The need for energy efficiency is presently a global hot topic, and so the inaugural National Energy Investment Summit being held next month, is both a timely and significant platform for the region.
The event is taking place on July 21st – 22nd 2011 at The Grand in New Delhi, and is seen as pivotal in the country’s quest to achieve its 2022 agenda.
It is supported by a number of Government and industry associations, including the Ministry of New and Renewable Energy, The Energy Resource Institute, World Institute of Sustainable Energy, Indian Wind Energy Association, Solar Energy Society of India, Indian Private Equity & Venture Capital Association, All India Association of Industries and Centre for Wind Energy Technology (C WET), Renewable Energy & Energy Efficiency Partnership and Independent Power Producers Association of India.
Up to 150 investors, Government officials and renewable energy solution providers are attending. Investors are expected to travel from the Middle East, Europe, China and Australia – as well as India.
This initiative provides an ideal arena for all parties to discuss projects geared towards transforming the country’s energy industry. Key issues such as emission reduction, carbon emission trading and Clean Development Mechanism are also being debated.
The two days are organised and hosted by business information group naseba. “We are proud to host this summit and grateful for the support of the Ministry of New and Renewable Energy in India. This is the first capital raising platform for renewable energy projects of its kind in the region, and up to US$ 7.5 billion in expected to be invested.” commented naseba General Manager (INDIA) , Mohammed Saleem
NEW DELHI: In an effort to fast-track the National Solar Mission, the Government on Thursday approved a scheme which will help in availability of funds for carrying out projects under the mission.
The Union Cabinet cleared the Payment Security Scheme to enable financial closure of projects under the mission by extending Gross Budgetary Support (GBS) amounting to Rs 486 crore to the New and Renewable Energy Ministry (MNRE), an official spokesperson said here.
The scheme will help MNRE in the event of defaults in payment by the state utilities to NTPC Vidyut Vyapar Nigam (NVVN), the Central Agency which will purchase solar power from the developers and sell it to the utilities bundled with unallocated thermal power available from NTPC utilities.
The Maharashtra government remains uncomfortable with the idea of harnessing solar power from residential rooftops even as Delhi is raring to go.
The Delhi government on June 5 announced that it would unveil a detailed plan in 3-4 months for harnessing solar power from residential rooftops, in partnership with the Ministry of New and Renewable Energy.
Under the proposed policy, residents can get solar power plants installed on their rooftops by signing a power purchase agreement with the company supplying power to their area. For a rooftop of around 200 square metres, the cost is estimated to be Rs8-9 lakh. Residents can either lease out their roofs to a developer, who will then set up the unit, or pay 30% of the cost of installation. The remaining 70% will be financed through banks. The price payable per unit of such power will be Rs17.50, which the owner of the rooftop can sell to any power supply company. Details on the manner in which connectivity will take place are not yet available.
So what explains Maharashtra’s hesitation?
Part of it has to do with the reimbursement limit set under the otherwise-laudable Jawaharlal Nehru National Solar Mission (JNNSM). The Mission requires the states to generate 0.25% of the power purchased by them to come from solar power by 2012. The price fixed by the Mission is Rs17.90 per kWh, which is slated to come down to Rs15 per kWh next year. This is the price reimbursed to the states under the JNNSM —- anything over the 0.25% limit will not be reimbursed.
Somewhat expectedly, Maharashtra identified degraded government-owned land, lying idle around places like Dhule and Osmanabad, and got them transferred to its power generation company. It then floated a reverse bidding tender and aggressively brought down the purchase of solar price to under Rs14 per kWh and identified two players — Lanco Solar and Megaprojects — who would collectively supply the state 125 mw of solar power.
“We now have a problem,” said Ajoy Mehta, managing director of Mahavitaran (Maharashtra State Electricity Distribution Co Ltd). We would like to generate more solar power, but with the sanctioning of this 125 mw capacity, we have more than met the requirement of 0.25% of our total power purchase through the solar route. This is the power for which we are reimbursed Rs17.90 per kWh costs by the JNNSM (the difference between Rs14 per kWh and Rs17.90 will be kept aside to subsidise additional power generation).
If we now announce a rooftop solar policy today, who will pay for the additional high cost solar power?”
This is because the basket cost for Maharashtra’ power purchase is around Rs2.93/kWh, though the system marginal cost is a lot higher at Rs4.10. Solar power, Mehta believes, is unlikely to cost less than Rs13 per unit, which means the additional power costs will have to be pooled in the basket, pushing up its costs further. Since the JNNSM has added an incentive tariff of Re1 per unit for rooftop solar, the cost of purchase will go up further.
“Already, thanks to cross subsidisation of cheap power to agriculture and marginal users, commercial users are paying a price of around Rs9 a unit. Purchasing more solar power that cannot be subsidised by the Centre will require us to load commercial tariffs even beyond this unbearable level,” said another government official.
But couldn’t there be another way out? After all, the central government has mandated that all states increase solar power purchase from 0.25 to 0.5% of total power purchased by 2013. Shouldn’t the states then plan their future procurement in a way that all solar power is via rooftops?
This is precise what Germany did when it decided to popularise solar power. In ten years, it has seen solar power production swell to over 17,000 mw and counting.
To its credit, the rooftop route encourages every resident to participate in solar power production. Power generation is thus distributed, rather than a privilege enjoyed by a few producers.
By announcing a fixed purchase tariff, which would be constant for say 25 years, and by allowing agents to set up rooftop panels on the one hand, and act as power aggregators on the other, Germany saw most agents introducing innovations to bring down their cost of production and increase profits.
Increased volumes caused the solar panel costs to crash from $5 a watt to just around $1 a watt a month ago. And they continue to fall at least 10-20% a year, says a senior official at Wipro, which has just embarked on promoting solar power installations.
Maharashtra government officials are uncomfortable about this strategy.
“What if we announce a solar rooftop policy and the total offerings through this route go beyond 300-500 mw (which could be the case)? Who will bear the higher cost of solar power procurement?” asked an official.
But one area where the state is willing to look at solar power quite aggressively is rural communities where the cost of supplying power is very high, subsidies even higher, and collections quite poor.
For instance, the average cost of electricity supply comes to around Rs4.34 a unit, whereas it is supplied to agriculture at Rs1.50 a unit. Even so, the farmer pays just around 20 paise, while the remaining Rs1.30 is subsidised by the state government.
Thus, the total agriculture subsidy on account of power is in excess of Rs5,000 crore annually. More unfortunately, even at 20 paise per unit, only 20-30% of the farmers pay their bills, leaving some Rs500 crore uncollected.
That is why Maharashtra is looking quite favourably at providing a subsidy to solar powered pumps (manufactured primarily by Kirloskar) so that this subsidy can be reduced.
Another way could be to identify small villages where the cost of transmission causes the cost of supplying power to exceed Rs14 per unit. There, rooftop solar power could be extremely attractive and viable, reducing the pressure (and cost) on transmission grids and the temptation to steal power.
But will Maharashtra bite the bullet and announce such a policy? That remains to be seen.
If all goes according to plan, India’s solar power capacity will grow six-fold to touch 300 MW by the end of this year, even as several enthusiastic states are commissioning solar power plants. Rajasthan, Gujarat, Karnataka and Maharashtra are among states where solar projects are set to be commissi
oned in the latter half of 2011.
NTPC Vidyut Vyapar Nigam (NVVN), the nodal agency to purchase solar power from independent producers, had last October signed MoUs with 16 developers to set up 84 MW capacity solar projects under the migration scheme to Jawaharlal Nehru National Solar Mission (JNNSM).
This January, it signed MoUs with another 30 developers to set up 620 MW capacity solar projects under the first batch of the phase 1 of JNNSM. Besides this, states such as Gujarat and Karnataka are pursuing solar projects on their own.
“There could be approximately 200-300 MW of solar capacity installed, but there are no guarantees. It all depends on whethera companies can get financing and execute,” said Ameet Shah, co-chairman, Astonfield Renewable Resources Ltd.
Wind power has added 2,000 MW to the National Grid, but solar power has added a measly 40MW till now. The Centre expects 250MW to be added in the current year.
Major business houses such as Mahindra, Videocon and MoserBaer have already entered the solar sector. Shah felt there will be half a dozen companies with 50-100 MW capacity by the end of 2012. The Centre aims to build 1,000 MW solar power capacity by 2013 while; 22,000 MW is the target for 2022 under JNNSM.
“India’s solar market is still in a nascent stage with both national and state policies only recently beginning to take shape,” said Raj Prabhu, managing partner, Mercom Capital Group, a clean energy consulting firm.
“The second and third quarters of 2011 will be significant as financial and project deadlines become due,” he said.
Momentive Performance Materials, a pioneer in silicones and other advanced materials, has extended its global distribution agreement with Targray Technology International, one of the world’s leading suppliers of silicon and advanced materials to the solar industry.
Targray’s Vice President of solar division, Dan Murray stated that the Indian PV industry is a strategic market, which offers potential opportunities in the future. The expanded agreement will enable both companies to effectively bring sealing and potting products to increasing number of solar customers in India.
Momentive is pleased to expand the distribution agreement with Targray to include the PV market in India. According to the company, Targray is the right partner to distribute its solar specific silicone potting and sealing solutions in India and across the world. The PV products from Momentive meet manufacturing process requirements, provide protection against harsh weather and offer enhanced field durability.
PROINSO will conduct the supply throughout this year and, according to company sources, is currently negotiating the provision for other solar energy projects in India in excess of 20 MW power for 2011, for both Indian and European developers with projects in India.
MECASOLAR and PROINSO- companies that form part of Grupo OPDE- plan to open an office in India before the end of the year, and will be travelling there in April on a trade mission with the Spanish Association for the Internationalisation and Innovation of Solar Companies (SECARTYS-SOLARTYS).
This mission will enable both companies, – who participated in the Renewable Energy Technology Congress held in New Delhi -to see first hand the commitment that the Indian Government is making to solar energy, its current plans for the development of solar energy the forthcoming years –National Solar Mission-, and the various plans that some regions are carrying out. During this mission contact was also made with a large number of promoters, EPC companies and customers.
At the end of this year both PROINSO and MECASOLAR will attend INTERSOLAR INDIA to be held from 14 to 16 December. Prior to this, they will be present at INTERSOLAR EUROPE to be held from 8 to 10 June in Munich, where they hope to make contacts with customers in India, taking advantage of the huge attendance at the event.
PROINSO have highlighted the enormous growth potential for the solar energy market in India in the coming years, as forecasts suggest that by 2020, the country will have installed 10,000 MW.
World leader in distribution
PROINSO, which has offices in Spain, Germany, Greece, Italy, United States, Britain, Canada, China and Czech Republic– expects to exceed the figure of 1,000 MW supplied throughout 2011. The company can provide these forecasts as they have closed orders which predict that this figure will be added together to the 812 MW which has already been supplied since 2005.
PROINSO has a strong international focus, as is indicated by its more than 1,555 qualified installers who are part of its Network, in addition to more than 90,000 m2 of logistics warehouses spread out among its delegations.
Bharat Heavy Electricals Ltd has won Rs 62 crore order for setting up a solar power project at Belakavadi in Karnataka. The company said Karnataka Power Corporation Ltd has placed the turnkey contract for a five-megawatt solar photovoltaic project.
The company manufactures photovoltaic modules at its Bangalore manufacturing facility. Solar cells and modules manufactured by the company are also exported to countries like Germany , Australia and Italy .
Bharat Heavy Electricals had in February this year signed an agreement with Spain’s Abengoa to set up solar power projects in India . The companies seek to tap emerging opportunities arising out of the Jawaharlal Nehru national solar mission, which aims at the establishment of 20,000-mw solar power generation capacity by 2022.
India‘s federal cabinet Thursday approved the allocation of 4.86 billion rupees ($108 million) toward a scheme to guarantee payments for electricity bought from solar power producers, as part of the government’s efforts to encourage development of renewable energy.
The funds will be used as guarantee in case state-run power utilities and distribution companies default on payments for solar power, which currently costs much more than coal-based electricity.
The payment security scheme aims to help solar power producers arrange finances for their projects, the government said in a statement issued after a cabinet meeting.
The scheme will help the federal government meet targets under its National Solar Mission, which aims to build 1,000 megawatt of solar power capacity by 2013 in the first phase. India aims to add 20,000 MW of solar power by 2022 under the solar mission.
The scheme will be implemented by the Ministry of New and Renewable Energy and NTPC Vidyut Vyapar Nigam Ltd. will be able to draw funds from the account as per the scheme’s provisions, the statement said.
NTPC Vidyut, a unit of India’s largest power generator NTPC Ltd., buys solar power from the producers and sells it to utilities bundled with coal-based power.
But most state-run distribution companies are cash-strapped with weak finances. This has elevated the risk of solar power producers not being paid for the electricity produced. That has affected solar companies building these new plants as lenders aren’t willing to give loans to projects where returns are risky.
Solar companies that have been awarded projects under the mission’s first phase in particular are facing hurdles in arranging finances. For the projects awarded so far, companies have to raise funds by the end of June.
India currently has 20,000 MW of renewable energy capacity, constituting more than 11% of the country’s total power generation capacity of around 174 gigawatts.
Research into new materials and structures is under way. Innovative technologies are being tried out. But it has to result in large-scale manufacturing applications. DR. MADHUSUDAN V ATRE, PRESIDENT AND M.D., APPLIED MATERIALS, INDIA
The Jawaharlal Nehru National Solar Mission (NSM) and its guidelines have created significant excitement in the industry with the announcement of new projects, setting up of assembly units and States vying with one another to offer incentives. With critical mass coming in, several large players are looking at backward integration, possibly manufacture of wafers.
Dr. Madhusudan V Atre, President and Managing Director, Applied Materials, India that is among the top suppliers of equipment and technology for solar industry and semiconductor segments, provides insights into the way forward.
Applied Materials and IIT-Bombay have joined to set up National Centre for PV Research and Education and a Clean Lab to work on new materials. Dr. Atre, who has been appointed a member of the advisory committee to drive the sector’s growth, touches upon prospects and challenges in an interview to Business Line. Excerpts from the interview:
What is happening in the solar industry? How do you perceive some of the changes and challenges?
A lot of developments have taken place since the Solar Mission. Various projects have been finalised. On the photo-voltaic side, projects ranging from 1MW to 5MW and on the solar thermo lighting, 50 MW to 70 MW have been finalised.
Many projects approved under the NSM have achieved financial closure and completed land acquisitions.
Apparently things are moving. From the Government’s perspective, it must be reasonably satisfying.
Apart from solar cell manufacturing and utilities, backward integration into wafering and polysilicon is also under way. All this will lead to the creation of a very vibrant solar ecosystem in India.
There have been developments at the Central and State Governments. Gujarat continues to drive a lot of solar-related projects.
What about the semiconductor business?
The Government wants to pitch in $5 billion on setting up infrastructure. The modifications in the Semiconductor policy in 2007 will be reviewed. Many changes are proposed in the policy. It is good the Government is thinking seriously about fabs.
That would be good from a manufacturing perspective but depends upon the local market. Areas of healthcare, automotive, and industries will need them.
These are big guzzlers of semiconductor chips. The changes recommended in the policy can probably make it a little more practical with the perspective of helping set up a fab.
Many companies are getting into an implementation mode. Some of them are raising finances and setting up units, such as Lanco and Moser Baer. What stage are they in capabilities?
Many have attained financial closure and acquired land, approved either by the State or Central Government and started their projects. The manufacturing technology is not a widely prevalent expertise. They have to depend on established technology and Applied Materials is one of the players.
Besides just the cell and module manufacturing which is usually thought of in the solar arena, some want to go a few steps aheadin terms of either manufacturing polysilicon itself or taking polysilicon blocks and making wafers out of them. Till now wafers needed for the crystalline silicon solar cell manufacturing are imported. Some are considering why not bring the silicon and do wafering.
Why should we bring the silicon and do the wafering , why not manufacture the polysilicon here is another line of thinking.
If you look at the chain which essentially comprises silicon, wafers, cells and various utilities, there are players who are now looking across the chain, and not just at a cell or a module. That is important.Through vertical integration, you can bring down costs. If you import a wafer, you are not only paying the guy from whom you are buying the wafer for his manufacturing cost but you are also paying for imports, logistics and transport. Internally, there is an inherent nailing down of costs.
This will be a domain only for serious players with deep financial resources. Backward integration brings about a cost and investment escalation. In the long run, serious and non serious players will get segregated.
Two years ago we were talking of Rs 19 crore for 1MW of installation; now they are saying Rs 15 crore and some of them a little lower than that. What is your assessment of ground reality?
They are talking of Rs 15 crore per MW, the figure has been arrived at after extensive study and with industry inputs. The cost will go down as a function of time, technology escalation, efficiency escalation. That is why now the tariff stands at Rs 12 per kilo-watt. That will decrease year on year as the technology goes up and cost goes down.
Do you see some new technology challenging usage of solar devices? What is your assessment from a research perspective?
Huge amount of research on technologies and devices is under way into new materials and structures.
Some are doing the corrugation of a solar cell on a certain dimension to capture more sunlight, so as to increase the efficiency. Innovative technologies are being tried. But it has to result in large-scale manufacturing applications. R&D to manufacturing process is a significant step.
For instance, flexible solar cell is something that can be used to wrap around objects. This will increase the mobility of solar units. Many new technologies and applications can come up. At the end of the day, it depends on how much of it can be scaled up in terms of size, manufacturing and scaling down of the cost.
We are talking about large installations, what about small units?
Power plant utilities are as important as standalone distributed solar applications. The policy lays a lot of effort on rooftop, lighting applications and other commercial applications.
The higher the utility, the cost and investment is that much more. There is a lot of focus on this by distributors and small scale plants.
The Solar Mission had taken out a directive that out of the 1 Gigawatt generated 100MW has to be diverted towards roof-top applications.
US-based Astonfield Renewable Resources today announced that it has entered into a strategic partnership with Grupo T-Solar Global S.A., a Spanish-based solar power producer with an installed generation capacity of 168 megawatts (MW) in Spain and Italy, as well as a large pipeline in Southern Europe, Latin America and the US. The partnership has been initiated with Astonfield’s 5MW solar PV project in Osiyan Rajasthan, India, which is expected to be the first in a long-term strategic collaboration between Astonfield and T-Solar.
Astonfield will deploy T-Solar’s latest generation 5.7 square metre (m2), hydrogenated amorphous silicon (a-Si:H), thin-film modules in Osiyan Rajasthan. This project will be one of the first utility-scale solar power plants commissioned under the Jawaharlal Nehru National Solar Mission (JNNSM) and is expected to be commissioned by October 2011. Construction on the Osiyan Rajasthan project has begun and, once operational, it is expected to generate at least 8500 megawatt hours (MWh) per year, enough to power the equivalent of more than 13,000 Indian households.
With T-Solar’s strategic investment and project debt financing in place from leading Indian banking institutions, such as the State Bank of India and the Export-Import Bank of India, Astonfield has confirmed that site construction is well under way and the Osiyan Rajasthan project is set for on-time commissioning. Schneider Electric, an engineering, procurement and construction (EPC) provider based in France, has been retained as the project’s (EPC) manager.