With Areva abandoning its solar dreams, the fate of what was touted to be Asia’s largest solar thermal power plant and world’s largest linear fresnel power plant has suddenly become uncertain. Reliance had taken a huge leap of faith by pursuing Linear Fresnel Reflector technology at a scale of 125MW (which is Phase 1 of a 250 MW plant). The plant was being funded by a consortium of US Exim bank, ADB, Dutch agency FMO and Axis bank with Reliance having an equity of 25%. In the wake of Fukushima disaster Areva’s nuclear business has been struggling and they have been without any new orders since 2007!
Until now, a number of promising milestones were reported for the plant being commissioned. In fact last year Areva had claimed that the cost of building a solar-thermal power plant in India had fallen by about a third since 2010 thanks to local manufacturing. At that time (September 2013) it was expected that the plant would be online by end of 2013. The plant was also approved for carbon credits in July under the UNFCCC which allows the project to generate and sell Certified Emission Reductions internationally, translating into direct revenues for Reliance Power. However it was later reported that the plant had just started supplying steam in November 2013. The latest update available from Areva in May 2014 shows that the plant is still only ‘almost’ ready.
With the exit of Areva, a query regarding the fate of the plant from The Hindu Newspaper to Reliance Power simply received a courteous “no comments”. Going with the good name and reputation of Areva, Reliance had taken a huge gamble and it can still succeed if the plant comes online and can be operated successfully. A white paper from the Climate Initiative’s case study notes that
After the public sector PPA reduced the revenue risks and foreign public debt the financing risks, the private sector was able to manage the remaining risks, but not always at low costs. We find that the amount of risk taken by the private sector (developer and technology supplier) in this case is much higher than standard practice for similar projects in other countries.
I will leave you with a snapshot of the plant as seen on Google Maps.