Skip to main content

Nothing new about Gujarat's solar misadventures. They date back to 2008

By Rajiv Shah
Pointing out that it is hard to fathom why state governments in India go back on their word and tearing up contracts awarded by them, “Mint”, in an opinion piece, has given the example of how Gujarat has “reneged” one of its own deals. “In one fell swoop”, the daily says, “Gujarat’s power procurement agency cancelled tenders for 700 MW of solar power generation given to a clutch of energy producers, citing lower tariff bids in a subsequent auction.”
“The companies left staring at Letters of Award (LoAs) that might no longer be worth the ink they bear include Vena Energy, Tata Power, ReNew Power and O2 Power”, the unsigned opinion piece says, pointing out, “Last August, these firms had won contracts to put up facilities in Gujarat’s Dholera Solar Park through an auction process that yielded ₹2.78 per unit as the lowest bid for the supply of electric energy to a state-run power grid.”
It adds, “In October, Gujarat Urja Vikas Nigam Ltd gave out duly-signed LoAs. The final power purchase pacts were to be inked in January. But that was not to be. In December, an auction for another solar project threw up ₹1.99 per unit as the lowest bid. The gap between the two was presumably too much for the state to live with, and, in a travesty of due process, it nullified the Dholera tenders.”
While some of the aggrieved firms are set to challenge the state’s decision at the Appellate Tribunal for Electricity, the opinion piece states, the opinion piece reminds of a blog for the “Times of India” I wrote on August 20, 2013 about misgovernance under Modi’s Gujarat. It is titled “Narendra Modi’s Solar Eclipse”:
***
In was January-end 2008. I was planning a story on spurt of investment in Kutch district of Gujarat after the killer quake of January 26, 2001. I called up RJ Shah, then chief principal industrial advisor (a strange designation, I thought, principal and chief together!), and he immediately responded, saying, he had all the details and I should reach his office in the industries commissionerate in Udyog Bhawan, Gandhinagar. A diligent government official who always had all the industry figures on his tips – something which is a rarity in the babudom today – Shah scanned through his papers and was simply awestruck: “This is absolutely marvelous. Kutch has as of today Rs 78,688 crore worth of investment under implementation, which comes to 39 per cent of Gujarat.”
Then, Shah decided to have a closer look at the investment proposals, and one of them happened to be a solar project. “Wait, wait, wait”, he looked through his traditional spectacles. “This is really very strange. This solar project, by one Suryanarayan Power Generation Ltd, alone is for Rs 26,000 crore. I have no idea about how this project got into the list of Industrial Entrepreneurial Memorandums, submitted to the Government of India (GoI)”, Shah declared, adding, “Even the address looks strange – Saraspur, Ahmedabad, with no other contact details”. I decided to make further investigations and approached Gujarat Energy Development Agency – the Gujarat government’s arm for alternative sources of energy – which was headed by Vangmin Buch, another amicable official, who had deeper knowledge of things cultural than anything solar.
Buch told me, rather frankly, that the project proponents had approached him, and had even made a presentation. “Thereafter, we tried approaching them at the address they had given us, of Saraspur, Ahmedabad, but they never replied. There is no phone number.” Yet, he suggested, someone from the Gujarat government ensured that the project proponents filed an IEM with the GoI – perhaps with the intention to jack up figures of investment in Gujarat, especially for solar projects. An insider confided it to me that this was done at the instance of state industries minister Saurabh Patel, who even insisted Gujarat government sign a memorandum of understanding (MoU) with the this company. “Patel’s idea was spiked by then principal secretary, energy, S Jagadeesan”, I was told.
The story on Suryanarayan Power Generation Ltd was published in the Times of India, saying the state government was failing to find its address, though it had ensured that an IEM was filed. Suddenly, the project proponents showed up, they reached my office in Ahmedabad to issue a rejoinder. The personal assistant of my editor of the Times of India, Ahmedabad, phoned me up in Gandhinagar to say that the CEO of the company was sitting on his personal computer to type a rejoinder and wanted to see me. The CEO talked to me on the Times of India phone, said he wanted to see me. We decided to meet in my Gandhinagar office next day, at Akhbar Bhawan, exactly at 11.00 am.
I reached office on time, tried to locate a swanky car but couldn’t find one. So I thought that the CEO had still not come. On entering office, I found three persons were waiting to see me. One of them introduced himself as the CEO of the company, even gave me his business card. I promptly asked him, “I didn’t see any car. How did you come?” And the answer was, “By state transport bus to Gandhinagar bus stand, and then by rickshaw.” Very interesting! I asked him, how he would bring in Rs 26,000 crore, as even the address was not clear, and this is what this CEO replied: “Oh! Money is no problem. Our project can go right up to Rs 90,000 crore. We only need land in Kutch, and that’s it.”
But who will fund the solar project? Banks? He further replied, “It is a secret, but we can tell you. We have had talks with officials of the Dalai Lama’s organization, and they have promised us all the help, including financial. They don’t have any problem of funds.” The meeting ended amicably here, following which the CEO handing me over a project report. Then he asked me, “How do we go to the industrial commissioner’s office? Can we meet anyone there?” I asked my peon to go and find a rickshaw for the CEO and two others who accompanied him. I was later told, on the minister’s insistence, the CEO even made a “high level presentation” before the Gujarat government!
Suryanarayan Power Generation Ltd is not the only example of the type of investors the Gujarat government wanted to rope in, in order to showcase how the state was all set to become the “solar capital” of the country. With the Gujarat government offering a lucrative Rs 15 per unit for the first 12 years of investment to anyone setting up a solar plant, a senior GEDA official told me in 2012, “proposals for 20,000 MW of solar power had been received and were pending to be cleared, and these included (imagine!) few neorich foodgrains merchants, too, operating in the Agricultural Produce Marketing Committees (APMCs) of Gujarat.”
Out of the 20,000 MW, Gujarat government “screened” and “signed up” power purchase agreements (PPAs) for 960 MW, three-fourths of India, with tens of solar units, taking advantage of the offer of such a high subsidy. Till the middle of last year, 650 MW plants had already come up, producing 3 million units per day of power. “It would mean the state would have to shell out at on an average Rs 1,600 crore per year for next 12 years only to pay for the high price at which the solar power was being sold”, a senior official, who calculated the whole amount, conceded to me. Objections began being raised by senior officials of the Gujarat Urja Vikas Nigam Ltd, the outfit which was born out of former Gujarat Electricity Board, they had “no money”, that they would go “bankrupt”.
Realizing that the solar hype would cost the coffers huge sums, state principal secretary, energy, D Jagatheesa Pandian, decided to approach the Gujarat Energy Regulatory Commission (GERC), early this year, asking the government to “allow” a revision of PPAs, slashing down the payment drastically. The outgoing GERC chairman, PK Misra, principal secretary to the chief minister during the 2002 riots and known to be close to Gujarat CM Narendra Modi, perhaps for the first time in several years refused to oblige the Modi government (though for wrong reasons), surprising most babus in Sachivalaya. While the Gujarat government cited “unwanted and windfall gains to solar developers”, the GERC dismissed the state plea as “not maintainable”.
There is reason to wonder: What was the great urgency to go in for solar PPAs at a time when experts had all along been warning that the cost of setting up solar power was coming down, and the Gujarat government should wait instead of rushing to set up solar power plants like this? The mad solar rush reached a point when a solar park was set up in North Gujarat. The hype continued, till Pandian decided to act, finding problems to the coffers. Clearly, there cannot be any other explanation to this than Modi’s and his aides’ effort to showcase Gujarat as the sole place in India where solar power investors could come and invest. Playing politics at the cost of state coffers – this seems to have been the sole aim of the whole exercise.
Already, officials admit, the capital cost of solar power per MW has come down by half. More recently, many of the plants were established in India on purchase of power equipment at a sharply reduced cost, for Rs 7 crore per MW, down from Rs 16.50 crore per unit in the middle of the last decade. Now, with the GERC order in hand, at Rs 15 per unit, Gujarat entrepreneurs would recover the capital cost of power from government subsidy in no time. Thereafter, they would be happily living on government subsidy, especially when the actual cost of producing solar power is just 15 paise per unit. Last year, at a reverse bidding in Delhi, the capital price of solar power was pegged at Rs 7.75 per unit. “Yet, we will have to continue are offering Rs 15, thanks to our misadventure”, a senior official told me.
Meanwhile, there is no end to Modi’s solar misadventure. After being the first in India (again!) to set up 1 MW of solar power panels, 750 metres long, atop a Narmada branch canal, at the unprecedented cost of Rs 17.50 crore, the Gujarat government recently declared it would replicate it for another 10 MW, again on canal top – at the cost of Rs 12 crore per MW. And, this at a time when the cost of setting up a solar power has already come down to nearly half as much! And what would the Gujarat government do with solar power, at a time when it is already a power surplus state? “We think that the Government of India should buy up all of surplus solar power”, to quote one official.
One can wait – hopefully, Modi would do it in case he becomes Prime Minister!

Comments

TRENDING

Hold your breath! UK ex-Muslims to celebrate Blasphemy Day on September 30

Soheil Arabi The Council of Ex-Muslims of Britain (CEMB), in a suprise move, has decided to observe September 30 as the Blasphemy Day. In an email alert, Maryam Namazie, CEMB spokesperson, has asked anyone interested to join CEMB in celebrating blasphemy by " uploading your photo into our #blasphemyday frame and sharing on social media."

Diaspora protest as Biden failed to publicly address persecution of minorities in India

As Modi addressed UN, human rights groups decried “monstrosity” of persecution of Muslims, Christians, Dalits, and other minorities in India. Demonstrators gathered outside UN to protest fascism, hate campaigns, weaponized rape, apartheid, lynchings, unlawful arrests, attacks on the media, and other abuses in India: A report distributed by the diaspora group Hindus for Human Rights: *** While observers said it was “shameful” that President Biden failed to publicly address widespread persecution of religious minorities in India when he met with Indian Prime Minister Narendra Modi on September 24, more than 100 members of interfaith and human rights groups spoke out as Modi addressed the United Nations General Assembly. Speakers condemned the egregious human rights violations and murders of religious minorities in India under a government that openly supports Hindu supremacy. The rally was sponsored by 21 organizations, including Ambedkar International Center, Ambedkar King S

What this veteran Gandhian witnessed at Rajghat is indeed intensely disturbing

Renowned Gandhian, activist and physicist Professor VK Tripathi witnessed an “intensely worrisome” event at the Gandhi Samadhi on his birthday on October 2, 2021. “The children of the Hindutva criminals who assassinated him have captured places which are supposed to keep Gandhiji's heritage alive”, says Deepak Joshi in a Faceook post, insisting, “We should strongly protest against it. It is already too late.”

Forthcoming book explodes Western myth: Personal qualities are biologically inherited

Jonathan Latham, PhD, Executive Director, The Bioscience Resource Project, New York, has said in an email alert via JanVikalp that his forthcoming book about genetics and genetic determinism, provisionally titled "The Myth of The Master Molecule: DNA and the Social Order" criticises the notion that personal qualities are biologically inherited: *** The contention of the book is that the key organising principle of Western thought is the seemingly innocuous and seemingly simple idea that our personal qualities are biologically inherited. That is, our character derives from our ancestors rather than being an always-adapting product of our own experiences, decisions, and education. The book makes the case, first, that genetic determinism is a scientific fallacy. Organisms are self-organised systems and therefore are not genetically determined. Second, the explanation for the myth, which predates Mesopotamian cities of 6,000 years ago, is its utility. Genetic determinism rationa

International Energy Agency floats new plan to end oil, gas, and coal expansion

In major shift, International Energy Agency (IEA)’s World Energy Outlook has mainstreamed 1.5°C pathway, showing need to end oil, gas, and coal expansion, insisting on new fossil fuel phase-out benchmarks in order to test government ambition ahead of COP26. A report by Oil Change International, distributed by BankTrack: *** For the first time, the International Energy Agency (IEA)’s flagship annual report on global energy pathways, used worldwide to influence trillions of dollars in investment, details an achievable roadmap to keep global heating below 1.5 degrees Celsius (°C). By making a 1.5°C scenario the benchmark of this year’s World Energy Outlook (WEO), the IEA challenges governments and companies to back up lagging Paris pledges with immediate action to shift the energy system away from fossil fuels. Notably, this year’s WEO solidifies the policy conclusion, first presented by the IEA in May , that no new oil, gas, and coal extraction projects should be approved under a 1.5°C-

UN Food Systems Summit paved the way for greater control of big corporations

In a sharp critique of the  UN Food Systems Summit, a statement released by the People's Coalition on Food Sovereignty, a global network of NGOs, has accused UN meet of being steered by big corporations, even as the Global South was pushed back. *** The Global People’s Summit (GPS) on Food Systems slammed the recently concluded UN Food Systems Summit (UN FSS) for paving the way for greater control of big corporations over global food systems and misleading the people through corporate-led false solutions to hunger and climate change. “It was just as we expected. While branding itself as the ‘People’s Summit’ and even the ‘Solutions Summit,’ the UN FSS did not listen to the voices of marginalized rural peoples, nor forward real solutions to the food, biodiversity and climate crises. Instead, it let powerful nations and big corporations play an even bigger role in determining food and agricultural policies. The UN has finally made it clear what ‘multilateralism’ is all about—paying l

Ex-official: Why not offer Vaishnaw loss making BSNL, Air India to prove his worth?

By Rajiv Shah A senior chartered accountant, whom I have known intimately (I am not naming him, as I don’t have his permission), has forwarded me an Indian Express (IE) story (July 18), “Ashwini Vaishnaw: The man in the chair”, which, he says, “contradicts” the blog (July 17), "Will Vaishnaw, close to Modi since Vajpayee days, ever be turnaround man for Railways?" I had written a day earlier and forwarded it to many of my friends.

Known to have assissinated O'Dwyer, Udham Singh chose not to apologise to the British

Udham Singh (26 December 1899 – 31 July 1940), best known for assassinating Michael O'Dwyer , the former lieutenant governor of the Punjab in India , on 13 March 1940, done in revenge for the Jallianwala Bagh massacre in Amritsar in 1919, for which O'Dwyer was responsible, was subsequently tried and convicted of murder and hanged in July 1940. While in custody, he used the name Ram Mohammad Singh Azad, which represents the three major religions of India and his anti-colonial sentiment. Writes a well-known analyst, "He too could have apologised. He chose the noose instead!" Udham Singh's speech prior to sentencing in UK: *** “I say down with British Imperialism. You say India do not have peace. We have only slavery Generations of so called civilisation has brought us everything filthy and degenerating. known to the human race. All you have to do is read your own history. If you have any human decency about you, you should die with shame. The brutality and blood

Gujarat cadre woman IAS official who objected to Modi remark on sleeveless blouse

By Rajiv Shah Two days back, a veteran journalist based in Patna, previously with the Times of India, Ahmedabad, phoned me up to inform me that he had a sad news: Swarnakanta Varma, a retired Gujarat cadre IAS bureaucrat, who was acting chief secretary on the dastardly Godhra train burning day, February 27, 2002, which triggered one of the worst ever communal riots in Gujarat, has passed away due to Covid. “I have been informed about this from a friend in Jaipur, where she breathed her last”, Law Kumar Mishra said.

Indian Doctors for Truth want Modi to stop overzealous universal vaccination drive

At a time when there is a huge demand to ensure that vaccination should be universal in order to gain immunity against the pandemic, an organisation called Indian Doctors for Truth, have asked Prime Minister Narendra Modi for the “urgent need to stop the overzealous universal vaccination drive against Covid-19.  Read the letter, signed by 18 doctors and a health expert: ***