Max 30% Of Surplus Solar Energy To Be Available At Night: Govt Of Gujarat

Many manufacturing units have installed captive solar plants to avoid hefty electricity bills. Sachin Shah, senior vice president of GFSI and MD of Star Energy said that captive power producers should not have to pay extra if their captive production is equal to their consumption, but they have to pay extra.

For example, a company produces 150 units of solar energy during day and uses only 100 units, then it can transfer the surplus 50 units to the grid, which should be able to use for free at night. However, it will get only 30 units for free and will have to pay for the rest 20 units. This they claimed contrasts a similar provision in a policy by the central government, wherein the captive power producer has to produce minimum 30 per cent surplus power and there is no cap on production. 

An official from a Gujarat government-owned energy company confirmed that companies using captive solar power plants will be compensated for only up to 30% of their daytime consumption. “A decision has been taken. Only 30% of the daytime consumption of electricity will be compensated at night. Industry will have to pay for additional power usage,” he said, requesting anonymity. 

Headwinds in Renewable Energy

Issues of land acquisition issues, limited transmission infrastructure, and certain government procurement mandates slowing the rollout of major renewable energy projects in India were also raised. “The government should streamline land acquisition and other clearances. There are certain challenges in acquiring land in the tribal areas. If these issues are sorted, more projects can come in less time,” said Sanjay Narula, an independent solar energy consultant.

Transmission Troubles Across States

Inadequate transmission infrastructure—especially in emerging states—is another major barrier. Solar power projects must be connected to either the Central Transmission Units (CTUs), managed and operated by the central government, or the State Transmission Units (STUs). 

“In Gujarat, the infrastructure is robust, but this is not the case in many states. This needs to be improved. If we are producing solar energy but not able to link it with a grid, then it is of no use,” Narula added.

Make In India vs Chinese imports:

Another major issue impacting project rollout is the government’s mandate to use domestically manufactured solar modules under the Domestic Content Requirement (DCR). These indigenous modules’ cost is around Rs 29 per Watt. On the other hand, Approved List of Module Manufacturers (ALMM) modules, which use imported cells but use locally produced panels cost about Rs 16 per Watt. Chinese imports are even cheaper costing about Rs 13 per Watt. 

“Using DCR volumes is financially not viable. The insistence on DCR will drastically slow down the new projects initiated by the government,” said Shah. Also highlighting a mismatch between supply and demand, he said, “The projects are delayed in meeting the government mandate of using indigenous modules. But these are in short supply. Why should the industry be penalised for the delay?” 

India’s 500 GW Target by 2030:

India aims to install 500GW of non-fossil fuel power capacity by 2030, as pledged at the 26thConference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) COP26. With current renewable energy capacity at about 100 GW, the government plans to invite bids for 50 GW of renewable energy capacity annually from Financial Year 2023-24 to 2027-28. The plan was finalised by the Ministry of New & Renewable Energy (MNRE). However, industry experts warn that without resolving land, transmission, and supply chain issues, meeting this target will be challenging.

Renewables Rise, Hurdles Persist:

Despite the roadblocks, many in the sector agree that solar and wind power are becoming more competitive with fossil fuel. “Only limitation is that solar energy can only be produced during day time, while thermal power plants can produce electricity round the clock,” explained Rajkumar Khemka, MD of Gujarat Wind Farms Ltd.

An official from a state-run energy company added that of late many faceless, online and transparent mechanisms have helped expedit clearances. He further said that under the Decentralised Renewable Energy Program (DREP), record number of Power Purchase Agreements (PPAs) have been completed given the new practices. Earlier, developers had to go through lengthy tenders and frequent visits to the government offices.

Collaboration Over Competition:

GFSI President Kishorsinh Zala told The Secretariat that the event created strong business opportunities for participants. “We believe in collaboration and not competition. Small players became aware of many government schemes and provisions which they might not have known. We also discussed pollution control requirements for manufacturers. This event has played a key role in aligning business practices in according to the policies and regulations of the government,” said Zala.