India: Jharkhand's 1.2 GW tender boosts solar but also sparks concerns

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Jharkhand, one of India’s largest coal producing states, announced last week a new tender for 1.2 GW of solar capacity under its state policy.

According to New Delhi-based consulting group Bridge to India, projects under the tender — the first of its kind by the state — are expected to be allocated under two categories: 200 MW for projects of between 1 MW and 25 MW, and 1 GW for projects ranging between 26 MW and 500 MW. The smaller projects will have a commissioning period of 13 months, while the larger ones will have 18 months.

Bridge to India points out that if all projects under this tender are successfully commissioned, Jharkhand will be able to meet more than 90% of its peak consumption and more than 20% of its overall power requirement through solar by 2019.

Jharkhand’s solar tender follows another 1.2 GW tender in the state of Karnataka last month and are among a wave of new solar allocations in the Indian market. Current pipeline of utility scale projects in India, excluding the Jharkhand tender, is currently at about 15 GW.

While Bridge to India welcomes the increase in solar tenders, it lists some looming concerns.

“Jharkhand, for example, already has more generation capacity than its power consumption. If the new solar projects are commissioned, the state will be able to meet over 90% of its peak consumption and over 20% of its overall power requirement through solar in the year 2018-19.” The consulting group adds that 40% of capacity allocated under state policies in the past two years has been significantly delayed or cancelled all together. Furthermore, such a rapid ramp may leave equipment suppliers and contractors struggling to deliver all the projects.

“There is an urgent need for the state and central governments to co-ordinate a time-table for solar tenders to ensure that pace of project development is consistent with the financial and operational capacity of the private sector,” Bridge to India argues.