With a record amount of solar power capacity being added to the grid in India, the threat of curtailment is looming large on the project developers. The government has now taken first steps to address this problem.
The Ministry of New & Renewable Energy has issued an advisory asking central as well as state regulatory bodies to ensure that solar power project developers do not suffer due to absence of transmission capacity.
The Ministry stated that several solar power project developers have approached it complaining that some state utilities have asked them to reduce power generation. The utilities claim that there is lack of adequate transmission capacity in the grid.
The Ministry advisory states that solar power projects have a ‘must run’ status and if there is lack of transmission capacity the thermal power projects should be asked to reduce generation which will, in turn, lead to low consumption of coal. The Ministry has asked the regulators to ensure that solar power project developers are paid even if they are advised to reduce power generation.
Unlike thermal power plants in India, solar power projects are able to earn revenue only through power generation. Thus, an ideal solar power plant will not be able to generate any revenue, or profits, for the developers.
The issue of curtailment is more prevalent in the southern states which have seen a large number of tenders being issued and aggressively subscribed by project developers. The state of Tamil Nadu is expected to see sharp rise in installed solar power capacity. States of Telangana and Andhra Pradesh are also likely to see sharp increase in solar power capacity.
Recently, Tamil Nadu witnessed the installation of the largest solar power project in India. The state government had also urged the central government to increase the grid transmission capacity in order to allow it to supply surplus wind power to other states.