimated at Ôé¼400bn (US$526bn), will provide 15% of Europe's electricity by 2050.[1]ÔǪÔÇØ

    The studies concluded that the high solar radiation in the deserts of the Middle East and North Africa outweighs the 1015% transmission losses between the desert regions and Europe. This means that solar thermal power plants in the desert regions are more economical than the same kinds of plants in southern Europe. The German Aerospace Center has calculated that if solar thermal power plants were to be constructed in large numbers in the coming years, the estimated cost of electricity would come down from 0.090.22 euro/kWh to about 0.040.05 euro/kWh[9][16].

    Source: http://en.wikipedia.org/wiki/Desertec

    IÔÇÖve actually read of transmission losses as low as 5% over 1,000km with modern high-voltage direct current (HVDC) transmission cables but donÔÇÖt have a link so I canÔÇÖt confirm that.

    Ankur Paliwal and Jonas Hamberg could you consider an article to update us on DESERTEC. Could a similar project be set up for India enabling exports of electricity to surrounding countries?

    Just a thought.

    Posted by: Anonymous | 7 years ago | Reply