India’s Ministry of New and Renewable Energy is seeking to defer penalties on about $1 billion of solar-thermal power projects that are delayed by a lack of water, financing difficulties and equipment shortages.
Seven projects totaling 470 megawatts in capacity by companies including by Godawari Power and Ispat, Reliance Power and Lanco Infratech that were to be ready by May, aren’t operational, Tarun Kapoor, joint secretary at the ministry, said in a phone interview from New Delhi. The projects could potentially forfeit about 2.3 billion rupees ($42.5 million) in performance guarantees, according to rules when the contracts were awarded in December 2010.
“There’s obviously a problem since all are delayed,” Kapoor said. “This is the first time solar-thermal projects are being built in India and we want them to succeed.” An expert committee at the ministry is recommending a 10-month extension for the projects, he said.
The delays are another blow to the solar-thermal industry suffering from high costs. France’s Areva SA had to scrap plans for a A$1 billion complex in Australia in November after failing to get financing. In contrast, a competing technology, solar photovoltaic, has benefited from a 61 percent plunge in panel costs over the past two years, according to data compiled by Bloomberg.
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