Key Takeaways
- India is curtailing solar power output during low demand periods to stabilize its power grid and tackle congestion.
- Curtailed output has led to significant revenue losses for solar producers, particularly in Rajasthan, amounting to over $26 million since April.
- The government is urged to expedite transmission and battery storage projects to mitigate delays affecting project viability and investments.
Curtailing Solar Output in India
India is implementing measures to curb solar output during periods of low electricity demand, according to the Ministry of New and Renewable Energy (MNRE). This decision aims to maintain grid stability and alleviate congestion caused by a surge in green energy supply. The MNRE highlighted that delays in transmission projects and the early operation of some new power plants have necessitated these curtailments.
These actions represent a significant hurdle for India’s renewable power developers, who are facing diminishing supply contracts amid a slowdown in power demand. The National Solar Energy Federation of India (NSEFI) reported a concerning rise in curtailments, particularly in Rajasthan, the country’s leading green energy producer. The federation noted that curtailments have reached as high as 48% of output during peak generation hours, causing solar producers to incur losses exceeding $26 million since April.
Members of NSEFI, which include prominent firms such as Adani, Tata, Amazon Web Services, and SHV, have expressed alarm over how these curtailments threaten the viability of their projects and future investments. The federation indicated that project timelines in Rajasthan had already been postponed by 18-20 months due to prior delays in the transmission system. However, even with these adjustments, producers are still encountering additional hold-ups.
To address these challenges, NSEFI has appealed to the government to hasten the development of transmission and battery storage projects, which are currently delayed by as much as two years. The federal power ministry has indicated that it is prioritizing the fast-tracking of interstate transmission lines to bolster renewable energy support.
While Rajasthan is the most severely impacted region, other states like Tamil Nadu, Gujarat, and Maharashtra are also experiencing curtailments. Data from Tamil Nadu’s Renewable Energy Producers Association indicated that the state’s solar output was 10% below forecast levels in the last quarter. A spokesperson for the Tamil Nadu energy department explained that curtailment of solar energy is being employed as a “last resort,” and noted that even coal power is being curtailed due to low demand patterns.
Despite regional challenges, India witnessed record growth in renewable energy generation, primarily solar, over the first six months of the year, as several previously awarded projects came online. However, solar project awards dropped by 75% compared to the same quarter last year, with tenders for new projects declining by 65%, as reported by clean energy consultancy Mercom. The MNRE characterized this downturn as a “temporary recalibration” rather than a definitive slowdown, asserting that project bids continue to align with national targets and demand.
Government statistics indicated that the usage rate of solar capacity fell to 21.4% in May and further decreased to 19.5% in June. The MNRE attributed some of this decline to lower irradiance levels and projected that future capacity utilization rates would typically range from 21% to 25% during the February to June window each year.
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