As buyers turn wary, Ladakh’s 7.5 GW solar power plan in jeopardy

Ziraat Times Team Report

Srinagar: The Solar Energy Corporation of India (SECI) has not been able to sign power sale agreements with any state power distribution companies (Discoms) for 6,000 MW of solar projects, out of the 13,816 MW, under-construction. These are in addition to 12,000 MW capacity to be built under the manufacturing-linked solar scheme, which also do not have any buyer at present, data compiled by the Central Electricity Authority indicates.

This situation, sources in the sector say, has also impacted the bidding process for the development of the planned 7.5 GW solar power park in Ladakh, out of which a 5000-MW unit is being planned at the Morey plains, some 215 km east of Leh, while a 2,500-MW unit is to be built at Suru in Zanskar valley of Kargil.

“When the Ladakh solar project was conceived, it was expected that SECI will enter into the Power Purchase Agreement (PPA) with the successful bidders for the purchase of solar power for a period of 35 years. But the problem is that there are not even buyers for the power being generated in the plains of the country with readily available transmission systems”, sources told Ziraat Times.

What is adding to the cost of the planned hydro power at the site is the exorbitant cost required in developing the transmission system to export power outside Ladakh.

Experts say while Ladakh’s own peak demand is about 50 MW, almost whole of the generated solar power would need to be exported to outside states.

“The Ministry of New and Renewable Energy has shown interest to partly fund the linked transmission line, the cost of which was making the project unviable. Now that since the transmission cost needs to be recovered from the production cost from the power buying entities, potential buyers are elusive”, said sources engaged with the project.

While eight major companies which have signed agreements to build solar projects in north India, including Adani Power, ReNew, SB Energy (SoftBank), Amp Green, Ayana (CDC Group), IB Vogt Singapore and Avikiran (Enel), the bidding process for Ladakh’s planned solar projects was mired in delays due to poor response.

“The bidding process is still at an early stage due to the uncertainties of funding of the transmission systems and the selling cost to Discoms”, sources say.

Meanwhile, Azure Power, in a media statement issued last week acknowledged that it was facing challenges in finding buyers for the solar projects assigned to it.

“The Solar Energy Corporation of India (SECI) has informed us that so far there has not been adequate response from the state electricity discoms for SECI to be able to sign the PSAs at this stage even though we have a letter of award,” the company said in a statement last week.