To
Smt Nirmala Sitharaman
Union Minister of Finance
Dear Smt Sitharaman,
Kindly refer to my letter of 23rd November 2024 on the recent indictment of the Adani Group by a US District Court for bribing political leaders for buying expensive solar power from the Adani-Azure consortium through the CPSE, the Solar Energy Corporation of India (SECI) [https://countercurrents.org/2024/11/us-district-courts-indictment-of-gautam-adani-raises-concerns-about-the-failure-on-the-part-of-the-central-government-sebi-and-other-institutions/]
In my letter of 6th December 2024 (https://countercurrents.org/2024/11/us-secs-indictment-of-adani-green-its-promoters-serious-charges-of-bribing-public-functionaries-and-committing-fraud/) addressed to the Cabinet Secretary, I had pointed out the related decisions of the Ministry of Power (MOP) and the Ministry oif New and Renewable Energy (MNRE) that suggested a deeper involvement of several Central agenciesin the above cited “solar scam”, requesting the government to institiute a comprehensive investigation to fix theresponsibility.
In my letters, among several other concerns, I had pointed out how the Central Government’s misplaced emphasis on centralised solar plants triggered the scam and the reasons as to why centralised solar plants based on solar technologies undergoing rapid obsolescence, involving huge transmission losses, are highly expensive, compared to decentralised solar power systems. Both the Centre and the States have encouraged private corporate entities to sign long-term power purchase agreements (PPAs) with DISCOMs for buying such power, in preference to placing solar power directly in the hands of consumers. Such long-term agreements extending over 25-30 years tend to commit DISCOMs to outdated solar technologies, which amount to committing an outright fraud on consumers.
Instead of appreciating those concerns, neither the Centre nor the States have cared to pause and shift the focus to distributed solar power systems. Instead, following the ambitious announcements made by the Prime Minister from time to time at global energy conferences, in addition to the already existing 57,000 MWe centrally generated solar power in place, Central agencies like MNRE and SECI and the States continue to rush headlong into adding more and more large solar plants, binding DISCOMs to signing PPAs for obsolete solar generation technologies that impose an additional heavy cost burden on millions of electricity consumers spanning the length and breadth of the country, without least concern for their well-being.Just to keep your Ministry and the public informed, large Centralised solar power plants occupy twice the area of land required by a conventional thermal power plant of equivalent capacity They function intermittently with low capacity utilisation factors, posing problems of grid stability.
To cite one example, the Adani Group’s Khavda solar plant in Gujarat is spread over 538 square kilometers (several times the size of Paris) [https://www.business-standard.com/companies/news/adani-green-s-khavda-power-plant-world-s-largest-5-times-the-size-of-paris-124041100994_1.html]It uses solar generation technology which may soon become obsolete. It transmits power to distant homes and agricultural fields in far-off villages in AP at an exorbitant cost, whereas those very same consumers could generate the same electricity at their own premises at a much lower cost and sell their surplus electricity to the grid to earn additional incomes.
The risks involved in encouraging large plants for centralised solar power generation would become abundantly clear, if one were to understand the plight of the Ivanpah solar plant (392 MWe) in the Mojave desert in California, set up in 2014 by BrightSource Energy and Bechtel.
According to news reports (https://www.hindustantimes.com/world-news/us-news/11-years-after-a-celebrated-opening-massive-solar-plant-faces-a-bleak-future-in-the-mojave-desert-101738282136398.html), “11 years after a celebrated opening, massive solar plant faces a bleak future in the Mojave Desert“. The report further says, “The Ivanpah solar power plant formally opened in 2014 on roughly 5 square miles of federal land near the California-Nevada border. Though it was hailed at the time as a breakthrough moment for clean energy, its power has been struggling to compete with cheaper solar technologies…….Pacific Gas & Electric said in a statement it had agreed with owners — including NRG Energy Inc. — to terminate its contracts with the Ivanpah plant. If approved by regulators, the deal would lead to closing two of the plant’s three units starting in 2026. The contracts were expected to run through 2039”
The fate of the Ivanpah solar plant should teach a valuable lesson to the Ministry of Finance about the futility of such expensive power plants based on technologies rapidly becoming obsolescent, favoured by the Centre and the States who, at the cost of the taxpayers and the public, give them land and water at concessional prices, allow tax subventions and direct subsidies in terms of State and Central tax exemptions, Production Linked Incentives (PLI) and subsidies in the form of “Viability Gap Funding (VGF)”. For example, between the Adani Group and the US-based Azure company, the Centre had doled out more than Rs1,000 Crores of direct subsidies, in addition to other concessions.
I understand that, in all, the Centre has so far disbursed outright subsidies totalling upto Rs. 27,000 Crores to profit-earning promoters of solar plants, just in terms of PLI and VGF. Should your Ministry be a party to it, when it is likely that all that amount belonging to taxpayers would only add to private business houses’ profits, not promote the well-being of the people?
If the Mojave Desert Solar plant in the USA has ended up as a pitiable non-starter, India is going to witness many, many Mojave-Desert-like solar scams soon, calling not only for an independent court-monitored investigation by Central investigating agencies, a comprehensive audit by the C&AG but also a serious introspection by the Parliament at the ongoing Budget Session, as it involves huge amounts of public money being spent indiscriminately on a highly imprudent approach and the present government creating a massive liability for its successors and the people at large, in addition to hurting the interests of millions of electricity consumers across the country.
May I request your Ministry to order a thorough review of the present approach of the government towards promoting centralised solar generation plants. I also request the government to place a total embargo on SECI and the States committing themselves to such centralised solar generation plants hereafter?
Regards,
Yours sincerely,
E A S Sarma
Former Secretary to the Government of India
Visakhapatnam
