Power Sector in India – Role Solar Can Play Indias Current Solar PV Installation Base Agenda SPV Technologies Lessons Learned Conclusions
Source: World Bank, CEA Source: EIA, CEA India – Electricity Opportunity India per capita Electricity Consumption is lagging well behind World Average and this would catch up fast owing to rising levels of Disposable Income An average of 16 GW of power generation capacity installations required each year till 2020 to meet fast growing demand for electricity power Source: D&B Industrial Research Service
India has huge potential for solar power deployment Source: MNRE, Edelweiss Research (As at June30, 2012 Solar Power Density in India India receives on an average 4-7kWh/m 2 of solar energy daily with an average of sunny days in a year Rajasthan and Gujarat receive maximum radiation in the range of 6–6.6 KWh per square meter Cumulative grid connected Installed solar power capacity is quite low in India Accounting for a negligible proportion of Indias power capacity Capacity additions in Indian solar industry have been miniscule as compared to the additions globally India yet to optimally utilize its solar potential Grid connected Solar Power (Cumulative Capacity) 1,035 MW Additions during last year (FY12)446 MW Off-grid Solar PV plants (Cumulative Capacity) 85 MW Solar Water Heating – Collector Area (Cumulative Capacity) 5.63 Mn Sq. m Solar installed capacity – India Source: * MNRE - Development of Conceptual Framework for REC Mechanism
India Poised to be a Major Global Contributor E&Y Solar energy attractiveness Index : India ranked 2 nd in the world – only behind USA RankCountry Installed capacity (GW) in 2011 Solar Power Target Clean Energy Target Key incentives 1USA :~ 16 GW 17%Production / Investment tax credit 2India : 22 GW15.90%FiTs, REC, Capital subsidy 3China : 9 GW 2020 : 50 GW 15% of primary energy Feed-in-Tariffs (FiTs), GBI for rooftop an biding installed PV, Tax incentive for PV 4Italy12.4NA17%FiTs, REC, Tax incentive 5Spain : 8-9 GW 20%REC, Tax incentive 6Australia1.3NA 20% of total consumption Generation Based Incentive (RBI), Renewable Energy Certificate (REC) 7Japan : 28 GW22%FiTs, REC, Tax incentive 8Germany : GW 35% (50% by 2030, 65% by 2040, 80% by 2050) FiTs, REC, Tax incentive India, USA rapidly advancing; EU slow and steady USA : Continues to grow rapidly with a 300 MW in Arizona receiving approvals. Expected to remain the largest solar market in world in near future India : Rapid growth seen in high potential solar states of Rajasthan and Gujarat. Gujarat launches Asia's largest solar park of 600 MW China : Many large-scale plants commissioned. Hit by oversupply in the international export market Italy, Spain, Germany : Affected by the sovereign debt crisis and a weak future economic outlook of the Euro Global Solar Market Outlook Source : Industry Research, Ernst & Young Report on Renewable Energy Country Attractiveness indices
Institutional Arrangement to support bundling of Solar Power Strong National Policy Initiatives at the Centre (JNNSM) State Government (Land, Water, Other Sanctions) Solar Power Developer Central Electricity Authority (Technical Support) National Thermal Power Corporation (NTPC) NTPC Vidyut Vyapar Nigam (NVVN) Buys Bundles Sells State Electricity Boards (Buyers of bundled power) CERC Determines Tariff 1 kWh Solar 4 kWh Thermal Bundled 5 kWh at INR 4.17/kWh Comprehensive framework for development of solar power in India Covers both solar power generation as well as manufacturing Incorporates specific fiscal / monetary incentives Objectives Installed solar power generation capacity of 20 GW by 2020; 100 GW by 2030 and 200 GW by 2050 To achieve grid parity by 2020 To achieve parity with coal-based thermal power generation by GW of installed solar manufacturing capacity by mn solar lighting systems for rural areas by 2022 Note : Rates for SPV and ST based on average bidding tariff. The above rates expected to be achieved on commissioning of all power plants by May Jawaharlal Nehru National Solar Mission (JNNSM)
Among the states, Gujarat – Leading the Way TariffsPV project (Rs. /kWh) Thermal projects (Rs. /kWh) Projects commissioned before (for first 12 years)10 (for first 12 years) 5 (from 13 th to 25 th year)3 (from 13 th to 25 th year) Projects commissioned after (for first 12 years)9 (for first 12 years) 3 (from 13 th to 25 th year) Gujarat First state to launch an independent solar policy in Policy operative till PPAs of 969 MW signed. The projects allocated through the MOU route with pre-qualification criteria Projects of 690 MW commissioned till 30 th June, Asias largest Solar Park – The Charaanka Solar park in Patan district of Gujarat inaugurated in April, 2012 An energy surplus state. Does not need to allocate more projects to fulfill its RPO obligations Gujarat Energy Development Authority (GEDA) provides assistance in identification of suitable locations, facilitation in arranging Right of Way & recommending the project High investor confidence – More than 1000MW of projects have pre-registered for future allocations Applications worth 1715 MW received for allocation of 150MW Banaskantha Patan Surendra Nagar Asias largest solar park
…And other states following suit ParticularsKarnatakaRajasthanMadhya PradeshTamilnaduOrissa Policy instrument Karnataka Solar Policy, Rajasthan Solar Energy policy, MP Solar Energy PolicyTN Solar Energy Policy 2012 Target Capacity 200 MW - DISCOMS upto (40 MW p.a.) 50 MW - Thermal 100 MW - REC mechanism 50 MW SPV; 50 MW ST DISCOMS Phase I (upto 2013) -200MW Phase II ( ) - 400MW 10 MW : MNRE 200 MW SPV announced 3000 MW by 2015, including rooftop 1500 MW utility scale by MW SPV in announced Capacity Cap SPV : Min 3 MW, Max 10 MW ST : Min 5 MW SPV : Min 5 MW, Max 10 MW ST : Min 5 MW, Max - 50 MW SPV : Min 5 MW NA 25 MW Sale of Energy under state policy Reverse bidding Ceiling tariff : SPV : INR / kWh ST : INR / kWh Reverse bidding Ceiling Tariff : SPV : INR / kWh Reverse bidding Ceiling Tariff : SPV : INR / kWh Reverse bidding Ceiling Tariff : SPV : INR / kWh Reverse bidding Lowest bidder offered entire 25 MW Operational : State Policy JNNSM, Phase I Batch I Migration scheme RPSSGP through IREDA 14 MW - 25 projects : 125 MW 8 projects : 37.5 MW 10 projects : 10 MW project : 5 MW - 7 projects : 7 MW Bids awarded under state policy / other schemes 80MW under State Policy 30 MW - 30 months of PPA; 50 MW - 18 months of PPA 817 MW - REC mechanism 100 MW - NTPC – Bundled Last date for submission of RfS for 200 MW postponed indefinitely 200 MW under State Policy Expected allocation of 1000MW in MW Source: MNRE, State Nodal Agencies, Research Reports
StateElectricity Consumption (Bn units) Equivalent Solar Installation capacity (MW) RPPO 3% (FY 22E) FY13EFY 22E Andhra Pradesh Chhattisgarh Gujarat Haryana Jharkhand Karnataka Madhya Pradesh Maharashtra Orissa Punjab Rajasthan Tamil Nadu Uttar Pradesh West Bengal Total968.71,914.5 Solar RPOs Pushing the Frontiers Further 38,290 MW The solar power purchase obligation for the States start with 0.25% in phase 1 (FY ) and go up to 3% by FY 2022 Installed solar capacity by FY 2022 estimated at 38 GW
*Source: MNRE and Bridge to India: Solar Compass: Oct 2012 as on Oct 2012 Total Grid Connected Installed Capacity Map – India
Solar – Knowledge base and Technology Grid Extension, Availability and Stability Solar Photovoltaics (SPV) Technology PV production – whole value chain Equipment PV production – whole value chain Grid Connected Solar Farms – EPC, Inverters, Monitoring Systems Engineering Risk Assessment and Insurance Solar Resource Assessment (GHI, DNI) : Satellite Based Estimates & Ground Measurements Solar Resource Assessment (GHI, DNI) : Satellite Based Estimates & Ground Measurements Financing
What are various SPV technologies ? c-Si Thin Films Mono / Single- Crystal Multi / Poly Crystal Amorphous SiliconCdTeCIGSOrganic a-Si ( single Junction ) Tandem / Micromorph/ Double Jn/ Triple Jn 18-23% %~6-8%~9-10%~11%~12%~5% ?
PV Technology wise status (JNSM) JNSM –Phase I (Batch-1): 150 MWPhase I (Batch-2): 350 MW (Anticipated) Cheaper Financing Options decide the technology options – Equipment comes with funding c-Si Module to be manufactured domestically c-Si cells and Module to be manufactured domestically
Technology share in Gujarat & leading financiers 16 Cheaper Financing Options decide the technology options – Equipment comes with funding
Technology Vision for the PV Future What technology is needed What is needed to develop that technology What challenges it would involve to get commercialized Who needs the PV technology For what? Where/When does one need it
Who needs Solar ?
Who needs Solar ? For What?
A Systems Approach Top-down Approach – Grid Centric Bottoms-up Approach – Off Grid, Needs Specific Solutions
Photovoltaic Systems PV Panels: high efficiency at low cost ! Inverters: Long Life time ?, Higher efficiencies, Tropicalized, more intelligent Variability of Solar Resource - Storage solutions: Batteries, Ultracapacitors,…. Power electronics – Load Specific Transport of power – Availability and Stability of Grid Frugal Engineering – Tata Nano
Lessons Learned : Lack of reliable radiation data 22 Solar Monitoring Stations MNRE has initiated a major project on Solar Radiation Resource Assessment (SRRA) Centre for Wind Energy Technology (C WET) has installed a network of 51 Automatic Solar Radiation Monitoring Stations in different states Project developers have to rely on satellite information from sources like NASA, NREL, etc Uncertainty surrounding the generation potential at site. Different solar radiation database yield varying estimates. The returns of a solar project are highly sensitive to radiation levels. Lack of adequate ground-mounted monitoring stations to validate satellite based estimates Radiation variability could significantly affect projected cash flows Challenges Faced currently Move towards building Solar Radiation Atlas
Lessons Learned : Scale of Projects 23 Solar projects are small compared to traditional power plants Lenders are reluctant to finance small transactions In cases where finance is available, transaction costs are higher Higher MW range of projects had to be promoted for using better evacuation infrastructure Government realising these challenges has considerably increased the size of solar PV projects allotted in phase I batch II of JNNSM From Batch I to Batch II, max capacity allotted to any developer has increased to 50 MW States following the cue, are also encouraging large scale development which would further bring in economies of scale. ParticularsMax Cap JNNSM Batch I Phase I Max 5 MW JNNSM Batch II Phase I Max 50 MW for one developer; each project of max 20 MW Karnataka10 MW Rajasthan10 MW MPNo upper Limit Gujarat25 MW Orissa Phase I & II25 MW Maximum Cap allotted to a developer for Solar PV Challenges faced due to size of Projects Steps taken to address the issue
SPV Challenge: The Grid Parity ? Or Grid Substitute / Support Socket Parity
25 Road to Grid Parity is Blocked by the High Cost of Financing in India Prohibitive cost of financing in India in terms of prevailing interest rates Long-tenure loans not available (15 years and more) with Indian banks. Stretches cash-flows during debt service period * Includes Hedging Cost NCDs = Non-convertible Debentures ECAs= External Commercial Borrowings ECA=Export credit agency l Mode of Solar Financing in India Source: World Bank * *
Roadmap to High Growth & Grid Parity Interest Subsidy / VGF for Solar Farm; Rs 15 L/ year/MW (for 5-years) Higher number of RECs for Older Plants World Class R&D Centre - High efficiency Solar cells; Reduction in BOS & Tracking system costs Capital Subsidy / Incentives for domestic PV Mfg projects – to offset interest & power costs Domestic Content & ADD support for 2-3 years Rs.5 / unit Every MW of Solar Power Plant create direct / indirect jobs: Solar Mfg : 20 Solar Farm Project : 65 O&M : 15 During : Potential 1,00,000 jobs Grid Parity – Reliable & affordable power - Empowerment of rural population