Solar auction winners worry about rising ‘paperwork’ as input prices rise
More than a year after the state-owned 184 megawatt (MW) solar power auction, Uttar Pradesh is still refusing winners to start building the parks. This has raised concerns among companies, who fear their calculations could go wrong as input prices surged last year.
The cost of solar equipment has increased with rising commodity prices around the world and the tariff of Rs 3.17 per unit quoted at the February 2020 auction may no longer be viable for the industry , according to industry executives. Further delays could even lead companies, often backed by foreign investors, to rethink their proposals for investing in the state, they warn.
According to the tender document, the state government’s Letters of Intent (LoI) were to be published within three months of the auction ending.
The reverse auction winners for said capacity were Vijay Printing Press, NV Vogt Singapore, a consortium of Saudi Arabia-based Al Jomaih, and India’s Jakson Power, SolarArise, jointly backed by funds managed by Kotak Mahindra, the European Investment Bank and the United Kingdom. based on ThomasLloyd Group.
“With the late issuance of the letter of intent and the lack (of) ease of doing business in Uttar Pradesh, private actors who previously had large investment projects in the state are refraining from bidding (for) projects, given the challenges facing legal permits (and they are already planning to move to other states, “India’s National Solar Federation (NSEFI) said on Monday. in a letter written to Chief Minister Yogi Adityanath.
“This delay is also closely linked to the risk of growing regulatory uncertainty, which is causing some of our members to withdraw their investments from the state of Uttar Pradesh,” added the letter from NSEFI, reviewed by FE.
Of the 39,084 MW of solar capacity installed in the country, Uttar Pradesh is home to 1,668 MW. Industry experts also attributed administrative and regulatory hurdles to solar tariffs being higher in the state than in other parts of the country.
UP government officials were not immediately available for comment.
India has set a target of increasing the capacity of installed renewable power plants to 450 GW by 2030. However, if the target is to be met, the number of call cancellations is increasing. ‘offers must be reduced. Of the 143 GW of calls for tenders launched for the construction of solar capacities, since FY17, around 78 GW have been canceled. The current installed renewable power generation capacity is 94 GW and around 34 GW are being implemented at various stages while 30 GW are being tendered.