Solar Energy Project in Andaman Islands Scrapped

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Mahindra Susten’s landmark storage-cum-solar power project in the Andaman and Nicobar islands has been scrapped.

Mahindra Susten had last year won the bid to set up the 28-MWh project for NLC (formerly Neyveli Lignite Corporation).

Chairman and Managing Director at NLC India, Sarat Kumar Acharya, told BusinessLine, “There has been a change in requirement and we will be going for a fresh tender accordingly.”

NLC India will now call for bids for a smaller 8 MWh project. Bids for two other projects of 1 MWh each have already been called by the Military Engineering Services in the Union Territory.

Commenting on the cancellation of the project, Director at India Energy Storage Alliance (IESA), Debi Prasad Dash, said the frequent cancellation of tender may send negative signals to foreign as well as Indian companies keen to enter the energy storage space. In the last three years, more than 10 energy storage tenders have been cancelled.

NTPC too had scrapped a storage-linked solar project even before it was awarded. On the NLC project, early bidders had said the tender requirements were restrictive and the project was difficult to execute given the location of the islands.

On emerging the winner, a Mahindra Susten statement had said that the company had emerged as the lowest bidder at ₹289 crore which is 38 per cent lower than Government of India estimates leading to a saving of approximately ₹70 crore in Viability Gap Fund grant. The plant was expected to be commissioned by April 2019.

“This project will have 20 MW of solar and 28 MWhr of battery and will be one of the largest project of its kind in entire Asia,” the statement had said.

The islands currently meet all their existing power demand through diesel-run power generators. The Centre has aimed to generate the entire power requirement of the Andaman & Nicobar Islands through clean energy and was working on means, including solar power and Liquefied Natural Gas plants, for the same.

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