NEW DELHI: India is exploring ways of denying Chinese firms from participating in the marquee 7.5 gigawatt (GW) solar power development contract in Ladakh that also involves setting up a 900-km strategic power transmission link to help supply electricity across the country, said two people aware of the development.
The deadline for bid submission for the tender is 31 July and comes in the backdrop of India leveraging its growing power sector market to ready an economic response against China. Even as tensions between the Himalayan neighbours have abated a notch, India is focussing on upgrading infrastructure in the border areas.
According to the present contours of the scheme, a foreign company is allowed to participate on standalone basis or as a member of consortium. State-owned Solar Energy Corporation of India (SECI) is running the selection process for setting up 7.5 GW of grid connected solar projects in Leh and Kargil districts and will sign a 35-year long power purchase agreements (PPA) with the successful bidder.
"The tender is yet to be finalised. While it is an international competitive bid, whatever is needed to discourage Chinese firms from getting involved in this critical project will be done. We are working on it," said a senior Indian government official cited above requesting anonymity.
These projects are planned to be set up in blocks of 2.5 GW each and will help supply power to the people of Leh and Kargil, besides defence establishments, during harsh winters and also help transmit surplus power to the rest of the country.
“A lot of things will now have to be taken into consideration," said another government official cited above who also did not want to be named.
The projects are part of India’s strategy to develop the Union territory of Ladakh and seeks to resolve grid connectivity problems in the region. The plan is to set up a total of 23 GW grid-connected solar projects of which 2.5 GW will set up in Zanskar sub division and Tai Suru block of Kargil and 5 GW in Hanley Khaldo area of Nyoma sub-division in Leh.
A senior SECI official, requesting anonymity, said, “We've not received any directions in this regard. We can't comment on whether India is banning Chinese companies from participating in this tender. As on date, the bid is open to all global players."
India’s economic strategy against China is part of a broad response to Chinese aggression in Ladakh. India is evolving a strategy of not using Chinese equipment and technology in the strategic power sector, including subsidising finance for promoting local power equipment usage and prior-permission requirements for imports from countries with which it has a conflict. The plan also involves procuring all power sector equipment and materials from within India that has sufficient domestic capacity and testing of imported equipment.
Queries emailed to the spokesperson of India’s ministry of new and renewable energy on Monday evening remained unanswered.
Tensions have been simmering along the India-China border in Ladakh's Galwan region while hostilities with Pakistan have risen in the recent past. Given the security imperatives, some believe that critical power infrastructure in such strategic areas should be controlled and managed by the government.
Mint reported on 30 June about privatisation of electricity distribution companies (discom) in the union territories of Ladakh and Jammu and Kashmir (J&K) may be put on hold due to security concerns, among other reasons.
The transmission link construction is considered to be a logistical challenge, considering the region remains snow covered for nearly six months with very low temperature and oxygen levels. It will help attract investments for setting up green energy projects in the cold desert region.
Speaking at the states’ power and renewable energy ministers' video conference, power and renewable energy minister Raj Kumar Singh last week said import replacement is a priority, and that the power sector, being strategic and essential in nature, is vulnerable to cyberattacks.
Ladakh, Thar, Rann of Kutch, Lahaul and Spiti have the potential to generate 315.7 GW of solar and wind power and will require investments of Rs43.7 trillion over the next 30 years to 2050, according to a study conducted by the state-owned Power Grid Corporation of India Ltd. The government is also exploring the feasibility of setting up storage projects in Leh-Ladakh.
The reorganisation of the erstwhile state of Jammu and Kashmir into two Union territories has given the Centre direct control over Jammu and Kashmir, and Ladakh. This, in turn, is expected to speed up approvals for infrastructure projects.