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The National Solar Mission – Loopholes and Consequences

The National Solar Mission – Loopholes and Consequences

The Jawaharlal Nehru National Solar Mission (JNNSM) was launched in 2008 with a goal of installing 22,000MW of solar power in India by 2022. The first phase, first batch bidding guidelines stated that a company is allowed to bid for only one 5MW solar PV and 100 MW solar thermal project. This was done to foster competition among project developers.

These guidelines were allegedly flouted by LANCO Infratech. In December 2010, LANCO, by floating front companies, had managed to secure about 40% of the total capacity bid in that batch. A government appointed committee comprising of senior officials from the Ministry of New and Renewable Energy (MNRE), the Ministry of Power and the Ministry of Corporate Affairs, is expected to submit its report on the allegation by end April 2012.

A year and two months hence, in February 2012, the same front companies floated by LANCO are under allegations of having obtained fraudulent project commissioning certificates. Seven associate companies of the LANCO Group have been granted commissioning certificates for 5MW solar projects each in Askandra, Jaisalmer. The certificates have been granted by the Rajasthan Renewable Energy Corporation Limited (RRECL), responsible for monitoring the completion of projects under the NSM in Rajasthan. These plants have not been completed yet. The deadline for completion was January 9th 2012. The RRECL defines project commissioning as the logistics for power generation being in place and while the plant does not necessarily generate power. RRECL Director (Technical) M.M. Vijayavergia has gone on record to say that since we have now learnt that all the panels were not installed, we are informing the NWN that these are partial commissioning certificates.”

This incident points to the faulty implementation of the NSM policy. The NSM does not have a strong due diligence mechanism for the bidding companies. There is a lack of proper monitoring mechanisms by the NTPC Vidyut Vyapar Nigam (NVVN) for the execution of the NSM projects and the validation of the commissioning certificates. Officials at the NVVN have acknowledged that they took the commissioning certificates on face value from RRECL without verifying them.

As a result of these irregularities, the MNRE has sent a team to verify all the solar projects in the country. This will provide a clear and more accurate assessment of the installed solar capacity in India. Further, the NVVN has penalized three of the seven companies which produced false commissioning certificates. Such an action has sent a strong message to the market that moving ahead, the policies and regulations will be strictly implemented.

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