International Finance Corporation (Ifc) on Thursday announced an investment of $4 million to build the country’s first large scale grid connected thin-film solar power plant, which will help bolster clean energy locally and provide additional electricity to about 11,000 people.
The investment by Ifc, a member of the World Bank Group, into Sapphire Industrial Infrastructures, a subsidiary of Moser Baer Clean Energy, will support the construction of a 5-megawatt solar plant at Sivaganga in Tamil Nadu.
“Ifc recognises the potential of large-scale solar power generation to help meet India’s enormous energy needs,” country head-Solar Farms at Moser Baer Clean Energy Rajya Ghei said.
The learning from this project will help us replicate similar projects in other Indian states, Ghai added.
The solar plant will have the capacity to produce eight million units of power annually, and is expected to avoid approximately 6,600 tonnes of greenhouse-gas emissions per year.
Grid connected solar electricity has received lukewarm response from the private sector in India due to higher initial investment and generation costs as compared to conventional energy sources.
“The successful commissioning of this first large scale thin film solar photo-voltaic plant demonstrates private sector’s ability to rise to the challenges associated with achieving a balanced energy mix,” Ifc director, Infrastructure Asia, Anita George, said.
MHS Energy Pvt Ltd, a newly launched infrastructure company offering outdoor power solutions for telecom industry, announced its joint venture with Germany-based b+w Electronics Systems to provide outdoor power solutions with low maintenance costs in India. It would invest Rs 150 crore in the initial stage to set up a manufacturing unit and to supply solar power solutions.
Plans are to install and run six systems in the first three months of operation and to increase installation to 500 units per month for the next 12 months, said Sajjan M Sharma, managing director, MHS Energy Pvt Ltd.
“We will install a total of 6,000 units of the solar power products in 12 months after the pilot project of six units. A combination of one solar power cube and a solar energy cube makes a unit,” he said. The first 6,000 units would be imported and assembled in India, while the company would later set up a manufacturing facility with a capacity of 6,000 units per month.
As per the agreement, b+w Electronics would provide the technology while MHS Energy would facilitate manpower, manufacturing capacity and investment.
Heinrich Walterfang, chairman and CEO, b+w Electronic Systems, said that the solar power units are tested and verified for proper functioning in Indian conditions and could replace the existing power sources including diesel power generators to cut down energy consumption by around 77 per cent.
It could bring down the operational expenditure from 28,032 kilowatt per hour per annum in a conventional shelter to 52,580 kilowatt per hour per annum, in a solar power solution unit. Out of the total 3.3 million towers in the country, around 166,129 towers are running on assisted power, said Sharma.
MHS Energy, launched today, is a wholly-owned subsidiary of Tenstar Infratech Pvt Ltd, which focuses on clothing, infrastructure and energy industries.
aint-Gobain Glass India (SGGI), manufacturers of a broad variety of flat glass items, has framed plans to make an investment of Rs 1,500 crore in India across its production plants over a period of two years.
In addition, float glass maker Saint Gobain is in search of land to establish a novel solar glass factory.
The company is also lifting up FDI worth $140 million.
Mr. B. Santhanam said that the company projects to establish a giant complex, which will manufacture crystalline silica, thin-film photovoltaic cells and solar mirrors all under one roof.
Recently, the company got hold of Sezal Glass’ float glass facility in Bharuch, Gujarat.
The facility began functioning during February last year.
Santanam said, “We would be making additional investments of R100 crore in the acquired plant for raw materials and it would be used as a manufacutring hub for West India.”
SGGI, a wholly owned arm of Compagnie de Saint-Gobain, headquartered in Paris, started Indian functioning in the year 2000 with the accreditation of its initial float glass facility at Sriperumbudur, near Chennai.
The R1,600 crore glass complex at Sriperumbudur, spread over 177 acres, houses two float glass plants to manufacture 1,200 tonnes of finished international quality float glass every day.
A recent KPMG report finds that the Indian economy faces increasing challenges in terms of energy policy, and that the seeds have been sown for a rapid and scalable solar sector “in the very near future”.
India’s growing economy and energy demands are increasingly reliant on energy imports, in the form of coal and oil. Coal dominates India’s energy mix and the economy writ large faces constraints in the form of unreliable and fragmented electricity supplies. The Indian Planning Commission has forecast the country faces 12 percent electricity shortfalls during hours of peak consumption. In this environment, and with reliable year-round sunlight in some regions, solar and photovoltaic generation has the potential to take off and save the country $5.5 billion in coal imports over the next decade, write KPMG’s report authors.
$110 billion in Indian solar investment opportunities and vast domestic market expansion
The Indian solar sector is yet to become mature and replicate the nation’s successes in the information technology (IT) and auto industry. However, with significant investment it could be transformed. The KPMG report, The Rising Sun, breaks down the investment in solar required to facilitate such a transformation into five year periods, coming to the conclusion that $20 billion is needed between 2012 and 2017 and $92 billion between 2017 and 2022. These figures combine both small-scale and off-grid installations, and large-scale solar farms.
In the photovoltaic sector, KPMG predicts that with such investment levels, the Indian vendor market would increase correspondingly by over $14 billion over the next decade. In industries related to photovoltaics – but not exclusive to the field – the vendor forecasts are also for rapid growth to reach $9 million in 10 years.
KPMG also sees room for growth and investment in photovoltaic related technologies in India, including storage technologies; non-module equipment such as inverters, which are not presently manufactured in India; and integrated systems and applications, such as agricultural pump systems. Furthermore, the report identifies great potential in India as a low cost photovoltaic manufacturer.
The report authors conclude that financially, “the solar sector has the potential to transform the Indian economy in a way the IT sector transformed the Indian economy in the 90s. Industry should grab this golden opportunity, thus benefiting themselves and the overall economy.”
Environment right for rapid solar expansion
The report also found that solar and photovoltaic industry trends favor a rapid expansion in India with falling costs and technological advances facilitating growth in both large scale and rooftop generation installations. In both cases, grid parity in India, as projected in the KPMG report, could be achieved in as little as six to eight years. Using this timeline, the report forecasts exponential growth in both the annual and cumulative solar markets.
Off-grid potential is also seen to be great with the report highlighting the potential of telecom towers as photovoltaic installation sites. Many are situated in areas with “limited or no grid connectivity” and at present rely on diesel fuel. With projected expansion in the number of such towers in rural and urban areas, the fuel requirements could amount to 3.5 billion liters per annum by 2020. At present, photovoltaic installations are price competitive with diesel and if a projected 30 percent reduction of diesel reliance is achieved, a saving of 5.4 billion liters over 10 years could be delivered.
Government role in India’s bright solar future
KPMG sees the role the government could play in realizing India’s solar potential as being crucial, and the report was supportive of the Jawaharlal Nehru National Solar Mission (JNNSM), which was launched in late 2009. The JNNSM set a target of a 22,000 megawatt production capacity in on- and off-grid production, to be realized by 2022. Regional governments also have a role to play in realizing India’s solar potential and KPMG reports that the states of Rajasthan, Gujarat and Tamil Nadu have significant potential in that their solar installation rates are high as are their conventional power costs.
Subsidies in the form of a feed-in tariff (FIT) scheme are noted and the structure of the German FIT program is cited as a workable model delivering, “innovation and rapid growth in the solar sector.”
Securing funding for the Indian solar sector is crucial, write KPMG, and government here is an important player. While solar technologies are yet to be widely proven in India, their may be a reticence in the banking community to provide funds and the Indian government has moved to educate the sector’s potential.
The KPMG report also highlighted the potential of Indian manufacturing, and research and development facilities. Here, a governmental role could be decisive, on both state and national levels, and time delays in pursuing tax credit or support schemes in this field could be crucial in reaching the envisage significant solar potential.