India is betting big on renewable energy and solar companies are taking notice. SunPower CEO Tom Werner said India is about to become the biggest market for solar energy, primarily because of Prime Minister Narendra Modi's interest in growing the sector. "The market that's going to boom is India," Werner told Business Insider. SunPower, the second biggest solar installer in the US, is owned by European oil giant Total. Modi wants to spend 210 billion rupees ($3.1 billion) on state aid for India's solar panel manufacturing industry to increase India's photovoltaic capacity and create an export industry, according to Bloomberg . Called the Prayas initiative, short for Pradhan Mantri Yojana for Augmenting Solar Manufacturing, the plan has not yet been made public. India's government plans to draw 40% of the country's energy from renewables by 2030. In India, where 300 million people aren't connected to the electrical grid, solar energy serves as an affordable way for Indians to produce their own power. In November, India built the world's largest solar plant that can produce enough energy to power roughly 150,000 homes. The Indian government's commitment to solar energy is why the country is likely to see the biggest growth in the near term, Werner said. SunPower has already partnered with Mahindra EPC , a solar subsidiary owned by Indian conglomerate Mahindra Group, to build a 5-megawatt solar plant in Rajasthan, India. The plant generates enough electricity to power 60,000 rural homes. Werner didn't disclose whether SunPower has any upcoming projects in India, but said the market will become increasingly more important in the future. SunPower isn't the only company taking note - Tesla is also eyeing India and could enter the market as early as this summer, CEO Elon Musk tweeted earlier in February. Tesla acquired SolarCity in a deal worth $2.1 billion in November and is continuing to expand its battery division .
MUMBAI: Intense competition in reverse auctions due to a limited supply of projects has pushed companies to bid lower to gain market share at the cost of margins. India's solar sector recently reached record low tariff levels in the auction conducted at the Rewa Solar Park in the state of Madhya Pradesh, according to a report by Mercom. India was among the first countries to adopt reverse auctions for solar projects since the inception of its national solar policy. The government's goal has been to procure solar power at the lowest price possible. When the first 150 MW of solar was tendered under the National Solar Mission (NSM) Batch-I in 2010, the average tariff quoted was Rs.12.16 (~$0.17)/kWh. Average tariffs have fallen by about 73% since 2010, almost in line with Chinese spot module prices, which have fallen by approximately 80% since 2010, Mercom said. In 2010, while the entire global solar market was about 17 GM, Indian solar installations were merely 18 MW. Highly competitive reverse auctions, falling module and component prices, the introduction of solar parks, lower borrowing costs, and the entry of large power conglomerates with strong balance sheets and access to cheaper capital, according the Mercom, have contributed to the dramatic fall in bids.
HYDERABAD: In order to save `41,000 crore on electricity energy bills over the next 10 years minister of railways Suresh Prabhakar Prabhu on Saturday said his ministry has drawn up Mission 41K by betting big on solar energy. Speaking at a function after commissioning various rail infra developmental works on South Central Railway from Hi-Tech city railway station, Prabhu said so far Railways had saved over `4,000 crore expenditure on power bills. “One of the strategies is to generate 1,000 MW of solar power in the next five years. Railway will go for solar power all over India,” the minister said. He said an amount of `1,729 crore has been granted as budgetary outlay for railway projects in the State which was an increase of 187 per cent over the average of previous two years. He declared 10 stations on SCR as Digital Payment enabled railway stations. The 10 stations include Secunderabad, Hyderabad, Vijayawada, Kakinada Town, Tirupati, Raichur, Guntur, Basar, Aurangabad and Nanded.
India has surpassed the 10 GW solar PV installation milestone, having tripled its capacity in less than three years, according to a late-night tweet on Friday from energy and mines minister Piyush Goyal.
Details on how the landmark was reached have yet to be released by the Ministry of New and Renewable Energy (MNRE), although local news outlets claim that the crossing was made when India’s largest utility NTPC commissioned another 45 MW of PV at Bhadla Solar Power project, near Jodhpur, in the state of Rajasthan. That project now stands at 160 MW in operation and NTPC has crossed the 500 MW mark with 520 MW solar commissioned.
India is working on a plan to make local manufacturing of solar power equipment competitive, attracting foreign investments. Solar power tariffs have declined sharply because of plunging prices of solar modules. Photo: Bloomberg
New Delhi: China’s largest solar equipment maker GCL-Poly Energy Holdings Ltd plans to invest in India, attracted by the nation’s emerging green economy.
As part of its India entry plan, GCL-Poly Energy Holdings Ltd is in talks with Subhash Chandra’s Essel Group to set up a solar module manufacturing facility. The Hong Kong-listed firm, which acquired bankrupt SunEdison’s solar material business last year, also plans to develop solar power projects in India.
“GCL-Poly plans to set up a solar power project platform in India. They are also in talks with Essel Group for setting up a module manufacturing facility. It makes sense as one would be able to control costs,” a person aware of the matter said on condition of anonymity.
India is working on a plan to make local manufacturing of solar power generation equipment competitive, attracting foreign investments. Solar power tariffs have declined sharply because of plunging prices of solar modules.
Modules account for nearly 60% of a solar power project’s total cost and their prices fell by about 26% in 2016 alone.
Essel Group has been in talks with the Chinese firm, confirmed another person, who also declined to be named.
Most solar power developers in India have been sourcing solar modules and equipment from countries such as China where they are cheaper. Domestic module makers include Waaree Energies Ltd, Tata Power Solar Systems Pvt. Ltd, Vikram Solar Pvt. Ltd and Adani Group.
New York-listed Trina Solar Ltd is the other Chinese firm that had evinced interest in setting up a solar equipment manufacturing plant in India.
Essel Infraprojects Ltd, an Essel Group firm, has a presence across sectors such as green energy, transportation, electricity transmission and distribution, and urban infrastructure.
Module prices are expected to extend their decline in 2017 as global supply exceeds demand.
“As the largest supplier and installer of solar modules, China will continue to drive global pricing. The country’s demand is expected to be up to 20% lower than in 2016—as against a record 34GW of installations in 2016, it is expected to add only about 28GW in 2017—putting downward pressure on prices,” consultancy Bridge to India wrote in a report earlier this month.
India’s solar power generation capacity has more than tripled to 10,000MW from 2,650MW as of 26 May 2014. Of the installed power generation capacity of 314,642MW, green energy accounts for 16%, or 50,018MW.
“I am in continuous dialogue with the manufacturers of solar equipment in India and I am happy to share with you that there is now quite a significant interest to set up solar manufacturing in India,” Piyush Goyal, Union minister for power, coal, mines and new and renewable energy, said last month.
India, the world’s third-largest energy consumer after the US and China, plans to set up 175GW of renewable energy capacity by 2022 as part of its global climate change commitments. Of this, 100GW is to come from solar.
Queries emailed to GCL-Poly Energy Holding on Monday evening remained unanswered. An Essel Infra spokesperson declined to comment in an emailed response.
Overseas investors such as Japan’s Mitsui Group, CDC Group Plc, France’s Total SA, State General Reserve Fund of Oman, UK Green Investment Bank Plc and Investment Corp. of Dubai have been looking to invest in India’s green energy sector.
India’s demand for renewable energy is expected to grow sevenfold by 2035, according to the latest edition of BP Energy Outlook. This means the share of renewable energy in the country’s fuel mix will increase from 2% to 8% by 2035.
India's solar power generation capacity has crossed 10,000 megawatt (Mw), a more than three-fold jump in less than three years, as government pushes for renewable energy sources to meet galloping demand.
The milestone came as NTPC Ltd, India's largest power producer, commissioned a 45 Mw solar power project at Bhadla in Jodhpur, Rajasthan.
"Bright Future: India has crossed 10,000 Mw of Solar power capacity today. More than 3 times increase in less than 3 years," Power, Coal, Mines, New & Renewable Energy Minister Piyush Goyal tweeted.
India solar power generation capacity stood at 2,650 Mw on May 26, 2014.
As much as 14,000 Mw (or 14 gigawatt) of solar projects are currently under development and about 6 GW is to be auctioned soon.
In 2016, about 4 Gw of solar capacity was added, the fastest pace till date.
According to power ministry estimates, another 8.8 Gw capacity is likely to be added in 2017, including about 1.1 Gw of rooftop solar installations.
Government is targeting 100 Gw of solar and 60 Gw of wind energy capacity by 2022. Total renewable energy generation capacity is envisaged at 175 Gw by 2022.
Earlier last month, lower capital expenditure and cheaper credit had pulled down solar tariff to a new low of Rs 2.97 per unit in an auction conducted for 750 Mw capacity in Rewa Solar Park in Madhya Pradesh.
The auction was conducted by a joint venture of Madhya Pradesh government and Solar Energy Corporation of India (SECI).
Last year in January, solar power tariff had dropped to a new low, with Finland-based energy firm Fortum Finnsurya Energy quoting Rs 4.34 a unit to bag the mandate to set up a 70-Mw solar plant under NTPC's Bhadla Solar Park tender.
In November 2015, the tariff had touched Rs 4.63 per unit following aggressive bidding by US-based SunEdison, the world's biggest developer of renewable energy power plants.
Canadian Solar Inc (NASDAQ:CSIQ) today said it secured power purchase agreements (PPAs) for an aggregate 80 MWac of solar power projects with the Solar Energy Corporation of India (SECI).
The solar module producer and project developer won these projects under a 450 MWac solar capacity tender in the state of Maharashtra.
Commissioning is expected by end of the year and the solar electricity produced will be sold to SECI over the next 25 years.
"This investment adds to our India pipeline that stands at 110 MWac and represents a significant milestone for Canadian Solar in one of world's fastest growing renewables markets," commented Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar.
India has made it clear that it can comply with the WTO ruling only prospectively for the sake of natural justice and the tenders already awarded. (Reuters)
Stark differences have cropped up in talks between India and the US on compliance with a World Trade Organisation (WTO) ruling last year that went against India for favouring local manufacturers in its solar power programme on a petition filed at the multilateral body by the world’s largest economy. Sources told FE that the US wants India to scrap all the tenders awarded under the latter’s national solar
mission and float them afresh so that more foreign players can participate.
However, India has made it clear that it can comply with the WTO ruling only prospectively for the sake of natural justice and the tenders already awarded (before its appeal against the ruling was rejected by the WTO in September last year) can’t be scrapped now. India has stressed that it has already complied with the ruling and stopped issuing solar tenders with domestic content requirement (DCR). According to an official estimate, about 500 MW of solar projects (with DCR stipulation), which were in the pipeline, have been affected by the WTO ruling.
However, there will be no changes in the terms and conditions for solar projects with about 3,000 MW of generation capacity for which tenders were awarded earlier and power purchase agreement with states signed, official sources said.
In a bid to promote local manufacturing, the government had earlier mandated that a certain portion of capacity addition would be reserved for domestically sourced modules under the national solar mission. The companies that use such modules are eligible for participating in the tariff-based bidding process.
India has now decided to promote its industry through measures that are compatible with or insulated from the purview of the WTO regulations. A senior official from the ministry of new and renewable energy said if the government becomes the owner of a project, instead of the developer, it is free to choose the equipment from domestic manufacturers. So the proposed schemes to set up 1,000 MW and 300 MW solar power projects by central public sector units and defence establishments, respectively, would be using domestically manufactured equipment.
Abhijit Das, head of the Centre for WTO Studies at the Indian Institute of Foreign Trade, said: “At this juncture, there are different ways by which India can comply and the US isn’t within its right to insist that compliance should be done in one particular manner.”
“After India has completed the compliance process, the US can seek (the setting up of) a compliance panel (at the WTO), if it so desires, to examine whether India has complied with the ruling or not,” he added.
Initially, as much as 50% of a solar project was earmarked for bidding under the DCR mechanism. Gradually, with the increase in volume of the schemes, the share of the DCR-mandated solar installations came down to 10-15% of the overall project size.
Pitching for government support for the domestic industry despite the WTO ruling, Gyanesh Chaudhary, chief executive of Vikram Solar, said: “To improve the solar scene, India has to compete with countries like China, the US and Japan that have their own highly efficient and battle tested supply chain backed by government support (financial and otherwise). So, despite Indian module manufacturing capability improving, claiming a significant portion in global solar market is still only a plan.” He said imported modules are still 8-10% cheaper than domestic modules.
In 2013, the US filed a complaint before the WTO, arguing that the domestic content requirement imposed under India’s solar programme violates global trading rules by unfavourably discriminating against imported solar cells and modules. In February 2016, a WTO panel ruled that by imposing the domestic content requirement India had violated its national treatment obligation. In September 2016, India lost an appeal at the WTO against the February ruling. US solar exports to India have fallen by more than 90% since India had brought in the DCR rules, the US had claimed.
The US move prompted India to point at violations of some of the WTO provisions by the US in the latter’s own renewable energy sector. Accordingly, India in September filed a complaint against the US at the WTO, arguing the states of Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota support their renewables sector with illegal subsidies and domestic content requirements. India has now asked a WTO panel to adjudicate on the matter after consultations with the US failed to resolve the matter amicably.
Analysts have said the attraction of India being a lucrative market for global solar power players is at the heart of the trade disputes between the two countries. India aims to sharply raise its solar power capacity to 100 GW by 2022 from just over 10 GW now.
India’s demand for renewable energy is expected to grow seven times by 2035, according to the latest edition of BP Energy Outlook. Photo: Bloomberg
New Delhi: Consulting firm Bridge to India has termed the recent low winning bids for solar power projects in India “unsustainable” and warned that “inadequate risk pricing poses a severe viability challenge for the sector”.
The warning comes after solar power developers last month bid as low as Rs2.97 per kilowatt hour (kWh) for a 750-megawatt (MW) project at Rewa in Madhya Pradesh. The winning bid offered a so-called levelized tariff—the value financially equivalent to different annual tariffs over the period of the power purchase agreement (PPA)—of around Rs3.30 per unit.
In a note titled Bidding behavior in the Indian solar sector not sustainable, Bridge to India noted that India allocated 12.6 gigawatt s from July 2015 to December 2016 to winners through a bid process. The tenders saw tariffs falling from Rs5.50-6.00 per kWh in mid-2015 to Rs3.29 per kWh in 2017.
“The average harmonized tariff of Rs4.31 (¢ 6.3)/kWh gives us an equity IRR (internal rate of return) of 14.20%, significantly below the benchmark expectation of 18%,” the report released on Monday said.
“This is a clear demonstration of aggressive bidding in the sector and we believe the developers are bridging the gap in two ways. First, by focusing relentlessly on optimization of technical and financial project parameters, they can push up IRR by 200-300 basis points. Second, the developers are making speculative favourable assumptions on future equipment prices, land sale values, debt refinancing, salvage value, etc., to defend project returns,” the report added.
India’s solar power generation capacity has increased by a third to 10,000 MW from 2,650 MW as of 26 May 2014. Of India’s installed power generation capacity of 314,642 MW, green energy accounts for 16%, or 50,018 MW.
“Low equity IRRs suggest that the Indian developers, in particular, are not pricing risks fully and too much faith is being placed on an optimistic future scenario,” the report said.
India, the world’s third-largest energy consumer after the US and China, plans to achieve 175 gigawatt (GW) of renewable energy capacity by 2022 as part of its global climate change commitments. Of this, 100 GW is to come from solar.
Experts agree with Bridge to India’s forewarning.
“Some of the recent prices we have seen are in the unsustainable zone. There are several risk factors such as foreign currency, capacity utilization factor as well as operations and maintenance cost escalation that can easily make the base assumptions go wrong,” said Abhishek Poddar, a partner at consulting firm A.T. Kearney Ltd.
Also, solar power tariffs have dipped because of plunging prices of solar modules. Module prices are expected to extend their drop in 2017 as global supply exceeds demand.
“Common perception is that auctions and increased competition are forcing developers to bid aggressively resulting in tariffs coming down so fast. But our analysis shows that changes in equipment costs and other factors are responsible for most of the decline. Adjusted for these changes, tariffs haven’t trended down in the last 18 months,” the report added.
India’s demand for renewable energy is expected to grow seven times by 2035, according to the latest edition of BP Energy Outlook. This means the share of renewable energy in the country’s fuel mix will increase from 2% to 8% by 2035.
The government has set an ambitious target to develop 175 gigawatt (GW) renewable energy by 2022, comprising 100GW solar, 60GW wind, 10GW biomass and 5GW small hydro projects. Of the total 100GW solar installation, 40GW would be rooftop and the balance 60GW would be ground-mounted utility scale. The Draft National Electricity Plan released recently by the Central Electricity Authority of India (CEA) has envisaged additional 1,00,000 MW renewable energy during 2022-27. Considering similar percentage of rooftop addition during 2022-27, it is expected that rooftop solar would be further added to about 24,000MW. Thus, the total rooftop installation until 2027 would be 64,000MW. This has become more crucial now, upon the ratification of the Paris Agreement.
The total solar installation in India currently is to the tune of 9,000 MW. Of this 9,000MW, rooftop installation is about 1,020MW, comprising 377MW industrial, 263MW commercial, 121MW government and 260MW residential. Most of the installation—853MW (85%)—was developed under the capex model, and the balance 15%, i.e, 167MW, was developed under the opex model. The target set by the government is about 1,500MW in FY17. The balance 38,500MW rooftop needs to be installed in the next 5-6 years, i.e, about 6,500MW per year.
Globally, rooftop installation has picked up or is picking up, as there is pressure on the availability of land. In fact, 40-50% of the total installation in many countries is rooftop (see accompanying chart). The lessons learnt are that soft loans, tax credits, the role of municipalities and market-based economy have yielded better results than the earlier policy of feed-in-tariff and direct capital subsidy.
It is estimated to be about 1,24,000MW. The urban settlement is about 77,370 sq km, with 38% residential, 4% commercial, 3% industrial and the balance 55% others. Taking into account the global experience, even if 30% of the total solar installation on residential/small commercial rooftop is considered, we need about 40 lakh residential/small commercial installations with an average 3kW solar installation per roof. Thus, one could well imagine the effort required to involve 4 million roofs, though it is merely 1.3% of the total 300 million houses existing in the country.
Recently, the government identified about 7,000MW rooftop installation on government and institutional buildings. About 500MW was tendered earlier and awarded. Another large tender of 1,000MW comprising 700MW opex model and 300MW capex model has been invited by the Solar Energy Corporation of India (SECI), with subsidy varying from 35% to 90%. To meet the gigantic task, residential/small commercial less than 10kW need to be involved on a large scale. However, various issues need to be addressed.
* Degradation of rooftop solar modules is higher than ground-mounted ones, as the cooling effect is better in the latter type. An initial study pointed out that rooftop installation degradation is as high as 2.5% per year, as against 0.6-0.8% on ground-mounted installation. A detailed survey needs to be carried out to further study the degradation pattern.
* To increase the rooftop penetration in the residential, commercial and industrial sectors, awareness must be brought to all the stakeholders, i.e. a ‘people’s movement’ through strong campaigning.
* There are lot of teething troubles in implementation, as it is an emerging area that needs to be streamlined, including net metering approvals, delays in approvals from discoms, large variation of solar penetration percentage in a feeder amongst various discoms, scientific determination through modelling/appropriate software in determination of percentage penetration of solar installations, etc. Then there is lack of clarity on responsibility of bearing the cost augmentation of distribution system due to solar rooftop installation. There is also a need for standardisation of installation methodology to minimise installation time and better cooling/lesser degradation and to reduce the cost. Other issues are liberalisation or waiving of inspections of small-size solar installations at consumer premises, waiving building height approvals from municipalities or authorities, capacity building of discom staff to handle emerging areas, and availability of pan-India skilled manpower in solar installation and O&M.
*Suitable quality control of solar module availability in the Indian market for easier access of good quality products by small customers.
*Easy access of finance for small solar installations is a critical success factor to enhance the penetration of rooftop. In addition to Capex models, third-party models such as Opex and lease model financial products must be introduced, like a home or a car loan, in a big way for smaller installations.
*A sustainable distribution tariff design must be developed by state regulators for discoms and solar generation installer, so that discoms work as a facilitator for higher penetration and not as a reluctant partner. For success, discoms should not land up in a utility spiral of losses as solar penetration increases. This is only possible if distribution tariff is made in two parts: as infrastructural charges and as energy charges, as solar energy is only replacing the other form of energy, not the infrastructure. To expedite rooftop solar addition and to have sustainable growth, the policy, regulatory, technical, social and financial issues need to be addressed at the earliest.
NEW DELHI: Green power is driving the growth in India's electricity generation as total installed solar capacity, including rooftop and off-grid projects, has crossed 10 gigawatts (gW), latest government and market data show.
Generation from conventional sources showed an annual growth rate of over 5% in the 11-month period of 2016-2017 financial year, while output from renewable power projects rose more than 26% during this period. Together, the total growth in generation is in excess of 6% from a year-ago period, government data show.
Power ministry officials say the net growth figure will be higher as generation data from renewable power projects come with a time lag, and therefore, does not reflect in the Central Electricity Authority's latest report The officials said the total generation this February showed marginal decline than the year-ago period due to the effect of 2016 being a leap year. A day's extra generation in February 2016 affected the February 2017 figure by 3.57%. Had February 2017 also had one extra day, the increase in electricity generation from conventional sources would have been 3.52%, the officials said. Market watchers see renewables continuing to carve a bigger space in the country's generation sphere on the back of the Narendra Modi government's funding push.
After coming to power in 2014, the government revised the target for renewables from 20 gW to 175 gW, including 100 gW of grid-connected solar projects, by 2022.
Under the original 100 GW solar capacity addition plan, 20GW was to come from solar parks and 40GW each from roof-top projects and distributed power projects
New Delhi: The government’s decision last month to double solar park capacity to 40,000 megawatts (MW) in three years has opened up a new business opportunity worth up to Rs20,000 crore for power transmission companies.
Adding new 50 ultra-mega solar parks to the 34 under construction in 21 states, as decided by the cabinet on 22 February, will need to significantly widen the green energy corridor—the transmission network for the solar parks—an official at Solar Energy Corp. of India, a state-owned company in charge of implementing various solar power projects, said.
The ongoing Rs13,000-crore green energy corridor-II project connecting the 34 parks under construction and new transmission projects will be identified keeping in mind the location of the new parks, said the official, requesting anonymity.
Transmission networks within the state where projects come up will be assigned to transmission utilities by the states, while inter-state projects will be assigned by the central government. Since construction of solar parks takes way less time than setting up a transmission corridor, transmission projects that need quick execution will be assigned to central or state transmission firms, while those for power plants that will come up at a later stage are likely to be auctioned as it affords sufficient time for a tariff-based bidding, an official in the power ministry said requesting anonymity.
According to I.S. Jha, chairman and managing director of Power Grid Corp. Ltd, which prepared the road map for the green energy corridor-II, not all the proposed new solar parks may come up at new locations and many could be in the solar and land resource rich states such as Madhya Pradesh, Rajasthan, Tamil Nadu and Gujarat, where such parks are already operating.
“The required additional transmission capacity may be a mix of inter-state and intra-state. In the case of a new solar park, generally, the cost of transmission comes to Rs50 lakh to Rs1 crore per MW, depending on location,” said Jha.
Under the green energy corridor project-II, 32 transmission projects—Rs8,041 crore of inter-state networks and Rs4,745 crore of intra-state network—are being constructed.
Under the original 100 gigawatt (GW) solar capacity addition plan, 20GW was to come from solar parks which needed high-end transmission network and 40GW each from roof-top projects and distributed power projects, both of which require very limited transmission network. This has now been recalibrated to provide for 40GW of solar park capacity, merging with it a part of the planned distributed solar capacity.
According to Reji Kumar Pillai, president and chief executive officer of India Smart Grid Forum, a public-private partnership of the power ministry, the real challenge of integrating renewable energy into the gird is in the roof-top segment. Integration of renewable energy into the low-voltage distribution grid is a major engineering challenge for power distributors, whereas transmission utilities are better-equipped to manage integration of MW-scale solar plants and wind farms connected at high voltage, he said.
Karnataka Solar Power Development Corp. has managed to acquire 12,000 acres of the 13,000 acres identified for the Pavagada solar park project, and related infrastructure work has started in earnest. Photo: Pradeep Gaur/Mint
Pavagada (Tumkur, Karnataka): Heat that can give you blisters. Fluoride contaminated water that can leave your bones brittle. Endless stretches of barren land where rains have stayed away for almost half a century. Thorny bushes the only vegetation in sight for miles.
An apt description of Pavagada—less than 200 km from Bengaluru, but it may as well be on another planet. The region is part of a large semi-arid tract in eastern Karnataka’s border district of Tumkur, which sits on an elevated plateau with several rocky hills all around. The state government has had to declare the region drought-hit 54 times in the last 60 years.
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The bone-dry region may be a bane for farmers, but could be a godsend for the state government which wants to experiment with something big—build what it claims is the world’s largest solar park.
The aim is to generate around 2700 megawatts (MW) from the Pavagada solar park by the end of 2018. The idea resonates with the centre’s ambitious scheme to generate 100 gigawatts (GW) of solar power by 2020.
Work has begun in right earnest on the project. Roads now cut through the vast expanse of sand. Scores of workers in hard hats and covered in dust are at work, putting up substations and power lines. The first phase capacity of 500MW has been bid out and generation is expected to start in the next four months.
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The park’s development is anchored by the Karnataka Solar Power Development Corp. Ltd (KSPDCL), an entity formed in March 2015 as a joint venture between Karnataka Renewable Energy Development Ltd (KREDL) and Solar Energy Corp. of India (SECI).
KSPDCL uses the “plug and play” model, under which it acquires and develops land as blocks for solar power generation, embedded with the required government approvals, and gives it out to solar power developers (SPDs) through auctions.
So far, plot allocation has been completed for 600 MW capacity. Six SPDs—Yarrow Infrastructure, Parampujya Solar Energy Pvt. Ltd, FortumFinnsurya Energy Pvt. Ltd, ACME Solar Holdings Pvt. Ltd, Tata Power Renewable Energy Ltd and Renew Power—have taken over land and commenced work.
The rest of the plots are in various stages of tendering.
The SPDs have, in turn, signed power purchase agreements with electricity supply companies or escoms. The agreements are drafted in such a way that the escoms get 90% of the power generated from the park, at a bundled tariff ranging between Rs3.50 and Rs4.50 a unit.
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KSPDCL has managed to acquire 12,000 acres of the 13,000 acres identified for the project, spread across five villages in Pavagada.
“It is a huge achievement. Land acquisition is a major challenge for any big project in India; especially for solar as around five acres of land is needed for 1 MW,” said Deepak Sriram Krishnan, manager of the energy department at World Resources Institute (India), a global non-governmental research organization.
G.V. Balram, managing director of Karnataka Renewable Energy Development Ltd (KREDL) and a Pavagada native, said that the credit for the smooth acquisition should go to the unique model deployed: the government did not acquire the land from farmers; it just sought to lease it for 25 years.
Balram said though farmers were emotionally attached to the land, they were happy to hand it over to a project if they could retain ownership. Farmers have so far not had an issue with the compensation amount—Rs21,000 per acre as lease, with a 5% appreciation every two years.
“Farmers have come to realise that it’s better if they don’t cultivate (the land). Anyway most of the time you don’t get enough rains to sustain the crops and invariably there is crop loss,” said Seshagiri Rao, a farmer and climate researcher who is a resident of a village in Pavagada.
But what will they do if they cannot farm?
“The impact is not that huge. Ten thousand acres is around five villages, so we are talking 5,000 families. I guess they will get jobs somewhere else. After all, we are talking about one of the most-arid regions in the country after Thar desert, where annual average rainfall is only 46 cm between June to November,” added Rao.
However, not everyone is happy. When Mint visited the region, villagers were upset with the government for not assuring power supply and jobs for them. Apparently, neighbours of what is touted as world’s largest solar power project are powerless.
Electricity is available for about three hours a day, though the voltage is too low to pump groundwater, complained many villagers.
State energy minister D.K. Shivakumar says that these issues will be looked at. “This taluk witnesses around 8,000-10,000 people leaving their villages to go work in Bengaluru and other places. We are trying to stop this. The government will make investments of over Rs15,000 crore in the region which will help create jobs.”
India wind power tariffs fell below Rs3.46 per kWh in the 1 GW SECI tender for which a reverse auction was conducted Thursday. Photo: Bloomberg
New Delhi: Wind power tariffs fell to a record low in a 1 gigawatt (GW) tender by state-run Solar Energy Corporation of India (SECI), potentially placing India at the tipping point on the renewable energy front. Solar power tariffs had hit new lows at an auction earlier this month. Mytrah Energy (India) Ltd, Singapore-based Sembcorp Industries and IDFC Alternatives-backed clean energy firm Green Infra Ltd, global private equity fund Actis Llp’s platform Ostro Kutch Wind Pvt. Ltd and Inox Wind Infrastructure Services Ltd bid Rs3.46 per kilowatt hour (kWh) to win contracts for 250 megawatts (MW) each, said several people aware of the development. These firms quoted the price at which they will sell electricity to win contracts under the tender that received demand for 2.6 times the grid-linked capacity being sold. Tariffs have hitherto ranged from Rs3.9 per kWh to Rs5.9 per kWh. “After solar cost reduction below Rs3/unit, wind power cost down to Rs3.46/unit through transparent auction. A green future awaits India,” said Piyush Goyal, minister for power, coal, mines and new and renewable energy, in a tweet. The bids come in the backdrop of solar power tariffs hitting a record low of Rs2.97 per kWh in an auction of contracts to develop the world’s largest solar power plant of 750 MW capacity in Rewa, Madhya Pradesh. India has set a target of generating 60GW of wind power by 2022, up from 28,700.44 MW at the end of December. The price is not an outlier, as was evident by the bids placed by Adani Green Energy (MP) Ltd, ReNew Power Ventures Pvt. Ltd and Gamesa Renewables Pvt. Ltd, which also bid low tariffs. “My own gut feeling was unless the prices come down, the demand may not be there for wind. And that’s exactly what happened,” Goyal said in an interview. The wind sector has been hit by inordinate delays in signing of power purchase agreements and untimely payments; distribution firms have shied away from procuring electricity generated by wind projects. The other firms participating in the auction included ReGen Powertech Pvt. Ltd, India’s first Formula 1 driver Narain Karthikeyan’s family-promoted Leap Green Energy Pvt. Ltd, Singapore-based Sembcorp Industries Ltd, Gamesa Renewable Pvt. Ltd, ReNew Power Ventures Pvt. Ltd, Hero Future Energies Ltd and RP-Sanjiv Goenka Group’s CESC Ltd. Experts termed the auction a game changer for the wind energy sector. “With the discovered tariff of Rs3.46, this auction will be disruptive for the wind industry. It will be interesting to see how banks, OEMs (original equipment manufacturers) and developers work together to commission these projects—at these tariffs, the projects will need to be delivered at a substantially lower project cost to ensure viability. Also, this tariff should not be considered as a benchmark in lower wind regime states. Overall, this is a positive development as this brings competition and transparency in the sector,” said Srishti Ahuja, director at consulting firm EY. The government plans to achieve 175 GW of renewable energy capacity by 2022 as part of its commitments to the Paris climate change agreement. “The level of participation in the recent solar and wind auctions point to the coming of age of the industry. The auctions have been hard fought and have led to tighter pricing than one would have foreseen even a few months earlier. This speaks to the growing confidence of the players in their ability to deliver projects on terms that are globally competitive,” said Vikram Kailas, managing director and chief executive officer of Mytrah Energy in an emailed statement. The price gap between electricity generated from thermal, solar and wind projects has been narrowing. This is primarily due to costs of solar modules and wind turbine generators falling by 80% and 20%, respectively, over the past five years
Power minister Piyush Goyal. India had solar capacity of 9,012.69MW as of 31 December 2016. Photo: Ramesh Pathania/Mint
New Delhi: The government on Wednesday announced an ambitious scheme to double solar power generation capacity under the solar parks scheme to 40,000 megawatts (MW) by fiscal 2020. The centre proposes to extend Rs8,100 crore in assistance to fund 30% of the initial project cost of developers. India had solar capacity of 9,012.69MW as of 31 December. The move, which comes in the backdrop of solar power tariffs hitting a record low of Rs2.97 per kilowatt-hour (kWh), is an important step in creating an ecosystem which will enable the scaling of solar power in the country to achieve the target of generating 100GW of solar power by 2022. This is because a solar park will provide the building blocks—land and grid connectivity—to set up big solar projects. These parks will be set up in partnership with Solar Energy Corporation of India (SECI) and the state governments. The cabinet committee on economic affairs (CCEA) chaired by Prime Minister Narendra Modi approved the scheme, which will lead to setting up of 50 solar parks with capacity of at least 500MW each or more across the country by 2019-20, said Piyush Goyal, Union minister for power, coal, new and renewable energy and mines, at a media briefing. To be sure, finance minister Arun Jaitley had, in his 2017-18 budget, proposed the additional 20,000MW under the ambitious solar park programme. In another decision, CCEA cleared a Rs5,723.72 crore investment by state-owned SJVN Ltd to revive the 900MW stalled hydroelectric project on the Arun river in eastern Nepal. Once the project is completed in about 60 months, Nepal will get 21.9% of the power free of cost and the rest will be transported from Dhalkebar in Nepal to Muzaffarpur in Bihar. Goyal said the project will also strengthen ties with Nepal and generate employment to 3,000 people in both countries. Hydroelectric power is seen as a source of power that is vital for maintaining the stability of the grid as the share of renewable sources of power, which are susceptible to weather conditions, is increasing in the grid. Solar power tariff hit an all-time low of Rs3.3-3.309 per kWh—the levelized tariff—for the 750MW project offered by Rewa Ultra Mega Solar Ltd in Madhya Pradesh earlier this month. Winning bidders managed to keep the tariff low with the help of state-offered land and payment guarantee and by keeping the hedging cost low on foreign borrowings. State governments keen on solar parks will allocate land for the project and nominate a project developer to the central government, which in turn will grant Rs25 lakh to the developer for preparing a detailed project report and financial assistance of Rs20 lakh per MW or 30% of the project cost, whichever is lower. The proposed capacity will generate 64 billion units of electricity per year and will help reduce 55 million tonnes of carbon dioxide over the projects’ life cycle, said an official statement. "Doubling of solar park capacity demonstrates India’s commitment to a better future for the next generation and to fight the adverse effects of climate change."- Piyush Goyal, minister for power, coal, new and renewable energy resources and mines Under the first phase of the solar parks scheme introduced in 2014, 34 projects with capacity of 20,000MW are in various stages of implementation. Santosh Kamath, partner and head of renewables, KPMG in India, said, “The incentive scheme will help developers lower the cost of infrastructure and thus address risks related to infrastructure creation for solar projects. This will help reduce cost of solar power.” Goyal said the government will promote setting up rooftop solar plants at sports stadia and also bring out a policy to encourage local production of every equipment used in the solar power industry. The government is also keen to promote micro-grids to reach power to remote areas. “The Prime Minister discussed at length promoting distributed power generation, which will make farmers self-sufficient and producers of electricity. This will improve their efficiency and promote clean energy in interiors of the country,” said Goyal
In India, which is the biggest greenhouse gas emitter after the US and China, renewable energy currently accounts for 15%, or 45,917 MW, of the total installed capacity of 3,10,005 MW. Photo: Reuters
New Delhi: India’s solar power sector has turned a corner after the record low-winning bids of Rs2.97 per kilowatt-hour (kWh) to build 750 mega watt (MW) plant at Rewa in Madhya Pradesh (MP) on Friday.
With effective levelized tariff—the value financially equivalent to different annual tariffs over the 25 year period of the power purchase agreement—of around Rs3.30 per unit, the power from sun has become a competitive energy source vis-à-vis the coal-fuelled conventional source of electricity.
The conversation has also moved from subsidy or the viability gap funding (VGF) being used to help bring the tariffs down as was demonstrated by the MP bids, as pointed out by Manu Shrivastava, managing director, Madhya Pradesh Urja Vikas Nigam Ltd (MPUVNL) in an interview to Mint.
The bids were called by Rewa Ultra Mega Power Ltd, a joint venture of Solar Energy Corp. of India Ltd (SECI) and MPUVNL.
The issue also assumes importance given India’s commitments within the United Nations Framework Convention on Climate Change and the country receiving solar radiation of 5 to 7 kWh per sq. m for 300-330 days in a year.
A quick tariff comparison with conventional fuel sources such as coal drives home the point about solar energy no longer being a green fad but a game changer in India’s energy mix. A case in point being state-run NTPC Ltd; India’s largest power generation utility, which supplies electricity from coal fuelled power projects at Rs3.20 a unit. Also, according to Bridge to India, a solar energy consulting firm, successful bids for new thermal power plants in India in the past two years have been between Rs3.93 and Rs 4.98 per kWh.
“No one expected a tariff of Rs2.97 per unit for the Rewa project…As compared to US¢ 4.4/kWh, the tariffs bid in West Asia have been as low as US¢ 3/kWh. This is primarily due to low cost of financing there,” added Sanjeev Aggarwal, managing director and chief executive of Amplus Energy Solutions Pvt. Ltd, which has offered to sell rooftop solar power at a record-low tariff of Rs3 per unit.
To be sure, Amplus Solar’s tariff has a 70% subsidy component.
It couldn’t be a worse time for the coal-fuelled power plants in the country as India’s current installed capacity of 3,10,005 MW and the projects under construction are expected to meet the country’s electricity demand till 2026. This effectively means that there will be no requirement for coal fuelled power plants in the country till then.
“The (TERI) report estimates that no new investments are likely to be made in coal-based power generation in the years prior to that,” said TERI, a New Delhi-based think tank working on environment issues in a statement on Monday.
In India, which is the biggest greenhouse gas emitter after the US and China, renewable energy currently accounts for 15%, or 45,917 MW, of the total installed capacity of 3,10,005 MW. Of this, solar capacity was 9,012.69 MW as of 31 December 2016 with coal fuelled power projects accounting for around 61% of the country’s installed capacity.
“The TERI report also estimates that beyond 2023-24, new power generation capacity could be all renewables, based on cost competitiveness of renewables as well as the ability of the grid to absorb large amounts of renewable energy together with battery-based balancing power,” the TERI statement added.
India’s demand for renewable energy is expected to grow seven times by 2035, according to the latest edition of BP Energy Outlook. This means the share of renewable energy in the country’s fuel mix will increase from 2% to 8% by 2035.
The trigger for acceptability of solar power has been its falling tariffs due to the lower cost of raising finances, and the solar module prices taking a nose dive. Solar tariffs declined from Rs10.95-12.76 per kwh during the 2011 financial year to Rs4.34 per kwh last year.
“Most of this fall can be attributed to lower equipment cost (solar module prices have fallen by 26% in the last year) and an improved contractual structure,” Bridge to India said in a 13 February statement.
Some believe that the solar power tariffs may fall further.
MPUVNL’s Shrivastava suggested the possibility of tariffs falling further as the state government makes improvement to its future tender conditions. This in turn could trigger similar steps by the other states.
While overseas investors such as State General Reserve Fund of Oman, UK Green Investment Bank Plc, Investment Corp. of Dubai, Norway’s Statoil ASA, France’s Total SA and Royal Dutch Shell Plc. have been showing interest in the Indian renewable energy market, concerns over grid stability remain with solar being an intermittent electricity supply source.
The danger is real and present given India’s worst blackout in 2012 which left nearly 620 million people without electricity. On 31 July, the northern grid collapsed, and on 1 August, in a wider blackout, the northern, eastern and north-eastern grids broke down.
Experts believe the technological breakthrough that Indian solar energy sector awaits is commercially viable energy storage solutions which will also help towards grid stability.
The Indian government has confirmed that it will go ahead with a second phase of its solar power park program.
The announcement was made by the Minister of Finance in the union budget speech for financial year 2017-18. India will increase the planned capacity addition under its solar power park program from 20 gigawatts to 40 gigawatts.
The Ministry of New and Renewable Energy, along with the Solar Energy Corporation of India, has already identified several solar power projects with cumulative capacity of 20 gigawatts. Under the second phase an additional 20 gigawatts capacity will be added.
While the existing solar power park program has been expanded, the overall installed capacity target remains the same at 100 gigawatts by March 2022.
This could essentially mean that the government recognizes that the planned capacity addition of 40 gigawatts under the rooftop solar segment may be too large of a target.
Recent auctions for solar power parks have received a huge response, with tariff bids falling sharply nearly each time.
Distribution utilities remain unprepared for rooftop solar power systems and consumers also seem unaware about the benefits of the such power systems.
Large-scale solar power parks, on the other hand, have numerous advantages, including low cost, large generation potential, and one-time investment in power generation infrastructure.
India just made a huge commitment to solar power. They’re doubling the planned capacity in their solar parks program from 20 gigawatts (GW) up to 40 GW. The government has also given a green light to the program’s second phase.
India Minister of Finance Arun Jaitley said the government will move forward with the solar parks program’s second phase in a union budget speech. According to CleanTechnica the government’s Ministry of New and Renewable Energy (MNRE) has identified multiple solar energy projects that possess a cumulative capacity of 20 GW, and will add an extra 20 GW of capacity under the second phase.
Solar parks could be a huge win for India. CleanTechnica reports it seems many consumers aren’t aware of the benefits of rooftop solar, but also utilities aren’t well equipped to handle rooftop systems. But the government seems to recognize solar energy could be a perfect fit for the growing country that needs a renewable source of energy and also enjoys around 300 days of sunshine yearly.
According to a 2014 MNRE document titled Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects, “Solar power projects can be set up anywhere in the country, however the scattering of solar power projects leads to higher project cost per MW and higher transmission losses…The solar park is a concentrated zone of development of solar power generation projects, by providing to developers an area that is well characterized, properly infra-structured, and where the risk of the projects can be minimized as well as the facilitation of the permitting process.”
According to The Indian Express, the government has approved 33 solar parks in 21 states. CleanTechnica notes while the government has expanded the current solar parks program, the target for overall installed capacity by March 2022 in India is still the same at 100 GW.
Captain Rajesh Bargoti, commanding officer of INS Sarvekshak along with commander Sreejith Thampi, electrical officer looking at the solar panel installed onboard the ship in Kochi on Saturday. (TOI Photo)
INS Sarvekshak has been fitted with 18 sheets of solar panels atop its hangar.
The 300-watt panels generate about 5.4kW power.
Commanding officer of the ship said they were already noting down meter reading of solar power consumption so as to look at using solar power for more devices.
KOCHI: For the first time in the country, solar panels have been installed on an Indian warship.
The survey class vessel INS Sarvekshak, attached with the southern naval command, has been fitted with 18 sheets of solar panels atop its hangar. "It took about six months to put the entire system in place. We are now using solar energy for lights and a couple of air conditioners," said Captain Rajesh Bargoti, commanding officer of the ship. The 300-watt panels generate about 5.4kW power.
Bargoti said one of the challenges faced by the project was that marine environments were not suitable for normal solar panels, as saline and humid surroundings would damage it. "Also, the wind speed can affect the panels, which may get uprooted while at sea. So, we had to look at flexible panels that had anti-rust properties, were marine compatible, could withstand high wind speeds, perform on flat installations and had very low weight," he explained.
"We have 10 batteries which are used for storage. So, we have been using only solar power for the purpose of lighting during sail. When we are anchored, we use power supplied by the state electricity board and not diesel," said electrical engineer Commander Sreejith Thampi.
He added that they were already noting down meter reading of solar power consumption so as to carry out a power audit and look at using solar power for more devices.
Prime Minister Narendra Modi had appreciated the innovation when the project was put on display at the exhibition organised by the Navy headquarters.
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NEW DELHI: Solar power tariffs in India have found a new floor at Rs 2.97 per unit, sinking below the average cost of Rs 3 for electricity supplied by state-run generation utility NTPC from its coal-fired plant.
The record low tariff was quoted by the Mumbai-based real estate developer, for the first unit of the 750 MW Rewa solar park in Madhya Pradesh, the bidding for which closed on Friday.
"India marches on towards realising the clean energy vision of Hon'ble PM Narendra Modi," power minister Piyush Goyal tweeted at the close of bidding.
The quoted tariff is for the first year of the project, which has three units of 250 MW each. The project, however, envisages an annual escalation of 5 paise for 15 years and 33 paise is to be added for levelised tariff.
Levelised tariff in the power sector essentially refers to the average fixed and variable components of tariff over the entire term of the sale agreement, adjusted for inflation.
The quotes by winners of other two units had only fractional difference. German group Solenberg's quote of Rs 2.974 for the third unit was the next lowest, while the Mahindra group won the second unit by quoting Rs 2.979 per unit.
The project is to be completed in 18 months of signing agreements and will supply 80% of the generated power to the state and remaining 20% to Delhi Metro Rail Corporation under a 25-year agreement.
Solar power tariffs have been falling in the last two years due to the Narendra Modi government's thrust on raising India's green energy footprint and reduce oil imports by 10% by 2030.
After coming to power in 2014, the Modi government metamorphosed the UPA's National Solar Mission by setting a target of building 175 giga watt of green energy capacity by 2030.
As reported by TOI, solar tariffs had sunk to Rs 3 per unit Gurgaon-based Amplus Energy Solutions in the auctions conducted by Solar Energy Corporation of India for a clutch of rooftop solar power projects.
Till then rhe solar project at Badhla in Rajasthan held the record for the lowest tariff at Rs 4 per unit in the solar park category. The lowest tariff before that was Rs 4.34 per unit, quoted by Fortum India in January 2016 for one of the six packets of 70 MW (420 MW total) each bid out by state-run generation utility NTPC for an earlier phase of the Bhadla project.