Monthly Archives: July 2012

Solar industry insight

In 2011-12, India’s solar power capacities increased to nearly 940 MW from 20 MW in 2010-11.This is mainly due to the Gujarat State Solar Policy and the Centre’s Jawaharlal Nehru National Solar Mission (JNNSM) which are due pillars of  solar power development in India. Besides, a sharp decline in capital costs over 2011 also drove this rapid expansion.

Capacity additions

State Electricity Regulatory Commissions (SERCs) have mandated their respective power distribution companies to procure solar power. This is at a minimum of 0.25% as part of their solar renewable purchase obligations (RPO). Higher cost-reflective tariffs have supported the four times costly solar power over the conventional power. The central and Gujarat policy have facilitated long-term off take agreements for solar power. These are in between project developers and distribution companies (discoms) at cost-reflective preferential tariffs.

Globally, capital costs in PV (photovoltaic) projects) prices crashed due to massive capacity additions by China. Atop it, demand in key European markets — Germany, Spain and Italy — also dried up. This further reduced the module prices. Globally the demand stood at 25-30 GW solar photovoltaic (PV) module capacity compared to 50 GW at the end of 2011.  As a result, capital costs fell by 30% over 2010 level, to Rs.10 crore per MW by end-2011.

Still due to the continued over-capacity in global markets, capital costs are expected to decline to Rs.8.7-9 crore per MW in 2012. This comes to 12% decreased compared to the previous year. The pace of decline in module prices will slow down in 2012 as module suppliers in the U.S. and Europe are staring at eroding profitability, and even bankruptcy in some cases. Further, the weak rupee will limit decline in capital costs, as most of the equipment has to be imported.

The scenario of decline in the capital costs led many solar power producers to bid aggressively in the batch 2 of JNNSM  (350 MW bid out in December 2011). This brought a decline of nearly 25 % (at Rs.8.8 per unit) in the average tariffs bid, compared to JNNSM batch 1 (150 MW bid out in December 2010). However a levelised tariff of Rs.9 per unit is necessary for healthy return. In batch 2 of JNNSM nearly half the bids are below Rs.9 per unit and about a fourth bids are below Rs.8.5 per unit. This had made these investments highly risky.

Reducing borrowing costs is the throttle point for the viability of these projects. However, access to lower cost foreign funds is linked to foreign equipment supplies through developmental financial institutions. It will be thus difficult for the players opting for crystalline PV technology in phase 2 to tap these funds as they are required to procure crystalline PV equipment domestically.

If the low-cost foreign funds have to be accessed, the thin-film technology, on which the restrictive domestic procurement clause is not applicable, needs to be used.

Gujarat’ s solar policy is separate in this regard as there is no domestic content clause under it. The tariff of Rs.10.37 per unit offered under it therefore provides more attractive returns for project developers. There is also a strong upside to these returns as players can obtain cheap foreign debt. It can be therefore said that the extent of decline in capital costs will decide the momentum of future capacity.

(Source: The Hindu)


Time for Rooftops solar Plants in India

Now it is time for the rooftop solar power plant in India, explained by the many speakers at REaction, 3-day conference organized by Energy Alternatives India it was a conference of the renewable energy industry and EAI is a Chennai-based clean-tech consultancy.

The Managing Director of SunEdison, Mr Pashupathy Gopalan, said solar plants on rooftops of commercial buildings can even now produce power at costs almost equal to distribution company rates and the grid parity of the residential rooftops will be reached within two years.

It doesn’t matter even if policy-makers do nothing to push rooftop solar. “Economics will take over,” Mr Gopalan said. he has further said that it is feasible to sell roof top solar electricity at Rs. 7 per unit. SunEdison has already put up a Solar roof-top plant of 100KW on the roof of SCOPE, Standard Charter Bank’s captive BPO in Chennai but it has npt disclosed at what price they are selling the electricity.

The biggest advantage in this rooftop solar installation is that electricity prices are fixed for approximately 30 years, even if grid power is a trifle cheaper today but it is sure that the prices of the grid power are going to rise.

Raising funds typically is the most critical aspect about residential rooftop projects in India, as the households find it difficult to raise funds from banks, we know that all the households are not inclined to incur capital expenditure for electricity that is anyway available from the grid said by Mr Gopalan.

The per unit cost of a rooftop solar plant production with battery base storage is Rs 10 but without battery backup, the cost would be much less, told by Mr Madhavan Nampoothiri, Founder and Director, RESOLVE Energy Consultants.

There are some facts about the solar rooftop which must be known  which are as that a rooftop solar plant with “grid-tie” will not need battery back-up, but the solar plant will stop functioning if the grid goes off. However, if a diesel genset is used as a back-up for periods when grid power fails, solar power could be harnessed the most, said Mr Rajeev Agarwal, Founder & Managing Director of Ardor Green Solar and Wind Pvt Ltd.


Solar energy crossing GW capacity

The data made available by MNRE now shows that solar PV installations in India have crossed the 1000MW or 1 GW capacity.

Grid interactive solar PV installed capacity was 1,030.66 MW by the end of June. Most of the capacities have come in Gujarat. Local use of solar energy has also undergone much height. The figure shows that India has 85.21 MW of off-grid solar PV systems with system capacity of at least 1KW.

Talking of the overall renewable energy installations in India total grid interactive renewable energy installations crossed 25,000 MW in the first quarter of the current year.

During the first quarter of the year, 291.7MW of the 495MW added was from wind energy sector in the first quarter of the year.

At present the total installed capacity of renewable power plants in the country is 25,409 MW.

Target for 2012-13

The Ministry has set a target of 4,125 MW of additional green power capacity for the current financial year. This includes 2,500 MW of wind power and 800 MW of solar PV.

It is worthy of note that the targeted wind power capacity is lesser than the achievement of last year, which was 3,164 MW.

When noted the views from the wind energy sector that even 2,500 MW would be a tough target to achieve, due to two reasons. The reasons being counted are removal of two key benefits i.e. ‘accelerated depreciation’ and ‘generation-based incentive’. The tough operating condition in the chief operating states like Tamil Nadu is also seen as a barrier for achieving the targets.


Rooftop solar to grow in a big way in the coming time

In a conference REaction key speakers indicated for rooftop solar to grow in a big way in the coming time. Solar plants on rooftops of commercial buildings can even now produce power at costs almost equal to distribution company rates said Mr Pashupathy Gopalan, MD, SunEdison.

Adding he said residential rooftops will reach grid parity within two years.

It doesn’t matter even if policy-makers do nothing to push rooftop solar. “Economics will take over,” Mr Gopalan said.

He also said that it is feasible to sell rooftop solar electricity at around Rs 7 a unit. Grid power is cheaper at present but will go up in future. Comparing, the  biggest advantage in this is that electricity prices are fixed for, say, 30 years. For a typical household the difficulty is to incur expenditure on solar although  electricity is available from the grid. But even if they wish to go for the loan it is difficult to obtain from the banks.

Mr Madhavan Nampoothiri, Founder and Director, RESOLVE Energy Consultants, said it is Rs 10 to produce a unit of battery based rooftop solar power.  The cost will be much less if the electricity is much cheaper.

A grid-tied system does not need battery back-up, but will stop functioning as the grid goes off. However, where a diesel generator is used as a back-up for periods when grid power fails, solar power could be harnessed the most, said Mr Rajeev Agarwal, Founder & Managing Director, Ardor Green Solar and Wind Pvt Ltd.

(Source: The Hindu Business Line)

Power Grid planned for strengthening the grid for Renewable

A plan of Rs 42,000-crore is going to be implemented by Power Grid Corporation for setting up an exclusive countrywide green corridor for renewable energy transmission.

Mr R. N. Nayak, Chairman and Managing Director, said this would be done over a period of five years. The project would be handling transmission of 40 GW of renewable energy capacity by 2030.

About Rs 20,000 crore out of 42,000 crore would be for intra-state strengthening and rest for inter-state transmission systems for grid integration. This would also include other work such as energy storage, real-time monitoring system and setting up of renewable energy management centre.

Cumulatively, RECs worth over Rs 4,000 crore were traded till June 30. In the current June quarter, the registered capacity went up to 514 MW as against 240 MW. RECs issued were 612,191 as compared to 59,863. RECs traded totalled 113.31 crore (Rs 5.27 crore).

On the June quarter performance, Mr Nayak said project execution had picked up considerably. In Q1 FY12, project spends were Rs 1943 crore, while in Q1 FY13 it was up at Rs 3007 crore.

A logistics cell is being setup to coordinate dispatch and receipt of equipment at site. On grid management, he said in the first quarter POSOCO executed short-term open access transactions involving 16,300 million units and it is now possible to buy and sell power every 15 minutes.

The company is deploying high-temperature conductors and compact, tall towers for better utilisation of the right of way. To increase bulk power transmission capacities over long distances the company is working on 800 kV HVDC (high voltage direct current) and 1200 UHVAC (ultra high voltage alternating current) systems. It had recently test charged a 1200 kV line.

(Source: Business Line)

New power tariff system soon to be released by DERC

To limit the power consumption in the peak hour the Delhi Regulatory Electricity commission has decided to introduce a new system under which tariff will be charged according to electricity consumption in peak and off peak hours.

This proposed mechanism will be introduced on a pilot basis aimed at encouraging consumers to limit their power consumption in peak hours; this was explained by officials in Delhi Regulatory Electricity Commission said.

Time of Day (TOD) metering is the name given to the system this system is expected to put off commercial users from consuming more power during peak hours and result in minimizing load shedding in residential areas when the demand goes up to a large extent.

“To promote consumption of power in off peak hours A suitable system of incentives would be there and to discourage peak hour consumption levying of surcharge would be also there and this is expected to reduce power purchase cost,” the DERC had said.

Delhi will be the first state in the country to have such a metering system if it is implemented in Delhi, which would benefit everybody including the consumers, experts said,.

To meet the demand at the peak hours from 6.00 pm to 11.00 pm at present the power distribution companies repeatedly have to obtain additional power from the market at very high cost.

Breaking all previous records of the power demand in the city registered an all-time high of 5,642 MW on July 6; the city has been witnessing long power cuts for last couple of months due to the increasing demand and supply gap.
The National Electricity Policy and National Tariff Policy mandates the state regulators to initiate the TOD in order to shrink the demand of electricity throughout peak hours resolving to put into practice the new system, DERC officials said.

Initially this TOD system will be introduced the DERC for industrial consumers having a load of 300 kilo watt and above also wants to put in place an effective demand response mechanism through which consumers will be able to save money on power consumption Officials said.

(Source: Deccan Herald)

Indian firms now inviting South African companies for their renewable energy plan

The fast-growing economy of India has already seen 25000 MW of installed renewable, making it the fifth-largest player of clean energy solutions across the globe.

India has invited South African companies to partner in the ambitious plan of adding 30000 MW of renewable capacity by 2017.

India is seeking to add momentum to a roll-out that had already accelerated sharply over the past few years, Gireesh B Pradhan, Secretary of the MNRE said while addressing a conference in Johannesburg organised by the Indian High Commission. Mr.  Pradhan also stressed the investment climate in India is friendly amid the Ernst & Young’s ‘Renewable Energy Attractiveness Index’ where India was ranked fourth.

Confederation of Indian Industry (CII) co-chair Deepak Puri, who led the delegation of about 70 Indian renewable executives to South Africa said that Indian companies are also keen to participate in South Africa’s renewable energy programme. He indicated that India’s untapped wind, solar, biomass and small hydro resources remained considerable.

From a modest 3600 MW in 2003 India has an installed base of renewable that surged to its current level of 12 per cent of the country’s 200000 MW power capacity.  Pradhan attributed such expansion mainly to the renewable purchase obligation (RPO) that made it compulsory for distribution utilities to procure a certain percentage of renewable from generators. The government would be looking to increase the penalties on distributors failing to meet the obligation, he added.

In South Africa’s Integrated Resource Plan for electricity, the plan is to add some 17000 MW of renewable energy to the coal-heavy power mix by 2030. The Department of Energy is currently procuring 3725 MW of renewable energy and aims at introducing the same to grid between 2014 and 2016.

(Source: EnergyNext)

MNRE to promote the concept of Solar cities in each state

MNRE has now started promoting the concept of solar cities in India. It is now encouraging the local bodies of the urban cities to prepare road map as a guide in converting those cities into solar cities. The implementation of solar cities will clear all the energy problems of the urban cities by consolidating all the efforts of the ministry. promotions in the scheme would include installation of solar water heating systems in hostels, homes, hospitals, industries and hotels; installing solar PV systems in the areas of demonstration; creating “Akshya Urja Shops” along with designing solar buildings. It will also promote industrial and urban biomass to energy projects under this program.

All kinds of renewable energy sources such as wind, solar, hydro and biomass will be used as energy projects to be installed in enrgy efficient manner covering the energy demands of the city. The cities with a population of 50,000 to 50 lakhs will be considered for this programme will special relaxation to hilly states, union territories and islands. In the 11th Plan of MNRE at least 60 cities were selected for such programme with at least one city in each state.

The local governments will be making the master plan of the system and will also be responsible for providing institutional arrangements for it. The master plan will include the base line of energy consumption of 2008, energy demands forecasting of 2013 and 2018, sector wise strategies and the plan of action for implementing the renewable energy projects to minimize the fossil fuel consumption of the city. The financial assistance to such cities has been decided to be around Rs. 50 Lakhs per city depending upon the population of the city.

(Source: Times Of India)

Solar energy growing its size as a pillar of energy needs of the nation

According to sources in the second fortnight of July, the peak demand met was 115,000-117,000 MW, and the energy consumed was about 2,650 million units a day. Actually this is 6-7 per cent from same period last year.

But of these 2,650 million units, 170-180 million units were from renewable sources, mostly wind energy. Government is now proposing to increase it to 30,000 MW in the Twelfth Plan against 14,000 MW in the Eleventh Plan.

In last 10 months NTPC Vidyut Vyapar Nigam (NVVN) has fed117 million units of solar energy into the grid procured from the first batch of the National Solar Mission.

At present almost 178 MW of solar power, mainly photovoltaic, is being added to the country’s energy mix now. The eight States using this power are Rajasthan, Punjab, Maharashtra, Andhra Pradesh, Odisha, Tamil Nadu, Uttar Pradesh and Karnataka.

Although the  electricity from solar is costly  at Rs 4.5 a unit .This is because the Government has prescribed guidelines under the National Solar Mission, which stipulates that every megawatt of solar power is bundled with conventional power (four units)

At present the developer (under the Mission’s first batch) sells to NVVN at a discounted rate of about Rs 12 a unit (weighted average). The distribution companies then source power at this bundled rate as they are compensated by the Government in the form of equal amount of conventional power, the official added.

But still the country is experiencing power deficit of about 8-9 per cent at present.

(Source: The Hindu)

India’s Clean Energy Targets can get a Boost with very low expenditure

As we know that the India is the world’s fourth-biggest energy consumer and according to the panel of regulators India can increase renewable power purchase targets for distributors at minimal cost.

The state distribution companies and private operators Reliance Infrastructure Ltd. (RELI) and Tata Power Co. (TPWR)  would be allowed to buy as much as 11.4 percent of their electricity from renewable sources by 2017; this additional capacity will be added by the clean energy utilities such as wind and solar farms. This statement was given by government on the basis of a study by the top electricity regulators.

There would be an increment in the average cost of purchasing power by one paisa per kilowatt-hour in the first year and gradually drop by 2017, the Forum of Regulators said. The cost can “be easily accommodated” by distributors, and the state governments should focus on enforcing targets.

In the coming five years India can add as much as 40,659 MW of clean power capacity provided that if its power transmission and distribution infrastructure is upgraded. That would be half of the additional power capacity India needs to build by 2017, according to a January report by the government’s Planning Commission.

(Source: Bloomberg)