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What we need from the Government is policy stability and more granularity on the long-term plan of 100 GW to enable us to plan our resources better.

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In Conversation with Mr. Rajya Wardhan Ghei, Chief Executive Officer, India, Hindustan Cleanenergy Limited
As a developer, what key challenges do you face today? 
 
India in the current stage has already achieved 14, 000 MW solar capacity against the target of 1 GW by 2022 under the ongoing National Solar Mission (JNNSM) showcasing  great start, but there are a few challenges listed below that are being faced that could lead to slow down in capacity addition:
 
  1. Low electricity demand: The electricity energy deficit in the country is down to 0.7% in FY 17 leaving most Discoms either power surplus or sufficient. The thermal capacity on the other hand is also operating at a low of around 60% PLF which means that around 25 GW of thermal capacity is without long term PPA. Due to such demand-supply scenario, the Discom’s solar power offtake appetite which in turn reduces the number of upcoming bids is reduced. 
  2. Uncertain Environment –
  • Uncertainty around issues related to GST implementation
  • Imposition of anti-dumping and cancellation/renegotiation of PPAs/LOIs 
Which states do you believe lead see maximum solar energy investments this year?
 
In line with the 8% solar RPO target set for March 2022 in India, MNRE has allocated individual targets for states. While the current surge in solar capacity has been led by the southern states of Andhra Pradesh, Telangana, Karnataka etc. we now expect the states with the largest solar targets – Maharashtra and Uttar Pradesh to join the party. States like Gujarat, Bihar, Jharkhand, Punjab, Haryana due to low targeted capacity addition and are expected to announce bids.
 
As the assets become older, will aggressive bidding today become a pain point for the industry a few years down the line?
 
Intense competition in the industry is leading to aggressive bidding by the developers which require a fine balance must be stuck between value engineering and quality. Risk mitigated approach is required over next few years to ensure sustainable growth of the solar industry. The current bids will not be a pain till the time discoms honour the PPA’s and continue to discuss its committed offtake of power. The challenging situation arise either due to delay in payments or reducing offtake of power or wanting to negotiate the PPAs.
 
Anything else you would like to add for our readers.
 
We believe that the solar sector is going to be the mainstay of India’s energy requirements in the future. While we may be facing turbulence in the sector in the short term, the future is bright for the players who are able to see off this turbulence. What we need from the Government is policy stability and more granularity on the long-term plan of 100 GW to enable us to plan our resources better. 
 

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