Growth of Jharkhand’s Solar Sector Hobbled by State Inaction

The inaction and lackadaisical approach taken by Jharkhand’s implementing agencies casts the state in a bad light for renewable energy development


The progress of Jharkhand’s solar sector is being severely hobbled by inaction and delays on the part of the state’s implementing and nodal agencies. The issue is apparent in the state’s seeming inability to develop even a single megawatt of the 1.1 GW of grid-connected solar photovoltaic (PV) projects that it successfully auctioned in March 2016.

Although Letters of Intent (LoIs) were signed for 1.1 GW of capacity, not a single Power Purchase Agreement (PPA) had been finalized between developers and off-takers at the end of the financial year 2016-2017.

“We do not know what to do. Soon, it will be two years since the tender of the capacity and over a year and a half since we won the auction. Until now, all our hopes have been false. We cannot comprehend why the PPAs haven’t been signed even after the renegotiation,” an executive at renewable energy project developer Suzlon told Mercom.

Consequently, project delays and renegotiations are torpedoing the prospects of expanding rooftop solar capacity in Jharkhand.

After more than a year and a half of limbo, the state implementing agency said in September 2017 that of the 1.1 GW of projects with signed LOIs, it was now planning to sign PPAs for just 685 MW. The announcement came after the state distribution company (DISCOM) renegotiated project capacities and tariffs with developers.

Now, four months later, those promised PPAs are still nowhere in sight.

Expressing disappointment with the implementing agency, the Suzlon executive added, “We were hoping that we would have the PPAs in our hand by the end of 2017. But right now, we can only wait and ponder our next move. If this is the scenario, it will be difficult in the future to be active in such an area.”

Suzlon was the second-largest winning bidder at the March 2016 auction, where it was awarded a capacity of 175 MW. Following the renegotiations, it agreed to develop just 130 MW of that total.

Another executive at a solar firm that was also one of the biggest winners at the auction, said, “We have a pan India presence and have never encountered such inaction and dereliction of timelines. This will be a lesson well-learned for us.”

The inaction and lackadaisical approach taken by Jharkhand’s implementing agencies casts the state in a bad light for project developers. Executives at these companies opined that only a very few players will want to be involved in a state that does not have a fixed implementation timeline. Matters like this affect the state’s broader market outlook, one executive said.

According to Mercom’s India Solar Project Tracker, ReNew Power was the largest winner at Jharkhand’s March 2016 auction, with a winning bid to develop more than 500 MW of capacity. But later renegotiations with the state reduced that number to 392 MW.

OPG Power was awarded 124 MW, but that capacity has since been lowered to 100 MW.  Likewise, Adani will only develop 40 MW of the 50 MW it won in the auction, Madhav Infra will develop 15 MW of the 20 MW it won, and Karvy Consultants will develop 7.5 MW of its awarded 10 MW.

Meanwhile, fellow capacity winners ACME and Greenko have decided not to develop any of their awarded capacity at all, and opted instead to remove themselves from the process entirely.

Officials at the Jharkhand Renewable Energy Development Agency (JREDA) declined to comment on the development when they were contacted by Mercom.

The state’s attitude of inaction is further demonstrated by its failure to come up with a new solar policy since the year 2015.

Image credit: Wikimedia Commons

Saumy Prateek Saumy is a senior staff reporter with covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.