New gold rush
India is on a mission. To drastically ramp up its solar power production to 22,000 MW by 2022.
From steel makers and automobile manufacturers to diamond merchants and realtors everyone sees the Jawaharlal Nehru National Solar Mission as their chance to strike gold.
But it is not so easy. The first phase of the solar mission focuses on producing 1,000 MW. To be precise in the first year of the mission, only 150 MW of capacity would be added. There is little scope for power producers to build large plants that feed electricity into the grid. Technology is another challenge. Indian solar equipment makers still cannot match the best in the world. In 16 years India wants to reduce the cost of solar power to that of coal. This can happen only by promoting research and competition, says Arnab Pratim Dutta
Quality is the key
Deepak Puri, Chairman and Managing Director, Moser Baer
The national solar mission gets Deepak Puri excited. It widens avenues for his multi-technology company Moser Baer. But he has a word of caution. The government should verify the antecedents of the companies it selects. Else it could become a tax-break haven like the wind energy industry that attracted high net-worth individuals like Bollywood personalities. “They were not interested in wind energy but the 80 per cent tax break the new technology promised,” said Puri sitting at Moser Baer’s plush headquarters in Delhi’s Okhla Industrial Estate. “We know today that many of the contractors, who took on the assignment to build and operate the plants, used poor quality equipment and disappeared. Solar must not fall into this trap.”
Puri cites the example of Europe, where he does more than half his business—Moser Baer sells 40 per cent of the solar panels it makes domestically and the rest is exported. In Europe insurance companies become liable if solar farms do not meet performance parameters. Without quality controls, India could become a dump for rejected solar technology, he warned. Puri recalled a meeting with a senior official of a computer chip making company 15 years ago. “We got talking and I asked him, ‘What happens to the rejected chips?’ He calmly replied, ‘You Indians are the biggest buyers of the rejected chips’,” he said. That’s why he wants India to build and buy Indian.
He is optimistic about the solar business. “We have set up a 1-MW plant for Mahagenco in Chandrapur in Maharashtra in record six months, and we are looking to set up another 5-MW plant in home minister P Chidambaram’s constituency in Shivaganga in Tamil Nadu,” he said. Puri said Moser Baer’s solar cell and module (an array of cells) making business is distinct from the arm that builds solar farms.
From sun to the grid
Inderpreet Wadhwa, CEO, Azure Power
A few clouds on a hot sunny day can bring a great deal of relief. But for Inderpreet Wadhwa it means a loss of business. “A hot and sunny day is perfect for my business,” he said, standing beside his black Mercedes, staring at solar panels spread like a carpet a few feet above. In December 2009, Wadhwa became the first private solar electricity producer to feed the grid.
The power plant is at a village called Awan, about 40 km from Amritsar. It is a spartan unit comprising a solar field and a power block connected to the Ramdas electricity substation a few kilometres away. The solar field has about 3,500 photovoltaic panels that can generate 280 Watt under ideal conditions. These were bought from a Chinese vendor, Q-tec, and feed into the power block. The block is a single-room unit that has two inverters made by a German company called sma. No fancy computers monitor the work. He does it using an I-Phone. A small gadget called the Sunny Box and a mobile sim card relay generation figures to any computer or smart phone anywhere on the planet every five minutes.
When Wadhwa returned from the US in 2007, after delving into software consultancy, solar was just beginning to emerge as a potential source of energy for India, he said. Azure Power has already produced about 750,000 units of power; enough to light 2,000 rural homes for six months. It has a rated capacity of producing 1 MW. The future, he said, is all about maximizing the efficiency of the solar plants. Wadhwa wants to add another one-MW solar field. His company has big plans: expansion of the Amritsar plant to 2 MW, a joint venture with SunEdison for a 15-MW plant in Gujarat.
Head of the newly set up Solar Independent Power Producers Association, Wadhwa believes big change will come when the government allows private power companies to supply directly to rural consumers. This mini-grid with pre-paid cards for power purchase will change the energy futures.
K K Sharma, Vice-President, corporate engineering, Omax
Omax, an automobile parts making company in Delhi’s satellite city Gurgaon, has built a small solar power plant. It took just three months. The roof of the plant at Manesar near Gurgaon is chock-a-block with 476 solar panels, which can generate up to 100 kW. Power failures are chronic in Manesar and the new system will save about 20,000 litres of diesel spent every year on running a generator. “The roof-top system will contribute 7-8 per cent of the electricity we require,” said K K Sharma, vice-president, Omax.
The company spent about Rs 2 crore on the plant. It hopes to get Rs 75 lakh reimbursed once a new scheme of the Ministry of New and Renewable Energy to subsidize solar-power generation from roof-tops is in place. The company has also set up a twin system at its Dharuhera facility about 50 km from Manesar. The plant uses thin film solar modules made by Moser Baer. The twin plants are the first roof-top solar power systems in the automobile industry in India.
Crowd at the gate
The three-phase Jawaharlal Nehru National Solar Mission has set up an ambitious roadmap: 22,000 MW of solar power by 2022.
The clock is ticking fast for the first phase. By 2012-13, grid-connected plants supplying 1,000 MW, rooftop and small plants producing 100 MW and off-grid applications generating 200 MW have to be up and running. The mission requires drastically ramping up solar energy production in India from the current 8-12 MW of installed capacity (see: Top four solar plants). But technology, cost and operational challenges are not easy to overcome.
The solar mission has evolved an innovative mechanism to fund this expensive power. The government directed the National Thermal Power Corporation’s (ntpc) trading subsidiary, the National Vidyut Vyapar Nigam (nvvn), to bundle the expensive solar power with the cheaper unallocated quota of thermal power. So with one unit of solar at a higher tariff (roughly Rs 18) bundled with four units of cheaper conventional energy (Rs 2 per unit), the power utility pays about Rs 5 per unit.
The programme is stuck because of its success. Too many people have applied for setting up solar projects. The Ministry of New and Renewable Energy says it faces two challenges. One, to provide a level-playing field for the newer sola-thermal projects to compete with the more established photovoltaic technology. After much deliberation it agreed on dividing power targets equally between the two technologies. Two, it wants to avoid too many projects queuing up before financial institutions. The ministry has proposed selecting projects in three steps. In the first step it will ‘migrate’ a portfolio of existing projects to this scheme. In the next step it will target only 150 MW by 2010-11.
The ministry says migrating the existing solar projects will quicken the pace. Officials, who did not want to be named, told Down To Earth (dte) they received proposals for over 700 MW for migration, and have narrowed down the list to eight to 10 projects, adding up to 100 MW. The final list would be out by June-end. But the rush by solar developers has led to delays. Although government sources insist migration is on schedule and they are only awaiting legal opinion on the process, the industry says projects and states that have been left out are disputing the migration list.
While officials are tightlipped about the selected projects, sources told dte that projects in Rajasthan add up to 66 MW and the rest are projects sanctioned under the ministry’s 50-MW generation-based incentive scheme introduced in 2007.
As far as meeting the 150 MW target is concerned, the government is confused what should be the maximum capacity allotted to a developer and how many promoters should be selected. The industry, which had planned projects between 1 MW and 30 MW, is worried because officials say the maximum capacity allotted could be 5 MW.
The government is swamped by applications and says it has little to allocate. It is now considering reverse auction, where project proponents shortlisted based on their net worth will be asked to state the cheapest rate at which they can supply solar energy. Proponents fear this approach could see big players underbid, which would lead to unfeasible projects. One developer told dte that solar giant Moser Baer has quoted Rs 8 per unit in Punjab against the published tariff of Rs 17.90.
The Gujarat government has moved fast to sign solar deals. As of January 2009, it had signed 34 agreements for solar projects. Fewer fructified. As of May 2010, it had signed power purchase agreements with 15 photovoltaic projects and two solar-thermal companies totalling 195 MW. The state has set its own tariff for solar photovoltaic: Rs 13 per unit for the first 12 years and Rs 3 per unit for the last 13 years. This includes accelerated depreciation adding Rs 2 per unit to the tariff. The state is aggressively earmarking land for solar projects leading to a mad rush of developers for a place under the Gujarat sun. It is also assuring projects, especially solar-thermal, access to the Narmada water. Surendranagar, Kachchh and Patan districts are the most favoured. On September 2009, the state signed an agreement with the US-based Clinton Foundation for a 3,000-MW solar park.
The conference room on the fourth floor of the Chandralok building on Delhi’s Janpath road was filled to capacity on February 10. The Central Electricity Regulatory Commission was holding a public hearing to finalize tariffs for solar projects under the national solar mission. Everyone in the solar business who counts was present.
The commission had to hear 52 submissions, oral and written, before deciding whether to revise its tariffs set last year for the two commercially used solar technologies—Rs 18.40 per unit for solar-photovoltaic (PV) and Rs 13.50 per unit for projects using the nascent solar-thermal technology. This tariff assumed capital cost to be Rs 17 crore per MW for solar-PV and Rs 13 crore per MW for solar-thermal. The solar-thermal group at the meeting wanted costs revised sharply upwards.
In case of solar-thermal, companies presented a range of estimates. Coal giant ntpc, which plans to generate 250 MW of solar-thermal power, pegged the cost at Rs 25 crore per MW. Acme, SunBorne Energy and Entegra proposed between Rs 16 crore (without energy storage) and Rs 17.70 crore per MW (with energy storage). Tata Power estimated the capital cost at Rs 20-22 crore per MW, while Spanish thermal major Abengoa wanted Rs 28 crore.
India’s first and only solar thermal developer with a power purchase agreement, Dhruv Batra of Cargo Power and Infrastructure, explained that costs are unclear because this technology is still developing in India. Vijay Lakhanpal, chief operating officer of the Forum for Advancement of Solar Thermal, said the cost of the thermal system will also differ with technologies used in building solar-thermal.
Tower and Dish-Sterling systems can give better efficiency at a lower cost but they are yet to be commercially proven. Parabolic troughs may be more expensive but they also have more commercial success, he said.
The three-member commission noted that roughly half the cost of setting up a solar-thermal unit is for the solar field. Equipment needed for the solar field—like concentrating mirrors and receiving tubes—are not made in India. But there are options for indigenization and cost efficiency in building the power block.
After considering the estimates the commission decided to benchmark capital costs of solar-thermal at Rs 15.30 crore per MW for projects signed on or before March 31, 2011, and commissioned by March 31, 2013.
The solar PV lobby is more experienced in cost estimates. Its aim was to explain the components. Land was the most contentious of all projected costs. The requirement of land is roughly five acre (2.2 ha) per MW of power generated. The commission had estimated land at Rs 1 lakh per acre. Developers said this was too low because projects have to be close to grid substations where land is expensive. The commission agreed to revise rates to Rs 3 lakh per acre.
PV modules, consisting of solar cells, constitute roughly 60 per cent of the total cost. The commission had fixed their cost at US $2 per Watt-peak (Wp), that is under ideal conditions. At current exchange rate this translates to Rs 9.15 crore. Tata-BP Solar said the cost of solar modules, backed by a 25-year warranty and with 86 per cent power availability at the end of the 25th year, would be US $2.2 per Wp. Now, modules can be crystalline or thin film. The commission observed the cost of crystalline-PV modules varies considerably. Thin-film PV modules are cheaper but also have lower efficiency. It fixed the cost of a PV module at US $2.2 per Wp. The commission then considered other costs—like that of mounting structures and the power conditioning unit—to arrive at the final capital cost of Rs 16.90 crore per MW for projects cleared in 2010-11.
In end-April, the commission revised tariffs. It reduced the solar-PV tariff to Rs 17.91 per unit and increased the solar-thermal to Rs 15.31 per unit. Solar experts say the PV group now faces the challenge of cutting costs, while improving efficiency. They also caution that the capital cost and tariff for the next big thing, solar-thermal, is much lower than costs abroad. Clearly, much more is needed to learn the cost-technology equation in the solar market.
Made in India orÃ”Ã‡Âª
Two key objectives of the national solar mission are to bring down costs and to build a strong domestic manufacturing industry for solar equipments.
In late 2009, the government set up a committee under the then secretary of the Department of Industrial Policy and Promotion, Ajay Shankar, to recommend the way ahead. The committee presented its report in February 2010. It is under discussion.
The manufacturing industry has welcomed the report’s key recommendations. “India has the capacity to make over 600 MW PV panels and cells annually,” said Jagat S Jawa, director general of the Solar Energy Society of India, the Indian wing of the International Solar Energy Society. “Till date the industry has exported about 65 per cent of its production but this report will provide ways to use it within India,” he added.
The committee’s recommendations rests on the cornerstone that using only made-in-India products in critical components of solar-power projects would infuse capital into the industry, jump-start new research and ultimately lead to cheaper but better components. This preferential treatment will be time-bound till manufacturers reach an even keel with international giants. The committee reasoned that favouring local equipments would also lead to international manufacturers setting up base in India.
It recommended that only cells and modules made in India should be used in solar-PV plants connected to the grid in the first phase of the solar mission, that is by 2010-2013. All solar installations should use India-made power-conditioning units between 2012 and 2013. At present, wafers and silicons are not made in India. The committee suggested in 2013-2014 the government should review whether the two components made in India could be used.
For solar thermal plants, the committee noted that technology is still new and emerging, so the requirement for domestic content must be small. It recommended a threshold of 30 per cent for localized content in the first year of the mission. The limit could be rapidly scaled up to 50 per cent and above as technology and industry mature.
The committee heard representations from stakeholders. PV makers submitted that Indian producers were using imported solar panels, even though sufficient quality panels are made in the country. The industry claimed the solar mission provided significant subsidies, which should be directed towards the domestic industry so that it generates employment and adds value.
Indian trade laws also discourage production of solar cells domestically. A 12.8 per cent duty is imposed on importing raw material for making cells, whereas there is no duty on importing readymade modules. Inverters that convert direct current from the solar panel to transmission-able alternate current attracts a duty of 21.5 per cent. Currently India does not produce any inverters but imports them.
Deepak Puri, chairman of multi-technology firm Moser Baer, proposed the government allow use of only India-made solar cells and modules for a few years; this would infuse the much-needed money into R&D. Puri said importing panels compromises quality. “Due to strict quality parameters in Europe, a lot of modules are rejected. These may find their way into India,” he said.
Independent solar power producers have a different take on this. For the first phase, the government should let power producers decide whether they want to import or buy local modules, said Inderpreet Wadhwa, president of the Solar Independent Power Producers Association and ceo of Azure Power. “The power producer should be able to customize his solar farm by deciding the size of the panel, the tolerance and efficiency factor and costs,” he said. Wadhwa is using Chinese 280 Wp panels in his solar farm in Amritsar with a power tolerance factor of +5, which means power production can exceed by 5 per cent. In India manufacturers restrict panel size to 230 Wp; these panels have a tolerance factor of +5 or -5. “With higher tolerance, I get more from the same panel,” Wadhwa said.
Making domestic content mandatory could lead to monopolistic markets, which do not worry about improving technology and reducing cost, warned Wadhwa. He said for his projects in Haryana and Gujarat, Indian firms have quoted higher prices than foreign ones.
India does not have the requisite conditions for quality control and certification—for domestic as well as imported products. So concerns are growing about China ‘dumping’ substandard solar cells and modules. But with mandated markets, Indian industry could end up supplying components with poor efficiency at high prices.
Jeffrey Grossman, an associate professor of power engineering at mit, is playing with the Japanese art from origami. He is not an artist but is developing new shapes for solar modules made of solar cells, the key component converting sun rays into electricity. Grossman has also taken inspiration from biological evolution and developed a 54-W module two-and-a-half times more efficient than conventional ones.
Companies and researchers are thinking of ways to efficiently harness solar power. Their aim is to achieve grid parity and beat cheap coal-based power. India also wants to achieve grid parity by 2020, and it hopes to bring down the cost of solar power by 2026 to that of coal. For that technology will need to leapfrog. The first phase of the national solar mission will only experiment with technology. “Only for the second and third phase will the government draw a strategy to reduce the cost of producing solar power,” said an official of the Ministry of New and Renewable Energy.
More than 90 per cent of solar installations in India use crystalline cells made of silicon wafers, but in India the efficiency of crystalline cells is 12-18 per cent. According to the ministry, the highest efficiency in converting solar energy to electrical achieved by an Indian company is 19.7 per cent. The technology, developed by the government-owned Central Electrical Laboratories in Ghaziabad, is not commercially available. International companies are commercially producing solar cells with over 19 per cent efficiency. Chinese manufacturer Suntech is selling cells with an electricity conversion rate of 19.2 per cent. Another photovoltaic module maker Sunpower of the US has commercially made available cells with 20.4 per cent efficiency.
But the future may not lie in silicon. One of the most promising technologies is multi-junction cells comprising several layers of semiconductors. Unlike single-layer crystalline silicon cells, which catch a fraction of the spectrum of the sunlight, their layers trap the entire spectrum. The Mars rover is using multi-junction cells. If the sunlight is concentrated on the multi-junction cells their efficiencies reach up to 50 per cent.
In India research on multi-junction cells is next to negligible. The ministry has recently tied up with a few institutions for such research.
One of the key areas where India needs to invest in the short term is meteorological stations that monitor solar radiation. Currently, 45 of the 200 weather stations of the India Meteorological Department (imd) have installed radiation monitoring equipment. “Most of these stations are in big cities, but the industry would require much more accurate data at the village and block level,” said Deepak Verma of Emergent Ventures, a renewable energy consultant. Currently, solar power producers are using data prepared by international agencies which is compared with imd data wherever possible. imd officials agree their data is not sufficient. “Radiation might not be uniform in the region covered by a particular station. Radiation is also not uniform throughout the day,” an official said. “Each plant may need a radiation monitoring station for itself.”
In India 73,000 villages are not connected to the grid. The national solar mission can easily become a model for supplying power to rural areas and poor homes, said Ranjit Deshmukh of Mumbai non-profit Prayas Energy Group. He has pegged hopes on small solar power plants away from the grid.
The solar mission aims at generating 1,000 MW by 2017 through small solar power plants, rooftop solar photovoltaic panels, home lighting systems and other technologies. Micro-credit, small loans and subsidies will help set up such systems. Officials in the Ministry of New and Renewable Energy, said the ministry, along with the Indian Renewable Energy Development Agency, is drafting guidelines for the off-grid scheme. But the scheme does not spell out how this power will be generated and distributed to villages, so it cannot be said with surety how much power will reach villages and far-flung areas.
Inderpreet Wadhwa, whose company supplies power to villages in Amritsar, said a good model is a combination of off-grid, a mini-grid, micro-finance and pre-paid tariffs. The grid wastes electricity in transmission, but if places producing electricity also consume it, the losses can be cut, he added. Wadhwa proposes a model where electricity by a solar power plant can be connected through an 11-Kv line to a local grid with a substation, which will relay it to houses. Micro-finance can help villagers buy prepaid meters. He accepts solar power is expensive but says costs will fall over time.
But the easiest and most effective way of providing power to villages is through solar lanterns, said Deshmukh. Solar lanterns fitted with efficient led s can replace kerosene lamps. A part of the kerosene subsidy can be used to fund solar lamps. Government can also help set up 50 to 100 kW solar plants with battery storage. Schemes promoting solar home lighting systems have worked for several places in India.
Inputs from Kumar Sambhav Shrivastav
The Thyagaraj Sports Complex in Delhi is called a green stadium. One look at its features shows why. From using renewable energy to getting the most out of energy sources, from water conservation to use of recyclable materials. Since there is now at least one day—June 5—when there is a collective need to search for answers to searching questions, this stadium deserves a good look.
And don’t miss the handball
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