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ABSTRACT
While some countries have made significant advances in the deployment of
photovoltaic cells and solar thermal projects, India’s growth rate is sluggish. Solar
energy building contractors and the Ministry of New and Renewable Energy (MNRE)
have often been criticised due to a history of missing targets for solar installations. The
negligence in mitigating risks at an organisational level, as well as a project level, can
affect solar projects at a catastrophic level.
Failure to identify and manage risks can be held accountable for the delays in the
advancement of current and future projects. The aim of this paper is to investigate the
state of solar projects in India, with an objective to create a knowledge base of assorted
risks in the Indian context. Overall, this paper establishes the need for future research to
investigate the competency of Project Management Offices in managing solar energy
project risks.
INTRODUCTION
Numerous solar energy projects have been created around the world to reduce the
greenhouse gas emissions. The need to replace fossil fuels has engendered a sense of
urgency in seeking energy resolutions, and project managers and associates are under
pressure to generate results from their ongoing solar projects. However, the eco-friendly
targets of solar energy projects cannot be attained unless their associated risks are
mitigated.
Risk associates and project managers in project management offices (PMO) play an
important role in ensuring that projects are completed by the scheduled date. A
comprehensive review of risks is critical to affectively manage a solar project. If a
PMO’s associated project is not completed on time, there is a question mark over their
aptitude and expertise.
This paper stipulates the need for further research to rank and categorise risks in order
to discover why solar energy projects in India have a history of missing targets. The
research should also examine risk management strategies adopted by solar contractors
employed by their PMOs.
This research paper comprehensively analyses literature to discuss the past and present
target achievements of various solar projects. The analysis of solar energy development
in India will provide stakeholders and building contractors with a knowledge base of
Target Result Target Result Target Result Target Result Target Result
SPV Lanterns
0 0 15,000 21,577 100,000 885 30,000 31,000 185,000 67,259
(nos)
Target Cumulative
Achievements during Total achievement
Renewable Energy 2011-2012 achievement up to
June 2011 (MW) 2011-2012 (MW)
(MW) 30/06/2011
Government
Instability
Policy Risk
Electricity Tariff And
National Risk Grid Connection Policy
Risk
Licenceing And
Decommissioning Risk
Legal and Regulatory
Contract Risk
Risk
Legislation And
Compliance Risk
Credit Risk
Reliability Risk
Operation,
Maintenance And
Servicing Risk
Performance Risk
Transparency Risk
Procurement Risk
Social Risk
OHS Risk
Political Risks
It is crucial that the India government creates a clear and consistent regulatory
environment in order to improve the solar success rates (Indian Express 2010). Stable
and enduring policies would improve the achievability of targets of solar projects.
Technical Risks
Solar expertise also demands highly accurate engineering apparatus such as parabolic
mirrors and receiver tubes, which are not obtainable locally (Sargsyan et al. 2010)). Data,
process consistency and quality standards are not consistent because of inadequate field
knowledge, with each contractor imposing their own paradigm. The intensity of
customisation means that the solar apparatus has to be deployed on a project-by-project
basis, preventing companies from generating revenue on high-scale productivity
(Sargsyan et al. 2010). This risk develops due to a lack of expertise and little or no
experience in stimulating capital.
The inadequate accessibility of the appropriate infrastructure to connect grids is one of
the major risks of exploiting solar power sources. Moreover, there is a high likelihood
that the project hypothesis will never reach its execution stage, because there is a
possibility that the project will be declared infeasible or financially unviable. The nature
of risk attributes related to results is similar to that in the case of other infrastructure
projects, with likelihood that time and cost expectations will be exceeded, or that the
finished project will not be up to the required technical specifications. The risk of time
and cost overruns is reasonably high, and the effect of these stipulations is also
comparatively high. However, there are standard insurance covers obtainable to
moderate these risks. Project sponsors also transfer this risk by outsourcing construction
to a contractor through a turnkey contract (MNRE 2010).
CONCLUSION
The Ministry of New and Renewable Energy (MNRE) is justified in having a robust
planning mechanism for solar energy building projects in India, which will undoubtedly
create millions of jobs. However, it is evident that the progress and completion rates are
very slow. This shows that there is an urgent need for improvements to innovation and
processes to monitor the progress of schemes, projects and programs associated with
solar projects in India.
While the use of renewable energy has been regarded as a solution to the mounting
problems of climate change and people’s current heavy reliance on fossil fuels, some
important hurdles must be overcome so that renewable energy targets are achieved in
the near future. One of these problems relates to the state of risk management in India.
While it recognised that the success of science- or reason-based endeavours cannot be
predicted, one the deficiencies can be pointed out because of poor risk-mitigating
strategies. It is well within the control of Indian contractors to complete their projects on
time by successfully mitigating their project-associated risks.
REFERENCES
Beck, F. & Martinot, E. (2004). Renewable Energy Policies and Barriers. Encyclopedia
of Energy. Elsevier Science.
Bansal, R.C., Bhatti, T.S., Kothari, D.P. (2002). On some of the design aspects of wind
energy conversion systems. Energy Conversion and Management. vol. 43, pp. 2175–
2187.
Energy Sector Management Assistant Program. (2010). Unleashing the Potential of
Renewable Energy in India: South Asia Energy Unit, The World Bank Report,
viewed 10 April 2011,
<http://siteresources.worldbank.org/INDIAEXTN/Resources/Reports-
Publications/Unleashing_potential_of_Renewable_Energy_in_India.pdf>.
ESMAP—see Energy Sector Management Assistant Program.
Finlay-Jones, R. (2004). Putting the spin on wind energy projects: risk management
issues in the development of wind energy projects in Australia. World Wind Energy
Conference. Beijing.
Gupta, PK 2009, ‘Risk management in Indian companies: EWRM concerns and issues’,
vol. 12, no. 2, pp. 121–39.
Hillson, DA 2002, ‘Extending the risk process to manage opportunities’, International
Journal of Project Management, vol. 20, no. 3, pp. 235–40.