Delays in renewable projects? India to blacklist companies

Solar

India is going to blacklist companies that delay the completion of renewable projects in the country, an order issued by the ministry of new and renewable energy (MNRE) stated.

“The undersigned is directed to convey that if any renewable energy project is not completed by the prescribed date of completion, then its Bank Guarantee should be encashed and the developer blacklisted after asking him/her to show cause. The blacklisting will be for a period of three to five years,” read order issued by the MNRE on February 15.

This is the first time that the government has decided to take action against renewable energy developers for delays in project completion. The move comes at a time when several solar power projects have either been halted or delayed due to disruptions in equipment such as modules, cells, wafers and so on.

The problem aggravated after The government imposed a 25 percent basic customs duty (BCD) on imported solar cells and 40 percent on imported modules from April 2022 to support domestic manufacturing. Nearly 85 percent of Indian solar capacity is built on imported cells and modules, mostly from China.

Senior power officials told Moneycontrol that the government is going to come up with its decision on the second tranche of production-linked incentive (PLI) scheme for high-efficiency solar modules by April. All prospective manufacturers have been asked to submit their proposals by end of this month (February). The first tranche of PLI of Rs 4,500 crore was allocated in December 2021 and the second tranche is worth a total of Rs 19,500 crore.

Even as the government is yet to roll out the second tranche of the PLI scheme, some companies have already started solar module manufacturing on a large scale. Praveer Sinha, Chief Executive Officer and Managing Director, Tata Power, told Moneycontrol that the company is in the process of setting up a 4-GW solar cell and a 4-GW solar module manufacturing facility in the country.

“We expect the modules to start coming out from the plant by August-September this year, and the solar cells by December 2023. So, both the cell line and the module line implementation are in full swing, the construction activity is going on at the site, and all equipment has been ordered,” he said.

Sinha further said there will be at least a 20 percent cost difference between what will be produced in the country and what is imported with the BCD. "It, of course, depends on the manufacturer and the companies that are setting up the technology and the plant. But roughly, I would say about 15-20 percent difference," he said.

India needs to add over 40 gigawatts capacity annually to achieve its commitment to 500 gigawatts of renewable energy generation capacity by 2030. The country's renewable energy installed base is nearly 175 gigawatts.