Home / News / India /  Adverse weather to inflate project costs in west India

NEW DELHI : The cost of building solar and road projects in western India is expected to rise following an increase in the frequency of extreme weather events such as cyclones in the region, said industry experts, analysts and top executives of infrastructure firms.

Bidders are likely to factor in the cost of disruptions caused by high-speed winds, rain and flooding in their financial models. In states such as Gujarat, where Cyclone Tauktae made landfall earlier this week, damaging some solar parks and roads, solar power tariffs are expected to go up.

With high-speed winds recorded on land during the cyclone, companies are now looking to focus on exhaustive cyclone studies for solar sites in Gujarat and Rajasthan. Also, infrastructure developers plan to spend more on constructing additional drainage, culverts and flood barriers to prevent damage to national highways.

“Given that cyclones are now becoming a norm in the western part of India, robust site plan needs to be worked out so that it takes into account all weather conditions," said Sanjay Aggarwal, managing director of Fortum India Pvt. Ltd and global head for solar at Finnish utility Fortum Oyj.

“We have undertaken flood resilience work across our assets in western India, and a good amount is being spent on studies that were not part of the initial budget. With rainfall volume being unprecedented, roads in low-lying areas are being damaged, and some parts are even getting washed away," the chief executive of one of India’s largest private toll road operators said, requesting anonymity.

While cyclones in the Bay of Bengal have been a regular phenomenon, they are also turning up in western India amid rising temperatures in the Arabian Sea, which experts attribute to climate change.

“Given the cyclonic activity in the region, project developers will have to focus on securing their assets. Historically, the ratio of cyclones emerging in the Arabian Sea to the Bay of Bengal region has been 7:3. Over the last three years, we are witnessing a sudden increase in the number of cyclones over the Arabian Sea due to increasing temperature," said Mahesh Palawat, chief meteorologist at weather forecasting company Skymet. “Also, we are now seeing monsoon patterns changing as well with the amount of rainfall increasing over Gujarat and Rajasthan, leading to heavy flooding," Palawat said.

“India’s western coast, traditionally benign, has seen rougher weather over the past few years, and studies are linking this to the adverse effects of climate change," said Peeyush Mohit, chief operating officer at O2 Power Pvt. Ltd, backed by Singapore’s Temasek Holdings and Stockholm-based alternative asset manager EQT Partners.

This assumes significance given Gujarat and Rajasthan are states with high solar power potential and crucial for India to achieve its target of setting up 175 gigawatts (GW) of renewable capacity, including 100GW of solar power by 2022.

“On the west coast, where cyclones were not that common, if they become a regular occurrence, wind and solar projects will have to factor the endurance limits, and that will definitely have an impact on capital cost as well as that of insurance," said Debasish Mishra, a partner at Deloitte Touche Tohmatsu India LLP.

“Typically, assets are designed to withstand the impact of historically observed weather disturbances. However, if a pattern emerges that shows that the disturbances are becoming more intense, over time, this starts getting factored into insurance premiums and the design strength of structures," said Mohit of O2 Power.

Also, cyclones over the Arabian Sea and Bay of Bengal used to move towards the north-westerly direction. This resulted in cyclones over the Arabian Sea moving away from the Indian coast towards Oman and Yemen.

“This low threat level was the reason why such studies were not an area of focus. Only two out of 10 cyclones over the Arabian Sea recurved towards the northeast direction and towards the Indian coast. Even the few cyclones that used to recurve and move towards the Indian coast weakened before reaching Gujarat or Karachi coast. Post the 1998 Gujarat cyclone that recorded 195 kmph wind speed after making landfall, Tauktae has been the strongest till date, with 185 kmph wind speed over Diu after landfall," Palawat said.

The cyclone caused extensive loss of life and property in Maharashtra, Gujarat, Rajasthan, Daman and Diu, and Dadra and Nagar Haveli, Kerala, Karnataka and Goa. Apart from damage to houses and crops, power and communication poles were uprooted, and shipping vessels and crafts’ moorings gave way.

“It is a good engineering practice to consider the specific enviro-physical parameters of a site while setting up infrastructure projects, as any disruption in operation can cause severe economic and human losses. With the increased impact of the climate changes on the weather, engineers need to build in probabilistic designs rather than just rely on past data," said Sanjeev Aggarwal, founder and managing director of Petronas-owned Amplus Energy Solutions Pvt. Ltd.

India has been incurring losses due to the impact of climate change resulting in extreme weather events, as mentioned in the recent Economic Survey. However, with the clean energy space facing multiple issues relating to low tariff, curtailment in power procurement, delayed payments and tariff-shopping by electricity distribution firms, some believe there are limited options available. “For sure, the weather risks seem to be getting worse. But where is the cushion in prevailing bids for robust construction practices? Most often, developers and contractors are under immense pressure to cut costs," said Vinay Rustagi, managing director at consulting firm Bridge to India.

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