1. Whose intersts were being served?

At the heart of the Adani bribery case is the stellar role played by the Ministry of Power Government of India and the Central PSE Solar Energy Corporation of India (SECI). It is noteworthy that despite all the attention drawn to the issue by the US based Adani Bribery case, there is no mention of these two organizations as well as the concerned regulatory authorities.

Notwithstanding the fact that the Electricity Act, 2003 did not empower MOP to issue directives under Section 11 directly to State generating companies to buy solar power at any cost, it invoked such authority regularly, year after year, to set this ignominious process in motion. 

Evidently, there has been either lack of application of mind or deliberate acquiescence on the part of the Ministries of Power and New & Renewable Energy to anticipate and manage the problems emerging from the huge quantities of e-waste generated from solar panels and toxic residuals from lithium batteries when substantial additions are made to solar generation capacity. When RPO reaches 45% by 2029-30, as stipulated by MOP, in its usual cavalier and irresponsible manner, it has not cared to anticipate the magnitude of e-wastes/ lithium wastes that will get generated nor has it cared to put in place the necessary recycling facilities. MOP has been far too anxious to promote the interests of private solar power plants to apply its mind to such “mundane” matters.

Adani Solar’s plant in Khavda in Gujarat- How imprudent it is to prefer centralised solar to decentralised systems:

Adani Group’s solar plant at Khavda in Gujarat consits of 2.4 solar modules covering a staggering extent of 538 sq kms of “barren” land (thereare patches of forest diverted imprudently to accommodate the Adani group) larger than the city of Paris, to supply electricity to 16.1 million households across the country to far off destinations such as Andhra Pradesh. To set up such solar manufactiring facilities, MNRE gave the Adani Group a PLI subsidy of Rs 663 Crores at thecost of the tax-payer. 

The transmission of such a large volume of electricity involved heavy investments in transmission lines and technical losses in electricity transmission ranging over 16-17%. In other words, by the time the electricity reaches the consumer end, it is highly expensive. 

The Adani solar plant at khandva will operate at hardly 15% PLF, as its generation isintermittent. Only 12.5% of the electricity so generated will reach the consumers, after accounting fo T&D losses. In otherwords, the consumers will bear 100% capital cost, though they receive only 1/8th of the electricity potential of the plant. That is for the next 25 years, as the plant required a long-term PPA from DISCOMs.

There are no economies of scale in such a large solar plant as the solar conversion efficiency of the plant as it is today would be overtaken by improved technologies constantly evolving.

In contrast, if the same number of solar modules are installed at the consumer’s premises, it involves no transmission over such long distances involving heavy investments, no appropriation of such a vast extent of land and, in addition, it gives additional income to each and every consumer from sale of surplus electricity to the grid.

This shows how imprudent and anti-consumer the solar electricity policies of the Central and State governments are. The only rationale underlying such an absurd policy seems to be to grant an undue largesse to the Adani Group at the cost of millions of consumers and also at the cost of the tax-payer.

AGEL, with the support of its strategic ecosystem of vendors, is developing the world’s largest renewable energy project on barren land at Khavda in Kutch, Gujarat. Built across 538 sq km, it is five times the size of Paris and almost as large as Mumbai city. Once complete, it will be the planet’s largest power plant regardless of the energy source.

 This involved installing approximately 2.4 million solar modules.  

2. Solar energy and China’s dominance

India’s solar sector imports reached $7 billion in FY 2024, of which $3.89 billion came from China alone. This heavy import dependence not only inflates costs but also exposes India to supply chain disruptions, price fluctuations, and geopolitical risks. Indiscriminate additions to solar generation capacity will steeply increase India’s exposure to China, including Chinese personnel’s presence in India with associated risks, at a time we are facing tension at the border.  The dependence is not limited to import of equipment but also for erection and commissioning. For example, in February, 2024, Adani Solar applied for visas for 15 Chinese nationals to work at its solar manufacturing facility. And in March, it requested visas for an additional 13 Chinese nationals. These engineers are currently employed by Chinese companies that are part of Adani Solar’s solar supply chain. Unless we minimise dependence on China, we feel that any largescale expansion of solar energy generation will have serious national security implications. 

3. Role of CERC/State ERCs

Considering that the whole supply chain involves both inter-State and intra-State sale of electricity, the CERC and the State SERCs, set up ostensibly to safeguard the consumers’  interests, should cave in and approve the sale of such expensive electricity. Had they exercised their legitimate authority without hesitation, they would have put a stop to defrauding consumers.

It is ironic that the Ministries of Finance, Power and New & Renewable Energy should collectively be responsible for channelling, through Production Linked Incentive (PLI)/Viability Gap Funding (VGF) subsidies, amounting to  Rs. 26,000 Crores of tax-payer’s money into the pockets of profit earning private promoters of solar power plants only to enable the latter to add to their profits by selling expensive electricity to consumers, in some cases by bribing some State political leaders. It is a case of public money being deliberately misappropriated for a dubious purpose.

4. Role of SEBI and Central investigating agencies

In one isolated case that involved two domestic solar plant promoters raising funds from US investors, a painstaking investigation by FBI at the instance of SEC to protect the interests of US investors resulted in a comprehensive indictment that uncovered bribery in India. Had SEBI, CBI, ED, CBDT and DRI carried out similar investigations to safeguard the interests of our own investors and tax-payers, many more instances of malfeasance would have seen the light of the day. It is a case of total failure of governance in the country. It is a case of largescale defrauding of electricity consumers and taxpayers. 

The way the Ministry of Finance and others, instead of ordering investigation into ccusationsagainst SEBI, especially its alleged linkswith theAdani Group, continuedto remain in a mode ofdenial, does not inspire public confidence in its impartaility and no purpose will be served by expecting that Ministry or any other wing of the NDA government to have the will or inclination to getat the factual position underlying the Adani matter.

5. We demand a comprehensive commission of enquiry

In view of these concerns, we demand a comprehensive commission of enquiry be set up regarding the large scale solar power plants that would, interalia, enquire into the following:

1. Large scale imports for establishing large solar power plants involving allegations of overinvoicing.
2. The PPAs signed before commissioning the plants and the difference between the purchase price specified under the PPA and the spot purchase price at which power is available at the concerned load dispatch centre at the specified time of purchase and consequences thereof, in view of the must run status.
3. Cost incurred by the State DISCOMS and TRANSCOs for ensuring grid stability.
4. Efficacy of centralised solar generation capacity. Relative advantage and possible need promoting decentralised solar systems.
5. Place a moratorium on further additions to centralised solar generation capacity and, instead shift focus to promoting decentralised solar systems
6. Role of the

• Ministry of Power in formulating policy for the Central Government and issuing mandatory directives to the State Government and its functionary organizations.
• Solar Energy Corporation of India in its role as a broker for making DISCOMS purchase energy from private promoters of centralised solar plants at rates that offer unconscionably high profits to them and forcing that expensive energy on DISCOMs and consumers.
• State Governments and its functionary organizations in signing  one-sided and highly regressive PPAs, thereby creating scope for the solar plant promoters to bribe willing State political leaders and officials  as has been alleged in the Adani bribery case. Explore possibility of scrapping/ re-negotiating long-term PPAs with promoters of solar plants in order to prevent excessive profiteering.
• SEBI, CERC and State ERCs so as to ensure that they protect domestic investors’ interests
• Central investigating agencies so as to ensure that they investigate cases of corruption, extent of money-laundering and tax evasion.
• Examine the unfair advantage give to the private vendors through PLI and VGF and steps to be taken to stop these policy instruments.
  And based on the above examination to

• Design compensation packages for the unfair cost imposed on them by the policies of the central and state agencies
• Recommend undertaking largescale R&D and technology development plan to minimise dependence on China

Background notes

Solar energy can only be produced by direct sunlight impinging on the solar panels. That implies that if there is a cloud cover there will be no generation of solar power. Therefore, solar energy is intermittent. Consequently, Larger the size of the solar plant the more would be the loss of energy when there is no direct sunlight. This creates a situation where the investment is not fully recovered 24 x  7. In order to ensure that there is no interruption of power supply to the consumers the thermal plants have to make up the loss of power. When the sunlight come on and solar power generation states, thermal generation has to back down. Providing power when solar fails and backing down is done mostly by the State GENCO units with no compensation. 

The rate at which the solar power generator is paid is based on the terms set in the PPA signed and not on the cost of power available on the grid. That means the State DISCOMS are compelled to purchase power at higher rates than available power since all the power generated by the solar units has to be compulsorily purchased. 

Some facts

1. The total installed solar generation capacity in the country as at the end of September, 2024 was 90,672 MW, consisting largely of centralised generation plants.
2. The centralised generation plants generated 67,929 MU during the first 7 months of 2024-25.
3. This implies that only 14.6% of the energy that those solar plants (100% capacity utilisation) had been injected into the grid. Considering that 15-16% of it is lost through T&D losses, at the consumer end, the energy received was only 12.5% of the full capacity of the plants.
4. For every extra MW, the T&D investment of roughly Rs 3-7 Crores. In most large solar units, the T&D in denovo and dedicated public investment.

On the other hand, the private entrepreneurs obtains

• Land, water, other infrastructure at subsidised rates. They get huge tax concessions, from both   the Centre and the States. 
• Providing transmission facilities is the Government’s responsibility.
• Profit Linked Incentive (PLI) subsidies provided to profit-earning companies till date) have been of the order of Rs 20,000 crores.
• Viability Gap Funding (VGF), subventions of more than Rs 6,000 crores.

Analysis

Under the guise of India’s global commitment of 500 GW made by the Prime Minister at the UN Climate Change Conference, the Ministry of Power has under the Renewable Power Obligation (REO) made it mandatory for the DISCOMS to purchase 100 % of the electrical energy generated by the solar generating units. This imposes an annual increase, reaching staggering levels of 45% by 2029-30. Even at a much less proportion of centralised solar power generation, as indicated above, the grid absorption rate is as low as 14.6%.

Since solar power generation is intermittent, in order to ensure continuity of supply at the consumer end, power generated from other sources such as coal to be withdrawn depending on the fluctuations of power generated by the solar units. This is done mostly thorough the smaller coal generating units of state owned GENCOs. Not only are the GENCOs not compensated monetarily, but are held responsible for the low plant load factor (PLF) achieved by them.

As a consequence, of ambitious goal imposed on the system by global commitments the power consumers end up bearing the burden of the full cost of around Rs. 3,50,000 crores of 500 GW capacity but receiving only a miniscule of the energy from that capacity, though private promoters of centralised plants earn thousands of crores of rupees of profits every year over the next two decades or more depending on the long-term PPAs signed with them. 

In other words, in the name of India’s global commitments to reduce carbon emissions, every extra GW of new centralised solar generation thus imposed on the grid would imply Rs. 7,000 Crores of commitment charges on consumers. Not a single rupee of the so-called benefit of carbon benefits accrues to the consumer. 

To sum up, as Renewable Purchase Obligation (RPO) increases in leaps and bounds, the absorption rate will further decline, due to the kind of system constraints referred above. The irony of imposing such an ambitious goal on the system by global commitments is that it will result in consumers ending up bearing the burden of the full cost of around Rs. 3,50,000 crores of 500 GW capacity but receiving only a miniscule of the energy from that capacity. On the other hand,  private promoters of centralised plants earn thousands of crores of rupees of profits every year over the next two decades or so, from the cosy long-term PPAs they are gifted with. In other words, every extra GW of new centralised solar generation thus imposed on the grid would imply Rs. 7,000 Crores of commitment charges on consumers but without an appreciable addition to the energy supplied to them. It practically amounts to defrauding the consumers in the name of India’s global commitments to reduce carbon emissions. Not a single rupee of the so-called benefit of carbon benefits accrues to the consumer. 

People’s Commission on Public Sector and Public Services

About Peoples’ Commission on Public Sector and Public Services (PCPSPS): Peoples’ Commission on Public Sector and Services includes eminent academics, jurists, erstwhile administrators, trade unionists and social activists. PCPSPS intends to have in-depth consultations with all stakeholders and people concerned with the process of policy making and those against the government’s decision to monetise, disinvest and privatise public assets/enterprises and produce several sectoral reports before coming out with a final report. Here is the first interim report of commission- Privatisation: An Affront to the Indian Constitution.

For further details, please contact:

Thomas Franco 

Former General Secretary, All India Bank Officers’ Confederation & People First 

Email: reclaimtherepublic2018@gmail.com 

The post People’s Commission Demands Comprehensive Inquiry into Centralised Solar Power Policies and Malpractices appeared first on SabrangIndia.

Bengaluru: Solar power plant at HAL airport
 
If successful, renewables with 23 GW or 60% of the state’s installed capacity will generate 43% of the 110 terawatt-hour (TWH) electricity demand of Karnataka by 2027-28, said the July 2018 report by The Institute for Energy Economics and Financial Analysis (IEEFA), a think-tank, up from 27% today. Coal with 9.4 GW or 25% of the state’s total installed capacity will make up 39% of electricity generation in a decade, down from 49% today.
 
The journey may not be tough: In 2017-18, Karnataka added about 5 GW in renewables to reach a renewables installed capacity of about 12 GW— 46% of state’s installed capacity of 27 GW. Thus, Karnataka became the number one renewable energy producing state by ending the long reign of neighbouring Tamil Nadu, which had about 11 GW in renewables capacity installed as on March 2018.
 
“Karnataka’s progressive leadership offers a positive role model of electricity system transformation for the rest of India,” said the report written by Tim Buckley, IEEFA’s director of energy finance studies, Australia, and Kashish Shah, an IEEFA research associate.
 
“As other states follow Karnataka’s lead, India is set to take its place as a global leader in decarbonization,” the report said, adding that the merits of adopting increasingly low-cost renewables technology provides India with an alternative path to the “now outdated plan of increased reliance on expensive fossil fuel imports”.
 
In line with its climate-change commitment to the Paris Climate Agreement 2015, India is running one of the world’s largest programmes to install 175 GW renewables power capacity by 2022, thrice its current figure. This is enough to replace 175 coal-fired power plants of 1,000 MW and reduce India’s dependence on fossil fuels that produce greenhouse gases and hasten global warming.
 
Of India’s renewables target, 100 GW is to come from solar sources, with solar-radiation rich states such as Karnataka and Tamil Nadu playing key roles.
 
From import of electricity to self reliance
 
Karnataka’s installed capacity, including renewables, thermal, hydro and nuclear, is estimated to reach 38 GW by 2027-28, up 43% from 27 GW as on March 2018. The state will have to achieve an additional electricity supply requirement of 49 TWH from this increased installed capacity to reach “net zero imports”, meaning no imports to meet domestic demand, according to the report.
 
While net zero imports by 2027-28 is a conservative estimate, Karnataka could become an electricity exporter through expansion of its renewable generation resources, the report said.
 
Karnataka produced about 61 TWH electricity in 2017-18, and imported about 7 TWH from inter-state grid to meet its total demand of about 68 TWH, according to the report.
 
Of the 61 TWH produced by the state, 27% was generated from renewables through an installed capacity of 12 GW or 46% of state’s installed capacity of 27 GW, the report said.
 
The largest proportion of electricity, about 49%, came from coal-based power plants, with 9.8 GW capacity, working at 35% capacity factor. The other 24% was generated by hydro and nuclear sources with a combined installed capacity of 4.5 GW, as per the report.
 
As we earlier said, if Karnataka successfully adds 11 GW of renewable capacity in the next decade to the already existing 12 GW, and maintains the installed coal capacity at the current levels of >9 GW with increased capacity utilisation, it could comfortably meet the entire demand of the state without importing any electricity, the report estimated.
 
The only hiccup is that about 1.7 GW of state’s coal capacity may retire in the next decade, the report estimated. It also assumed that projects currently in the pipeline accounted for 1.32 GW of new coal capacity will be completed, and they will partially offset the retired capacity.
 
The state will thus be left with a cumulative coal capacity of about 9.4 GW in 2027-28, a 4% drop from 9.8 GW as on March 2018.  
 
Coal plants can fill in for reduced capacity by working more efficiently. “The current 35% utilisation rate [of the capacity] is unsustainably low,” said the report.
 
The slightly reduced net capacity over the coming decade, coupled with an improved average capacity utilisation of 53%, appears to be the only hope for the already stressed coal-fired power generation sector of the state, the report said.
 
Why moving away from coal is the way forward for Karnataka
 
As we said, Karnataka’s electricity generation mix is heavily dependent on coal. Since Karnataka does not mine coal, it is depends on coal delivered via the railways from mines in the Odisha, Telangana and Jharkhand, about 700 to 1,200 km away from its power plants. The state also depends on imported, seaborne coal.
 
Coal from other states adds about Rs 2,130 per tonne of rail-transport expenses (about 90% extra of basic coal cost) over mine-mouth coal cost of Rs 2,268 per tonne, including taxes, and poses “severe logistics issues”, according to the report.
 
Karnataka’s coal-fired power plants have spent about Rs 2,000 crore ($300 million) over two years in annual imported fuel costs, the report said.
 
These conditions make coal power costly, about Rs 3-5 per kilowatt-hour (KWH) using Indian coal and Rs 5-6 per KWH for imported coal.
 
Increasing domestic and international coal prices (coupled with currency devaluation for international coal) have taken these tariffs higher and the varying fuel prices are passed on to the consumer, Kashish Shah, co-author of the report, told IndiaSpend.
 
Given the expensive coal-based tariffs, Karnataka’s distribution companies have a “major incentive” to contract for new solar and wind at below Rs 3 per unit, the report said.
 
Recent solar tenders in Karnataka have seen near record low bids of Rs 2.82-3.06 per unit. In June 2018, Karnataka introduced reverse auctions–where the prices are decided through competitive bidding and the lowest bidder wins–for wind-powered electricity, with an upper cap of Rs 3.45 per unit, the report said. These rates are 30-50% less than coal-fired power tariffs.
 
(Tripathi is a principal correspondent with IndiaSpend.)

Courtesy: India Spend
 

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Dr Tushaar Shah (left) with Gujarat official Sujit Gulati

Well-informed sources have told Counterview that though two top state officials have personally examined the experiment, carried out under the direction of well-known water expert Dr Tushaar Shah of the International Water Management Institute (IWMI), things have refused to move.”

The experiment involves using solar pumps instead of diesel or electricity pumps for using groundwater for irrigation, but with a rider: The state government should connect the pumps with the state electricity grid and buy up whatever electricity is left unused after the farmers are done with irrigation.

Talking with Counterview on the sidelines of a media conference in Ahmedabad for promoting the experiment, Dr Shah explained, “If power is bought over by the state power distribution company, it would incentivize farmers to stop overexploiting groundwater for irrigation, even as turning them into solar power producers, helping climate change.”

Asked why the Gujarat government didn’t seem interested in the proposal, Dr Shah said, “Additional chief secretary, energy and petrochemicals, Sujit Gulati, personally visited the village Dhundi, where the experiment began two-and-a-half years ago, and found it very useful. We hope that our proposal will be accepted.”

The second official, who visited the village to oversee the experiment, and found it “interesting”, was state rural development commissioner Jayanthi Ravi. Interestingly, the Gujarat chief minister in an IWMI note has been quoted as praising the experiment, with the suggestion that a new solar policy would clinch the issue.
 

Jayanthi Ravi with Dr Tushaar Shah

Farmers’ solar power generation cooperative members, Dhundi

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