PANCHABUTA RENEWABLE ENERGY AND CLEANTECH IN INDIA
Outlook on Indian Renewable Energy
2013
Page
3
Wind
Page
10
REC
Page
22
Solar
TABLE OF CONTENTS WIND ENERGY........................................................................ 3 Outlook on Indian Wind Sector............................................................... 3
RENEWABLE ENERGY CERTIFICATES .................... 10 Dear Colleagues, The Indian renewable sector today can be compared to an animal that is crouching but is about to spring.
Outlook on Indian REC Market..............................................................10
Things have not been good for wind in the recent past, but there is good news—generation-based incentive (GBI) is coming back. The fifty paise a unit and the increase in quantum of GBI to one crore is a whiff of fresh air and could be the turning point that the industry is waiting for.
Interview with Vishal Pandya (REConnect Energy) ................... 14
After all, ‘accelerated depreciation’ has not been ruled out. Since there is support within the government, there is hope. ‘Competitive bidding’ seems not imminent, and the central regulator is likely to show some leniency if the industry is able to show financial injury due to ‘scheduling and forecasting’. The wind industry is in a consolidation mode. Non energy companies are exiting wind business and the industry is getting more into the hands of IPPs – as we had predicted in our last year’s edition. Coming to solar, there is no news of the Phase II of JNNSM, but one sees some action, in some states, particularly in Tamil Nadu. If the Courts uphold the state’s right to bring in the ‘solar purchase obligation’, Tamil Nadu is sure to become the preferred destination for solar in India. Even without waiting for SPO, many industries are putting up solar plants. It is practically a given that other states will follow Tamil Nadu.
GUJARAT SOLAR PV PLANTS - ANALYSIS OF ONE YEAR PERFORMANCE DATA ............................ 15 SOLAR ENERGY.................................................................. 22 Outlook on Indian Solar Sector ........................................................... 22
Evaluating the performance of Solar PV plants in India using Performance Ratio (PR) .......................................................................... 29
Interview with Pashupathy Gopalan (SunEdison) ...................... 32
Interview with Bikesh Ogra (Sterling & Wilson)............................34
Solar Showcase State - Tamil Nadu...................................................... 38
There is good news on the REC front. The regulators of Punjab, Delhi and Maharashtra have told their discoms that they shall meet the RPO targets this year. The end of the tunnel is getting closer by the day. Best Wishes, Vineeth Vijayaraghavan Founding Editor Panchabuta This publication is a sole property of Panchabuta and its contents should not be reproduced without the prior consent of Panchabuta. Email us at
[email protected] for feedback, queries, features and advertising with Panchabuta.
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OUTLOOK ON INDIAN WIND SECTOR India’s renewable energy sector is dominated by the wind segment. As of 31st March 2013, India had a renewable energy installed capacity of 28 GW out of which 68% or 19.05 GW was contributed by the wind segment. In the overall energy mix of 223 GW, wind’s contribution is 8.5%. The dominance of wind energy in the overall Indian renewable energy mix is obvious and a number of factors have contributed to the same. India’s foray into wind energy began in the early 1990s and has shown remarkable growth over the past two decades to become the largest contributor of renewable power generation in the country. The tremendous growth witnessed in the wind energy sector is seen in the results achieved so far – India currently ranks 5th in the global list of top countries in terms of installed wind energy generation capacity. After four years of continuous high growth, India’s wind sector saw installations reduce to half from the previous year. From a peak of about 3 GW annual capacity additions in 2011-12, the annual addition was only 1.7 GW in 2012-13. The major factor that contributed to the drop in installations was the withdrawal of the Accelerated Depreciation (AD) benefit. The ambiguity over the Generation Based Incentive (GBI) also added to the challenges. Not surprisingly, India’s ranking in the Ernst & Young (E&Y) report for the wind sector dropped from three to six in the Annual Renewable Energy Country Attractiveness Index released in May 2013.
M a r k e t s h a re of wind t u rb i n e m a n ufacturers The year 2013-14 saw some major changes in the market share of wind turbine manufacturers. Suzlon and Gamesa lost significant market share in the year 201213 over the previous year. Enercon and ReGen Powertech improved their market shares marginally in 2012-13 compared to previous year. Manufacturer
Installed Capacity in MW year-wise 200910
201011
201112
201213
Enercon
348.8
504
767
453.6
Suzlon
762.65
954.6
1149
414.75
ReGen Powertech
55.5
55.5
416
273
Inox
N.A
N.A
N.A
264
GE Wind
N.A
N.A
N.A
121.5
Source: Indian Wind Energy Association, MNRE
Gamesa
15.3
230.3
312
89.5
Vestas
121.95
175.5
260
N.A
Others
259.7
334.23
259
83.65*
Total
1563.9
2320.28
3163
1700
* Including Vestas
Potential The total potential for wind power in India was first estimated by the Centre for Wind Energy Technology (C-WET) at 45 GW, and was recently increased to 48.5 GW. This figure was also adopted by the Government as the official estimate. At heights of 55 - 65 metres, the Indian Wind Turbine Manufacturers Association (IWTMA) estimates that the potential for wind development in India is around 65 - 70 GW. According to the Ministry of New and Renewable Energy (MNRE), it is estimated that by 2030, installed capacity could reach 191 GW. In the future, a considerable portion of the capacity addition is also expected
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to come from repowering of existing wind farms. This is due to the fact that most high wind energy density sites are already exploited and are occupied (in most cases) by older, low capacity wind turbines. Upgrading these wind farms with latest design as well as promoting the use of more efficient turbines would result in the wind farms seeing higher PLF, thereby aiding in the realization of higher revenue.
Off-shore Wind Segment in India In addition to the on-shore and repowering segments, significant potential exists in the off-shore wind energy sector. According to the Ministry of New and Renewable Energy (MNRE), India is estimated to have 350 GW of off-shore wind energy capacity. Recognizing the importance of off-shore wind energy, MNRE released a draft ‘National Offshore Wind Policy’ in May 2013. The policy draft says that there is a potential of 1 GW, each along the Rameshwaram and Kanyakumari coasts in Tamil Nadu. The policy aims to facilitate off-shore
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wind farms upto 12 nautical miles from the coast. The policy offers several fiscal incentives in the form of a 10 year tax holiday, concessional import duties and certain duty waivers. In August 2013, it was announced that a National Offshore Wind Energy Authority (NOWA) under the aegis of the MNRE would be constituted, that will act as the nodal agency for Off-shore Wind Projects in the country. NOWA will carry out resource assessment and surveys in the Exclusive Economic Zones (EEZ) of the country and simultaneously enter into contracts with project developers for development of off-shore wind energy projects in the territorial waters (12 nm). NOWA will be the single window agency and will coordinate with concerned Ministries/Departments for necessary clearances. However, NOWA will only act as a facilitator for getting clearance and application for clearance will be dealt in entirety by the concerned Ministry/Department.In
Installed Capacity The geographic distribution of wind energy generation capacity is diverse. It can be argued that the geographic distribution of wind power in the country follows the available wind energy potential in the states. For instance, some of the regions with the highest wind energy density (Class 1/Class 2) sites can be found in Tamil Nadu, Gujarat, Rajasthan, Maharashtra and Karnataka. Of these states, almost all available high wind energy sites have been utilized in Tamil Nadu. The state where there is a significant divide between the available potential and installed capacity is Karnataka. Tamil Nadu is the clear leader when it comes to the total wind capacity installed in India accounting for about 38% of the overall installed wind energy capacity as of 31st March 2013. Tamil Nadu is followed by Gujarat, Maharashtra and Rajasthan – three states which have taken significant effort in bolstering their wind capacity. The top 5 states (Tamil Nadu, Gujarat, Maharashtra, Rajasthan and Karnataka)
The year-wise capacity additions since 2006-07 (in MW) 2006-07
State
(Cumulative)
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
Tamil Nadu
3,492.7
3,873.4
4,304.5
4,907.0
5,904.4
6,987.6
7,162.18
Gujarat
636.6
1,252.9
1,566.5
1,864.0
2,175.5
2,966.3
3,174.58
Maharashtra
1,487.7
1,755.9
1,938.9
2,078.0
2,310.8
2,733.3
3,021.85
Rajasthan
469.8
538.8
738.4
1,088.0
1,524.8
2,070.7
2,684.65
Karnataka
821.1
1,011.4
1,327.4
1,473.0
1,730.0
1,933.5
2,135.15
Madhya Pradesh
57.3
187.7
212.8
229.0
275.5
376.4
386.00
Andhra Pradesh
122.5
122.5
122.5
236.0
200.2
245.5
447.65
Kerala
2.0
10.5
27.0
28.0
32.8
35.1
35.10
Others
1.1
1.1
1.1
4.0
-
3.2
4.30
Total (MW)
7,090.8
8,754.2
10,239.1
11,907
14,154
17,351.6
19,051.46
% of Total Installed Capacity
Policy Framework Feed-in-Tariff
Tamil Nadu
Gujarat
Maharashtra
Rajasthan
Karnataka
Madhya Pradesh
Andhra Pradesh
Kerala
Others
Source: MNRE as of 31st March 2013
constitute 95% of the total capacity installed in the country. Maharashtra is slowly gaining ground on Tamil Nadu as most developers observe that the state’s wind zone-based tariff system is conducive for financially viable development of power plants. Furthermore, with payment security sighted as one of the major concerns in Tamil Nadu, developers are moving away from the once home of wind energy to new pastures. However, Tamil Nadu has cleared most of the pending payments, and is once again gaining the confidence of investors. Capacity additions were down by a significant percentage this financial year in some of the leading states such as Tamil Nadu, Gujarat and Maharashtra. But states such as Rajasthan and Karnataka have either seen an increase or stable capacity additions.
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The wind energy capacity additions has been driven primarily through a feed-intariff (FiT) mechanism. The FiT for each state is determined by its respective State Electricity Regulatory Commission (SERC). The various SERCs thus far have adopted a cost-plus approach wherein, the costs associated with setting up a wind power plant such as capital expenses and operational expenses are considered based on discussions with various stakeholders. The FiT is then calculated based on the levelized cost and a fixed profit margin determined by the regulators. One other important aspect considered while setting the wind energy tariff is the capacity utilization factor (CUF). CUF is a function of the site at which the wind turbine is located and as such various regions across a state might have different wind profiles thereby affecting the electricity generated and hence revenues. This has led to some states such as Maharashtra opting for a tariff scheme which is tied to the prevailing wind regime across the various parts of the state leading to what is known as a ‘zone based’ tariff. In this mechanism, the projects in regions with the lowest wind energy density are offered a higher tariff while the highest wind energy density region is given a lower tariff. This ensures that the returns from all projects remain the same and the variance due to wind energy regimes is minimized to a very large extent.
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6 State
Andhra Pradesh
Gujarat
Tariff rates per KWh
Annual tariff escalation
Notes
Rs. 4.70
Constant for 10 years for the PPAs to be signed during 01-05-09 to 31-03-14
Order on 15/11/12
No escalation for 25 years of project life
Order on
Rs. 4.15
Karnataka
Rs. 3.70
Kerala
Rs. 4.77
Madhya Pradesh
Maharashtra
Rs. 5.92
Wind Zone I Rs. 4.86
han
Rs. 5.13 (with AD)
No escalation for 20 years of project life No escalation for 25 years of project life
Order on 26/03/13
No escalation for 13 years
Net tariff including AD benefit
No escalation for 13 years
Tariff without AD benefits
Wind Zone II Rs. 4.93 Wind Zone III Rs. 4.20 Wind Zone IV Rs. 3.78 Rs. 5.31
Punjab
Rs. 5.96 (without AD) Rs. 5.36 (with AD)
No escalation for 25 years. Applicable to wind Power Plants located in Jaisalmer, Jodhpur & Barmer districts No escalation for 25 years. Applicable to wind Power Plants located in districts other than Jaisalmer, Jodhpur & Barmer districts.
Tamil Nadu
Rs. 3.51
No escalation for 20 years of project life
West Bengal
Rs. 4.87
No escalation for 10 years
No escalation for 13 years Wind Zone I
2011-12
2012-13
Change Year -overYear
Tamil Nadu
1,083.20
174.58
-84%
Gujarat
790.80
208.28
-74%
Maharashtra
422.50
288.55
--32%
Rajasthan
545.90
613.95
12%
Karnataka
203.50
201.65
-1%
Madhya Pradesh
100.90
9.60
-90%
Andhra Pradesh
45.30
202.15
346%
Kerala
2.30
-
-100%
Others
3.20
1.10
-66%
Total (MW)
3,197.60
1,699.86
-47%
Generation Based Incentive
2013
Wind capacity additions reached their zenith under the Accelerated Depreciation (AD) regime where wind farm developers were offered fiscal incentives (tax benefits). The incentive offered, allowed for wind farm developers to opt for 80% AD on their assets. This led to a tremendous growth in wind capacity additions. The AD benefit can be credited for single-handedly driving India to the top of the leader boards in the wind sector. Earlier it was suggested that the AD benefit for setting up wind farms would be withdrawn with the introduction of the new direct tax code. However, the AD benefits enjoyed by developers thus far were withdrawn from the financial year 2012-13 i.e. from 1st April 2012 onwards. The impact of the removal of AD is evident as seen from the drastic drop in installations in every major state, except Rajasthan.
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State
(Source: MNRE)
Accelerated Depreciation
Wind Zone IV Rs. 3.24
Orissa
Rs. 5.44 (w it h ou t AD)
07/01/13
Wind Zone III Rs. 3.60
Wind Zone I Rs. 5.67
Rs. 5.18 (without AD) Rs. 4.89 (with AD)
No escalation for 10 years
Wind Zone II RS. 4.23
Maharashtra
Rajast-
The Generation Based Incentive (GBI) scheme was introduced in 2009. The reason behind the introduction of the GBI mechanism was to persuade developers to install wind capacity which would focus on the quantum of electricity generated rather than mere installation of wind turbines to gain the accelerated depreciation benefit i.e. using wind as a financial instrument as opposed to a power source. Thus, the GBI mechanism favoured developers whose wind farms were more efficient. Furthermore, the introduction of the GBI was one of the first steps which indicated that there would be a shift in market dynamics towards a more IPP driven model as the GBI model favoured IPPs who were likely to have higher installed capacities thereby producing a larger quantum of electricity. The scheme offered a GBI of Rs. 0.50 per kWh with a predefined cap of Rs. 62.5 lakhs per MW of the capacity installed. The GBI offered is over and above the tariff offered by each SERC. This however is exclusive of the AD benefit that the wind farm developer would get. Thus, the developer has to make a choice as to whether to go for the AD benefit or avail the GBI. The GBI incentive scheme was available till the end of the financial year 2011-12, i.e. all projects commissioned
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before 31st March 2012 were eligible for GBI provided the developer chose to go through this route. The expiry of the GBI in March 2012 and the consequent non-availability of the incentive also contributed to the huge slump in the sector in 2012-13. The Government of India, acknowledging the importance of the GBI in the growth of the sector, especially after the phasing out of AD benefits, reinstated the GBI from 1st April 2013 and allocated Rs. 800 Crore towards the same. On 1st August 2013, the Union Cabinet of Ministers formally approved the reinstatement of the scheme. The incentive of 50 paise per kWh of electricity generated by wind projects registered under the scheme will continue. The cap of Rs. 62 lakhs per MW has been increased to Rs. 1 Crore per MW, which can be drawn in not fewer than 4 years and not more than 10.
Renewable Purchase Obligations (RPO) In the absence of the AD benefits and GBI, the wind industry’s reliance on the RPO regulations have increased manifold. However, due to the lack of enforcement of RPO in many states, the demand for wind power and for the Renewable Energy Certificates (REC) has not taken off as planned. The prices at which RECs have been traded are at the floor for some time, and the number of unsold RECs has been increasing. In order to provide relief to the renewable energy power producers whose RECs were in the process of expiring due to lack of demand, the Central Electricity Regulatory Commission (CERC) extended the validity of the RECs by 12 months meaning that the RECs are now valid for a period of two years as opposed to the initial period of one year. The status of RPO and REC trading are explained in detail in a separate section.
by the existence of the AD mechanism. With AD being phased out, wind power developers can no longer use installation of WTGs as a financial instrument. Furthermore, the most financially viable wind projects are those under the REC mechanism which favour a higher quantum of energy generation. Such projects typically have capacity additions of a larger scale (on a per project basis). In this scenario, capacity additions are likely to be driven by large scale IPPs as opposed to several small scale developers. The updates from some of the leading developers are given below. Month
Developer
Capacity (MW)
Estimated Project Cost (Rs. Crore
Project Status
August '13
ITC
Not Available
300
Announced
July'13
Reliance Power
45
300
Commissioned
July'13
GAIL
100
Not Available
Announced
July'13
Greenco
250
Not Available
Announced
July'13
Jawaharlal Nehru Port Trust (JNPT)
7
50
Announced
July'13
Surat Municipal Corporation (SMC)
6.3
Not Available
Announced
June'13
Nalco
47.6
283
Commissioned
June'13
SJVNL
47.6
Not Available
Announced
May'13
NLC
50
Not Available
Announced
Paradigm Shift There is no doubt that the market until a couple of years ago has been driven
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May'13
CESC
40
Not Available
Commissioned
May'13
Mytrah
100
Not Available
Announced
May'13
Tata Power
21
Not Available
Commissioned
April'13
Oil India limited
54
Not Available
Commissioned
December'12
Nalco
50 .4
274
Commissioned
November'12
Bhoruka Power Corporation
25.5
180
Commissioned
The shift towards an IPP driven market has also had an impact on the business models of the turbine manufacturers. Initially, all turbine manufacturers in the country offered to undertake EPC services for wind power plants, in addition to providing turbines, as customers expected the turbine manufacturers to install the turbines and connect it to the grid. This is in stark contrast with what is witnessed in the Western markets where the turbine manufacturers merely provide the turbine and support services. With the emergence of large scale wind IPPs in the country, the turbine manufacturers might no longer need to provide the EPC services. IPPs, as opposed to small scale developers, are building in-house expertise for developing as well as installing wind turbines. Further, IPPs would prefer to keep all sourcing/installation tasks under their control as this would help them cut costs significantly. In the future, we are likely to see a transition to the Western model wherein the turbine manufacturers merely provide the turbines and assist in the maintenance of the power plants. The initial phases of such a transition are already evident as the model is evolving.
Consolidation The wind sector has already set in motion the inevitable consolidation, which has resulted in two categories of entities. On one side, there are several business entities that are exiting the wind busi-
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ness. Some of the major companies in this category include TVS Energy, Ashok Leyland, DLF, among others. On the other side, there are IPPs like Green Infra, BLP and Mytrah Energy that are growing or looking to grow through green field projects and through acquisitions of existing wind assets. In August 2013, IDFC backed Green Infra announced the acquisition of 59.75 MW wind assets of TVS Energy. With this sale, TVS Energy exited the sector citing the high capital intensity of the sector. Similarly, DLF sold off a total of 228.7 MW in 4 different states to different buyers. The details are as follows
The fact that the Southern Grid, of which Tamil Nadu is part of, is not synchronised with the rest of the grids compounds the problem. According to the Indian Wind Turbine Manufacturers Association (IWTMA), during the peak wind season from May to September 2013, about 500 MW capacities would be forced to shut down in the Tirunelveli region of Tamil Nadu.
Green Corridor
a.
Karnataka – 11.2 MW sold to Goyal MG Gases for Rs. 30 Crore
b.
Gujarat – 150 MW sold to Bharat Light and Power for Rs. 325 Crore
c.
Tamil Nadu – 34.5 MW sold to Tulip Renewable Power Tech for Rs. 188.7 Crore
The Government of India, acknowledging the importance of evacua tion infrastructure for renewables, has announced the setting up of Green Energy Corridors for transmission of power. The aim is to supply 30 GW of renewable power (solar and wind) to the national grid by 2020. Germany has announced that it will provide financial assistance of Euro One Billion for this project and the Joint Declaration of Intent on Establishment of Green Energy Corridors was signed by the Prime Minister of India and Chancellor of Germany in April 2013.
d.
Rajasthan – 33 MW sold to Violet Green Power for Rs. 52.2 Crore
Forecasting Wind Power Generation
e. Wind assets of VRL Logistics totalling 42.5 MW were purchased by Amplus Infrastructure
In July 2013, the Central Electricity Regulatory Commission (CERC) issued an order to all wind power generators with a capacity of 10 MW or more to forecast their generation for the next day, for every 15 minute interval. The ‘scheduling and forecasting’ order was conceptualised in order to make the grid operations better and reduce instability that may arise out of the fluctuation of power from wind turbines to the grid. If the actual generation is 30 per cent more or less over the submitted forecast, penalties would be imposed. The order is applicable for all wind turbines installed after May 2010.
f.
Madhya Pradesh - 180 MW sold to Continuum Wind Energy for an undisclosed value
Apart from these, Mytrah Energy and Ushdev International have announced intentions to procure operational wind assets.
Way Forward Evacuation The increased capacity addition of wind in the country is unfortunately not matched by an equivalent addition of power evacuation infrastructure. The lack of grid availability during the peak wind seasons is a major problem for the wind power producers, mostly in Tamil Nadu, where technical challenges result in grid congestion. According to the leading IPP Orient Green Power Ltd. (OGPL), the generation of wind power dropped by 15% or more for most companies in November 2012 due to the lack of grid availability.
Wind power producers like Tata Power have mentioned that this ruling will severely affect the profitability of the wind farms. On the other side, CERC has mentioned that the order was released after a two year delay following objections from the wind power producers.
Conclusion The shift from a turbine manufacturer driven-market to an Independent Power Producer (IPP) driven-market accelerated over the past year. The reinstatement of the GBI mechanism not only provides relief to the industry, but also stands to benefit the IPP more than from AD. The RPO/REC mechanism seems to be holding the wind industry up at the moment. As to whether the industry can depend solely on this mechanism remains to be seen. It should be noted that in significant contrast with the solar industry, the wind industry is heavily indigenized. It is estimated that anywhere between 40% to 75% of all components used for the development of a wind turbine/farm are manufactured within the country. The success of the wind industry would then have a direct impact on the economy as the sector has created many jobs along with fostering the growth of various other associated businesses. The sector would continue to do so depending on the growth of the wind market in India. The wind industry is now grappling with some old challenges that are becoming bigger and some new challenges. The increasing power evacuation problem falls in the former category and the need for scheduling and forecasting falls in the latter. While ‘forecasting’ is very important for the industry, a higher level of accurate forecasting might take some more time. Overall, the wind industry is at crossroads. The restoration of the GBI is a boon but it is likely to take a few years for the industry to touch the peak capacity installation in 2011-12. The lacklustre RPO enforcement is also hurting the growth of the sector. The consolidation caused by the downturn in the sector will continue, with many firms exiting the wind business and some entering due to attractive valuations.
The Wind Independent Power Producers Association (WIPPA) filed a petition with the Delhi High Court over the CERC ‘scheduling and forecasting’ order.
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OUTLOOK ON INDIAN REC MARKET Financial year 2012-13 (April 2012 - March 2013) was a lacklustre year for the Renewable Purchase Obligation (RPO) mechanism and for the REC markets. With no enforcement of the RPO in sight by most states, the demand for RECs was quite limited. On the other hand, the number of projects registered under the REC mechanism and the number of RECs issued (supply of RECs) has been increasing at a fast pace, mainly Non-Solar RECs. For Solar RECs, the demand was more than the supply till April 2013. But, the situation has reversed from May 2013. Since the number of RECs were far in excess of the demand, many of the RECs were in danger of expiry. The Central Electricity Regulatory Commission (CERC) stepped in to help the REC generators and extended the validity of RECs from one year to two years in February 2013.
Background Renewable Purchase Obligation As per the Electricity Act of 2003, it is mandatory for Obligated Entities (OEs) to buy a certain percentage of the total energy requirement from renewable energy sources. The RPO targets are set for each state and it is the responsibility of the State Electricity Regulatory Commission (SERC) to enforce the targets. The targets for 2013-14 for each state are given below. States
Andhra
2013-14 RPO Obligation (Non-Solar)
2013-14 RPO Obligation (Solar)
4.75 %
0.25 %
Pradesh Assam
5.40 %
0.20 %
Arunachal Pradesh
5.45 %
0.15 %
Bihar
3.50 %
1.00 %
Chhattisgarh
5.75 %
0.50 %
Delhi
4.60 %
0.20 %
Gujarat
6.00 %**
1.00 %**
Haryana
2.90 %
0.10 %
Himachal Pradesh
10.00 %
0.25 %
J&K
4.75 %
0.25 %
Jharkhand
3.00 %
1.00 %
Karnataka
10.00 % *
0.25 % *
Kerala
3.65 %
0.25 %
Madhya
4.70 %
0.80 %
Maharashtra
8.50 %
0.50 %
Meghalaya
0.60 %
0.4 0 %
Pradesh
Orissa
5.80 %
0.20 %
Punjab
3.37 %
0.13 %
Rajasthan
7.20 %
1.00 %
Tamil Nadu
8.95 %**
0.05 %**
Tripura
0.90 %
0.10 %
Uttara-
5.00 %**
0.05 %**
Uttar Pradesh
5.00 %**
1.00 %**
West
3.90%
0.10 %
Goa & UTs
2.60 %
0.4 0 %
Manipur
4.75 %
0.25 %
Mizoram
6.75 %
0.25 %
Nagaland
7.75 %
0.25 %
low. This price band is valid till March 2017. Non-Solar REC
Solar REC
Floor Price (Rs./REC)
1,500
9,300
Forbearance Price (Rs./REC)
3,300
13,400
khand
Bengal
The table below gives the details of the projects accredited and registered under the REC Mechanism for different renewable energy sources. Source
Accreditation
Registration
Capacity (MW)
Unit
Capacity (MW)
Unit
Wind
2253.18
566
2038.29
534
** RPO targets are not determined for FY14 and are assumed to continue FY13 target levels. * 10% + 0.25% (BESCOM, MESCOM, CESC), 7% + 0.25% for others. (Source: REConnect as of July 2013)
Urban or Muncipal Waste
16
2
0
0
3
1
0
0
Renewable Energy Certificate (REC) Mechanism
Solar Thermal Solar PV
171.68
83
162.68
78
Small
218
25
197.5
23
Others
1.67
1
1.67
1
Geother-
0
0
0
0
Biomass
639.9
65
582.85
60
Bio-fuel
777.87
79
669.3
70
4081.29
822
3652.28
766
REC mechanism is a way by which the obligated entities under RPO can meet their targets. The Renewable Energy generators are issued one Renewable Energy Certificate (REC) for every 1 MWh of power generated. The certificates can then be sold in the exchanges to the obligated entities.
Hydro
The REC trading mechanism was launched in November 2010 and got off to a good start. The RECs were classified into two categories – Solar and Non-Solar RECs, and the trading takes place on the last Wednesday of every month. The trading is done in the power exchanges - Indian Energy Exchange (IEX) and Power Exchange India (PXIL). The price band for the RECs as set by the CERC is given be-
tion
Panchabuta-Renewable Energy & Cleantech in India
mal
cogeneraTotal
(Source: REC Registry of India, as of 23 August 2013) rd
The statewise projects accredited under the REC mechanism as of 23rd August 2013 are given below. The trading dynamics of solar and nonsolar RECs are quite different owing to
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11
the demand and supply differences and the price of RECs.
Buy Bids vs Sell Bids (Non-Solar RECs)
Statewise Accredited Status (Number of Units & Capacity) 23-08-2013 S.No.
Type/ State
Total Unit
Capacity (MW)
1
Tamil Nadu
210
986.56
2
Maharashtra
336
918.8
3
Uttar Pradesh
53
678.13
4
Gujarat
52
418.6
5
Karnataka
29
234.79
6
Rajasthan
46
224
7
Andhra Pradesh
15
130.55
8
Madhya Pradesh
41
110.4
9
Chhattisgarh
9
88.5
10
Punjab
4
66.78
11
Himachal Pradesh
6
47.5
12
Odisha
4
33.9
13
Bihar
5
26.6
14
Nagaland
1
24
15
Uttarakhand
1
24
16
Kerala
2
23.2
17
Jammu and Kashmir (JKSPDCL)
2
17.5
18
Delhi
2
16
Haryana
4
11.5
Total
822
4081.31
19
The reason for the low demand can be directly attributed to the lack of RPO enforcement by most of the states.
Non-Solar REC Traded Volumes The number of non-solar RECs traded from April 2012 to July 2013 is given below. The traded volume as a whole has remained fairly constant, despite the increase in the number of RECs available for sale. The only exception was March 2013, when the REC sales touched an all-time peak. This can be attributed to the fact that March is the end of the financial year and many companies bought RECs to meet with their RPO compliance.
(Source: REC Registry of India)
Non-Solar REC trading One of the major challenges for nonsolar renewable power generators is the ever increasing gap between demand and supply. Till July 2012, the supply and demand were fairly balanced, but since then the number of RECs generated (supply) has been growing at a rapid pace. However, the demand has either fallen or stagnated during the same period. For example, the difference between sell bids (supply) and buy bids (demand) in July 2012 was 306,514. But one year later, in July 2013, the difference between sell bids and buy bids increased by about 8.5 times to 2,610,796. The graph below clearly indicates this trend.
However, this spike in March is an anomaly and the next month, April 2013, saw the number of RECs sold crashing.
Non-Solar REC Price Realisation Since supply of RECs outstripped their demand significantly, the price of RECs
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12
touched the floor price and has remained there for the last 12 months. This situation is unlikely to change in the near future.
Solar REC Trading Unlike non-solar RECs, the supply of solar RECs was less than the demand till April 2013. But from May 2013, the trend appears to have reversed. With more and more solar projects coming up under the REC mechanism, the supply of solar RECs is expected to see a dramatic increase as witnessed in the non-solar REC segment.
Demand Vs Supply (Solar RECs)
since there was not enough supply of RECs. But once that situation reversed, the price of solar RECs started to fall. After hitting a high (Rs. 13,200/REC) in March 2013, the price of solar RECs dramatically dropped to the floor price (Rs. 9,300/REC) within 3 trading sessions by June 2013. For the last three months (June to August 2013), the price has remained at the floor price and it is unlikely to increase any further unless demand for RECs is stimulated by the enforcement of RPO at the state-level.
Conclusion
If the RPO is not enforced properly, solar REC trading will face a situation similar to that faced by non-solar RECs.
Solar REC Traded Volumes The traded volume of solar RECs has followed a path similar to that of non-solar
The RECs (non-solar and solar) have been trading at the floor price over the last few trading sessions on increasing supply leading to a huge supply side fatigue. The key challenge remains the lack of regulatory will to enforce the obligations. With an ever increasing demandsupply spread, the market requires short term and long term interventions to boost the confidence of participants on the supply side. The spot market trading of the REC has not provided enough market liquidity and stakeholders have recommended that bilateral and multilateral trading be permitted. A critical reassessment and repricing of solar REC must be done at the earliest. As regulators enforce compliance and steps are taken to deepen the market mechanism, the REC market should witness renewed interest.
RECs. The number of RECs sold touched an all-time high in March 2013, but dropped again in the subsequent months.
Solar REC Price Realisation Solar REC prices stayed close to the upper limit (forbearance price) till May 2013
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*FY 2012 - 13
14
INDIAN REC MARKET: LOOKING BACK AND LOOKING FORWARD Vishal Pandya is co-founder of REConnect Energy – India’s largest REC Trading company. Today, REConnect manages about 46% market share in Non - Solar RECs and about 80% market share in Solar REC trading. Further, REConnect has also gained significant market share in wind/solar forecasting/scheduling as required under RRF mechanism and is managing such requirements of wind farms across 5 states in India. REConnect is as old as the REC market in India. How has your experience been so far? We were the first company in the market to trade both – solar and non-solar RECs. The changed market dynamics – explosive growth in REC supply and lack of regulatory will to drive demand – has moved REC sellers from the position of privilege to peril. Non-solar RECs are trading at floor price for 12 consecutive months, and now solar RECs are also joining the beleaguered league. Every stakeholder including REConnect on the supply side of REC has been under a lot of stress and fatigue. As a stakeholder, I think we and our clients are just completing a cycle of REC market ‘evolution’. Do you foresee any reprieve for the troubled REC Market? Without any prejudice to our existing stake in the REC market, we firmly believe that it would still be premature to write-off REC market completely as the market is yet to see its best. In our understanding, FY 2013-14 would be the first year where we would see as many as 5-6 state DISCOMs meeting their RPO compliance. Delhi, Maharashtra, Punjab, Karnataka and Chhattisgarh state regulators have already summoned state DISCOMs and captive/open access consumers to meet their past RPOs including current year RPO by this FY. Even if these five states only are to comply with their past and current RPO by FY14, we are looking at a demand of about 38
Lakh non-solar RECs and 4 Lakh solar RECs. This demand alone will be substantial enough to give a big relief to the REC market. What are the key issues that need to be addressed to sustain the REC market? The larger issue is regulatory will, which is largely driven by political motives. Apart from this, there are other softer issues which have made a few regulators jittery about the REC mechanism. For example, in non-solar, REC represents three types of asset classes – projects which will need REC revenue for their absolute viability, projects that need RECs for increased ROI and projects needing RECs for windfall gains. Some rationalist regulators would naturally object against creation of windfall gains at the cost of the consumer. This lack of depth in the framework has created negative sentiments among few regulators. What are the key changes that stakeholders are expecting from the regulators? The framework needs significant changes for its own sustainability. For example, different treatment of different asset classes call for differential REC prices or differential REC multipliers to ensure every project under REC mechanism has been provided a level playing field. The framework shall not create scope for windfall gains. This is absolutely essential for increasing stakeholders’ confidence. Likewise, the liquidity issue needs to be sorted out. The current spot
Panchabuta-Renewable Energy & Cleantech in India
market based trading is not sufficient as it has failed miserably to attract liquidity. If only spot market needs to function, then we must have a multilateral market. Otherwise, bilateral trades of RECs must be introduced along with multilateral trades to ensure better debt structuring and project financing. Do you think failure of RECs will affect India’s growth story in renewables? Whether RECs remain or not, we as a country have a huge RE potential to tap. Today, corporates have become more cost conscious when it comes to energy. With the kind of energy tariffs currently prevailing in the country, in many consumer types, renewable energy is cheaper than the price being offered by distribution companies. Hence, even without RECs, we have a very long term future in renewable sector. However, the key motive behind REC mechanism was to trigger high growth in capacity addition which could have driven down the cost of renewable further. However, the shortsightedness of containing the impact on tariff for near-term is failing the long-term objective of securing low cost future energy supply. Given the current circumstances, we are not far away from seeing every Indian corporate adopting a complete energy portfolio management approach like optimally mixing up energy supply from renewable, energy exchanges and from distribution companies to gain better energy cost economics. We have already got a few clients who have started working in this direction.
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15
Gujarat Solar PV Plants Analysis of one year performance data In this white paper, a total of 50 plants totalling 665.64 MW have been ranked based on their annual yield (MWh/MW). All these plants have been operational for at least 1 year. Of these 50 plants, 15 plants are located in Charanka Solar Park and 35 plants outside Charanka. There is an overall ranking of the 50 plants and a separate ranking each, for plants in Charanka and outside Charanka. The module, inverters, tilt mechanism and EPC details are also available for several plants. But we would like to point out that knowing the module, inverter and EPC details is still not enough to benchmark the plants, because there are other variables that influence the performance of the plant. Some of them include quality of balance of system components (cables, connectors, etc) and build quality. Gujarat signed Power Purchase Agreements (PPAs) towards a total 968.5 MW of installed capacity towards end of 2010 and early 2011. As of 31st March 2013, 77 projects totalling 852.31 MW were commissioned and operational.
Charanka Solar Park The Charanka Solar park is spread over about 2000 Hectares in the wastelands of the Rann of Kutch. The Rann of Kutch is a salt marsh at the edge of Thar Desert, and it borders Pakistan. The total area available can be used to set up solar plants of a total 500 MW capacity. Of this, 214 MW has been installed by 21 developers. (As of 19th April 2012 – Source: GPCL)
Solar Plant performance The sections below aim to quantify the performance of the solar power plants set up in the state of Gujarat. For the purpose of evaluation, the generation data available from the Gujarat State Load Dispatch Centre (SLDC) has been used. Ranking of the power plants has been done on the basis of the Plant Load Factor (PLF) or Capacity Utilisation Factor (CUF). PLF or CUF is calculated as the ratio of actual energy generated (for a given period of time) to the maximum (theoretical) possible generation of a power system. The formula for CUF is given below. Capacity Utilisation Factor (CUF) = Energy measured (kWh) / (365*24*installed capacity of the plant). While the Gujarat Energy Development Agency (GEDA) has shared a list of 77 commissioned projects totalling 852 MW as of March 31st,2013, the SLDC data is available only for 62 projects totalling 832 MW. Since some of the plants have been in operation for less than a year, only those 50 plants that have been operational for at least 1 year have been ranked.
Ranking of Plants operational for at least 1 Year (Overall) : The energy yield of a plant will depend on several factors, including type of modules, inverters and other components, usage of tracking systems, design optimization and build quality. The ranking given below is based only on the energy yield and does not consider the input parameters like design optimisation, components used or build quality. Rank
Developer
1
Konark Gujarat PV Pvt. Ltd.
2
Unity Power
3
Mono Steel (india) Ltd
4
WAA Solar Pvt.Ltd
5
Capacity (MW) 5
Total Generation (MWh)
Normalized (MWh per MW per Year)
CUF
Module Type
Module Manufacturer
Inverter Manufacturer
Tilt
EPC
9361.009
1872.2018
21.3%
Crystalline Si
Vikram Solar
AEG
Seasonal Tilt
Vikram Solar
5
9328.561
1865.7122
21.2%
Thin Film
Solar Frontier
Power One
Fixed Tilt
Enfinity
10
18644.292
1864.4292
21.2%
Crystalline Si
Waaree
Power One
Seasonal Tilt
Waaree
10.22
18461.595
1806.418297
20.6%
Thin Film
First Solar
SMA
Not Available
Madhav Power
Palace Solar Energy Pvt. Ltd.
15
26173.722
1744.9148
19.9%
Crystalline Si
Candian Solar
Power One
Seasonal Tilt
Etain - immodo / Lourex Group
6
TATA Power Renewable Energy Ltd.
25
43393.098
1735.72392
19.8%
Crystalline Si
Tata, Canadian Solar
ABB
Not Available
Tata
7
NKG infrastructure Ltd.
10
17310.26
1731.026
19.7%
Crystalline Si
Solar World
Delta (String)
8
Sun Clean Renewable Pvt. Ltd.
6
10341.53
1723.588333
19.6%
Thin Film
Sharp
Power-one
9
ZF Steering Gear (India) Pvt. Ltd.
5
8598.95
1719.79
19.6%
Thin Film
N/A
10
Roha Dyechem Pvt. Ltd
25
42898.65
1715.946
19.5%
Thin Film
Nex Power
Satoon
Fixed Tilt
Wipro Eco Energy
11
Gppc Pipavav Power Company Ltd.
5
8570.004
1714.0008
19.5%
Crystalline Si
Suntech
Bonfiglioli
Fixed Tilt
Lanco
12
AZURE (Hariyana)
10.2
17401.797
1706.058529
19.4%
Crystalline Si
Suntech
13
Alex Astral Power Pvt. Ltd
25
42530.899
1701.23596
19.4%
Thin Film
First Solar
SMA
14
Green Infra Solar Energy Ltd.
10
17012.341
1701.2341
19.4%
Thin Film
First Solar
SMA
Fixed Tilt
Juwi
15
Solarfield Energy Pvt. Ltd.
20
33948.276
1697.4138
19.3%
Thin Film
Sharp
Sharp
Fixed Tilt
L&T
16
Welspun Urja Gujarat Pvt. Ltd.
15
25458.575
1697.238333
19.3%
Thin Film
First Solar
SMA
Fixed Tilt
Conergy (Sun Technics)
17
SEI Solar Power Gujarat Pvt. Ltd.
25
42415.609
1696.62436
19.3%
Crystalline Si
Chin/Trina
Power One
Fixed Tilt
L&T
18
BACKBONE Enterprises Ltd.
5
8452.757
1690.5514
19.2%
Thin Film
Nexpower
Siemens
Not Available
Self
19
Millenium Synergy (Gujarat) Pvt. Ltd.
10
16870.807
1687.0807
19.2%
Crystalline Si
Trina
SMA
Single Axis
L&T
20
ACME Solar Technology
15
25180.906
1678.727067
19.1%
Thin Film
First Solar
ABB
Fixed Tilt
M+W
21
ESP Urja Pvt. Ltd.
5
8345.851
1669.1702
19.0%
Thin Film
Sharp
SMA
22
PLG Photovoltic Ltd.
20
33140.469
1657.02345
18.9%
Crystalline Si
PLG / Kyocera
Power One
Fixed Tilt
Zamil Group
23
ICML
9
14802.466
1644.718444
18.7%
Crystalline Si
LDK
IDS
24
GMR Gujarat Solar Power Pvt. Ltd.
25
40983.17
1639.35268
18.7%
C-Si
Canadian Solar
SMA
Fixed Tilt
Indu Project (Cirus)
25
GHI Energy Pvt. Ltd.
10
16336.161
1633.6161
18.6%
Crystalline Si
Suntech
26
Emami Cement Ltd
10
16310.494
1631.0494
18.6%
C-Si
TATA BP
ABB
Fixed Tilt
Tata BP
PPS Enviro Power Fixed Tilt
L&T
Self Cirus Solar
16
27
Moser Baer Energy & Development Ltd.
15
24456.697
1630.446467
18.6%
Thin Film
First Solar, Moserbaer, Oupont
SMA
Not Available
Moser Baer
28
Precious Energy Services Pvt. Ltd.
15.2
24719.672
1626.294211
18.5%
Thin Film
First Solar, Moserbaer, Oupont
SMA
Not Available
Moser Baer
29
Azure Power (Gujarat) Pvt. Ltd.
5
8078.944
1615.7888
18.4%
Thin Film
First Solar
SMA/Poweron
Not Available
30 31
AEL(Solar) - Adani
40
64331.765
1608.294125
18.3%
Thin Film
Sunwell / Sunner Well
SMA
Fixed Tilt
Aries Waaree
Solitaire Energies Pvt. Ltd.
15
24100.389
1606.6926
18.3%
Thin Film
First Solar, Moserbaer
N/A
Not Available
Moser Baer
32
Sand Land Real Estate Pvt. Ltd.
25
40061.177
1602.44708
18.2%
Thin Film
First Solar
SMA
Fixed Tilt
Moser Baer
33
GPCL
5
7947.638
1589.5276
18.1%
c-Si
C-Sun
34
GMDC
5
7930.4
1586.08
18.1%
Crystalline Si
Tata BP
Power One
Fixed Tilt
Tata BP
35
Surana Telecom & Power Ltd.
5
7914.732
1582.9464
18.0%
c-Si
Surana
AEG
Fixed Tilt
Self
36
LANCO (BHRD)
5
7821.247
1564.2494
17.8%
Crystalline Si
N/A
Hellos Systems
37
EMCO Ltd
Ingeteam
38
Visual Percept Solar Projects Pvt. Ltd.
39
GIPCL
40
5
7787.114
1557.4228
17.7%
Crystalline Si
Trina
25
38359.028
1534.36112
17.5%
Crystalline Si
Hanwha Solarone
Power One
5
7626.817
1525.3634
17.4%
Crystalline Si
Titan
ABB
Louroux Bio Energies Ltd.
25
37676.577
1507.06308
17.2%
Thin Film
Tianwel and Sungen
41
Hiraco Renewable Energy Pvt. Ltd.
20
29567.821
1478.39105
16.8%
Crystalline Si
42
Ganeshvani Merchandise Pvt. Ltd.
5
7241.912
1448.3824
16.5%
Crystalline Si
43
CBC Solar Technologies Pvt. Ltd
10
14225.313
1422.5313
16.2%
44
AES Solar Energy Gujarat Pvt. Ltd
14.92
20896.17
1400.544035
45
Jaihind Project
5
6878.733
1375.7466
46
Lanco infratech ltd.
15.01
20432.741
47
Solar Semiconductor Power Company
20
48
Lanco (Chandiyana)
49
Arvali Infapower ltd.
50
Gangesh Green Energy Pvt. Ltd. Total
Lanco
Fixed Tilt
Sterling and Wilson
Siemens
Fixed Tilt
Inspira Martifer
Hanwha Solarone
SMA
Fixed Tilt
Moser Baer
Trina
Bonfiglioli
Fixed Tilt
Insolare Energy Pvt. Ltd.
Crystalline Si
Trina
Bonfiglioli
Not Available
Moser Baer
15.9%
Thin Film
First Solar
Power Oner
Fixed Tilt
Enfinity
15.7%
Crystalline Si
Nantong
Helofax
Fixed Tilt
Self
1361.275217
15.5%
Crystalline Si
C-Sun
Bonfiglioli
Fixed Tilt
Self
26205.372
1310.2686
14.9%
Thin Film
Sunwell
Santerno
Fixed Tilt
Self
15.01
19096.039
1272.221119
14.5%
Crystalline Si and Thin Film
Trina/Dupont/CSUN
Bonfiglioli, Elt ek, REFUSol
Fixed Tilt
Self
5
5529.347
1105.8694
12.6%
Crystalline Si
LDK
Eltek
Fixed Tilt
Moser Baer
25.08
26947.408
1074.458054
12.2%
Thin Film
First Solar
SMA
Fixed Tilt
Not Available
665.64
(Note : Plants operational in the Charanka Solar Park are highlighted in yellow) From the above list, it can be seen that Konark Gujarat PV Pvt Limited comes first overall, and it narrowly edges its nearest rival, possibly due to its seasonal tilt mechanism. Among plants with fixed tilt mounting structures, Unity Power (Welspun) is the number one, with a CUF of 21.2%. A word of caution here – the ranking above is not an indicator of how good or bad a component or EPC is. The CUF will depend on some more factors like build quality, Balance of Systems used (cables, structures, etc) and design optimization.
Ranking of Plants operational for at least 1 Year (Charanka Solar Park) Rank
Developer
Capacity (MW)
Total Generation (MWh)
Normalized (MWh per MW per Year)
1
Palace Solar Energy Pvt. Ltd
15
26173.72
1744.9148
2
NKG Infrastructure Ltd
10
17310.26
CUF
Module Type
Module Manufacturer
Inverter Manufacturer
Tilt
EPC
19.9%
Crystalline Si
Candian Solar
Power One
Seasonal Tilt
Etain - Immodo / Lourex Group
1731.026
19.7%
Crystalline Si
Solarworld
Delta (String) Power - One
Fixed Tilt
L&T
PPS Enviro Power
3
Sun Clean Renewable Pvt. Ltd.
6
10341.53
1723.588333
19.6%
Thin Film
Sharp
4
ZF Steering Gear (india) Pvt. Ltd.
5
8598.95
1719.79
19.6%
Thin Film
N/A
5
Roha Dyechem Pvt. Ltd.
25
42898.65
1715.946
19.5%
Thin Film
Nex Power
Satcon
Fixed Tilt
Wipro Eco Energy
Fixed Tilt
Lanco
6
GPPC Pipavav Power Company Ltd.
5
8570.004
1714.0008
19.5%
Crystalline Si
Suntech
Bonfiglioli
7
Alex Astral Power Pvt. Lt.d
25
42530.899
1701.23596
19.4%
Thin Film
First Solar
SMA
8
Solarfield Energy Pvt. Ltd.
20
33948.276
1697.4138
19.3%
Thin Film
Sharp
Sharp
Fixed Tilt
L&T
9
SEI Solar Power Gujarat Pvt. Ltd.
25
42415.609
1696.62436
19.3%
Crystalline Si
Chint/Trina
Power One
Fixed Tilt
L&T
10
GMR Gujarat Solar Power Pvt. Ltd.
25
40983.817
1639.35268
18.7%
c-Si
Canadian Solar
SMA
Fixed Tilt
Indu Project (Cirus)
11
Emami Cement Ltd
10
16310.494
1631.0494
18.6%
c-Si
TATA BP
ABB
Fixed Tilt
TATA BP
12
GPCL
5
7947.638
1589.5276
18.1%
c-Si
C-Sun
13
Surana Telecom & Power Ltd
14
AES Solar Energy Gujarat Pvt. Ltd.
15
Lanco Infratech Ltd. Total
Cirus Solar
5
7914.732
1582.9464
18.0%
c-Si
Surana
AEG
Fixed Tilt
Self
14.92
20896.117
1400.544035
15.9%
Thin Slim
First Solar
Power One
Fixed Tilt
Enfinity
15.01
20432.
1448.3824
16.5%
Crystalline Si
C-Sun
Bonfiglioli
Fixed Tilt
Self
210.93
17 In case of Charanka, Palace Solar has the highest CUF, very closely followed by NKG Infrastructure and Sun Clean Renewables.
Ranking of Plants operational for at least 1 Year (Outside Charanka Solar Park) Rank
Developer
Capacity (MW)
1
Konark Gujarat PV Pvt. Ltd.
2
Unity Power
3
Mono Steel (india) Ltd.
4
WAA Solar Pvt. Ltd.
5
TATA Power Renewable Energy Ltd.
6
Azure (Hariyana)
7
Green Infra Solar Energy Ltd.
8
Welspun Urja Gujarat Pvt. Ltd.
9
BACKBONE Enterprises Ltd.
10
Millenium Synergy (Gujarat) pvt.Ltd.
10
16870.807
1687.0807
19.2%
Crystalline Si
Trina
SMA
Single Axis
L&T
11
ACME Solar Technology
15
25180.906
1678.727067
19.1%
Thin Film
First Solar
ABB
Fixed Tilt
M+W
12
ESP Urja Pvt. Ltd.
13
PLG Photovoltic Ltd.
Fixed Tilt
Zamil Group
14
ICML
5
Total Generation (MWh)
Normalized (MWh per MW per Year)
CUF
Module Type
Module Manufacturer
Inverter Manufacturer
Tilt
EPC
9361.009
1872.2018
21.3%
Crystalline Si
Vikram Solar
AEG
Seasonal Tilt
Vikram Solar
5
9328.561
1865.7122
21.2%
Thin Film
Solar Frontier
Power One
Fixed Tilt
Enfinity
10
18644.292
1864.4292
21.2%
Crystalline Si
Waaree
Power One
Seasonal Tilt
Waaree
10.22
18461.595
1806.418297
20.6%
Thin Film
First Solar
SMA
Not Available
Madhav Power
25
43393.098
1735.72392
19.8%
Crystalline Si
Tata, Canadian Solar
ABB
Not Avaliable
Tata
10.2
17401.797
1706.058529
19.4%
Crystalline Si
Suntech
10
17012.341
1701.2341
19.4%
Thin Film
First Solar
SMA
Fixed Tilt
Juwi
15
25458.575
1697.238333
19.3%
Thin Film
First Solar
SMA
Fixed Tilt
Conergy (Sun Technics)
5
8452.757
1690.5514
19.2%
Thin Film
Nex Power
Siemens
Not Available
Self
Self
5
8345.851
1669.1702
19.0%
Thin Film
Sharp
SMA
20
33140.469
1657.02345
18.9%
Crystalline Si
PLG / Kyocera
Power One
9
14802.466
1644.718444
18.7%
Crystalline Si
LDK
IDS
15
GHI Energy Pvt. Ltd.
10
16336.161
1633.6161
18.6%
Crystalline Si
Suntech
16
Moser Baer Energy & Development Ltd
15
24456.697
1630.446467
18.6%
Thin Film
First Solar, Mosebaer, Dupont
SMA
Not Available
Moser Bear
17
Precious Energy Services Pvt. Ltd.
15.2
24719.672
1626.294211
18.5%
Thin Film
First Solar, Mosebaer, Dupont
SMA
Not Available
Moser Bear
18
Azure Power (Gujarat) Pvt. Ltd.
5
8078.944
1615.7888
18.4%
Thin Film
First Solar
SMA/PowerOn
Not Available
19
AEL (Solar) - Adani
40
64331.765
1608.294125
18.3%
Thin Film
Sunwell/ Sunner Wel
SMA
Fixed Tilt
Aries Waaree
20
Solitarire Energy Pvt. Ltd.
15
24100.389
1606.6926
18.3%
Thin Film
First Solar, Moserbaer
N/A
Not Available
Moser Baer
21
Sand Land Real Estate Pvt. Ltd.
25
40061.177
1602.44708
18.2%
Thin Film
First Solar
SMA
Fixed Tilt
Moser Baer
22
GMDC
5
7930.4
1586.08
18.1%
Crystalline Si
Tata BP
Power One
Fixed Tilt
Tata BP
23
LANCO(BHRD)
5
7821.247
1564.2494
17.8%
Crystalline Si
N/A
Hellios System
24
EMCO Ltd.
25
Visual Percept Solar Projects Pvt. Ltd.
26
GIPCL
27
5
7787.114
1557.4228
17.7%
Crystalline Si
Trina
Ingeteam
25
38359.028
1534.36112
17.5%
Crystalline Si
Hanwha Solarone
Power One
5
7626.817
1525.3634
17.4%
Crystalline Si
Titan
ABB
Louroux Bio Energies Ltd.
25
37676.577
1507.06308
17.2%
Thin Film
Tianwei and Sungen
28
Hiraco Renewable Energy Pvt. Ltd.
20
29567.821
1478.39105
16.8%
Crystalline Si
29
Ganeshvani Merchandise Pvt. Ltd.
5
7241.912
1448.3824
16.5%
30
CBC Solar Technologies Pvt.Ltd.
10
14225.313
1422.5313
31
Jaihind Project
5
6878.733
1375.7466
32
Solar Semiconductor Power Company
20
26205.372
33
Lanco (Chandiyana)
15.01
34
Arvali infrapower Ltd.
35
Gangesh Green Energy pvt. Ltd. Total
Lanco
Fixed Tilt
Sterling and Wilson
Siemens
Fixed Tilt
Inspira Martifier
Hanwha Solarone
SMA
Fixed Tilt
Moser Baer
Crystalline Si
Trina
Bonfiglioli
Fixed Tilt
Insolare Energy Pvt. Ltd.
16.2%
Crystalline Si
Trina
Bonfiglioli
Not Available
Moser Baer
15.7%
Crystalline Si
Nantong
Helofax
Fixed Tilt
Self
1310.2686
14.9%
Thin Film
Sunwell
Santerno
Fixed Tilt
Not Available
19096.039
1272.22119
14.5%
Crystalline Si and Thin Film
Trina/Dupont/CSUN
Bonfiglioli, Eltek, REFUSOL
Fixed Tilt
Self
5
5529.347
1105.8694
12.6%
Crystalline Si
LDK
Eltek
Fixed Tilt
Moser Baer
25.08
26947.408
1074.458054
12.2%
Thin Film
First Solar
SMA
Fixed Tilt
Not Available
454.71
Incidentally, the first 4 top ranking plants in the entire state of Gujarat are outside Charanka Solar Park.
Seasonal Characteristics The seasonal variation graph represented below has been rendered using data from power plants which have completed one year of operation. All numbers in the graph have been normalized to the total MWh generated per MW of installed capacity. The plant with the best performance characteristics, M/s Konark Gujarat Pvt Ltd, had a peak monthly production of 189.95 MWh/MWp in May 2012. Though this is not a characteristic of all the plants in the sample set, a vast majority had peak production that fell in one of three months – March, April or May. The highest individual peak generation recorded was 216.39 MWh/MWp by M/s Backbone Enterprises Ltd in the month of May 2012 but the annual production of this plant was lower than the top ranking power plant.
18 The lowest generation is merely presented here to provide a representation of the lowest performance and should not be treated as the general performance of power plants in Gujarat. It can be clearly seen that the average performance closely follows the generation characteristic of the best performing power plant in the sample set. The average annual performance is estimated to be 1581.78 MWh/MWp.
Seasonal Characteristics – Charanka The seasonal variation for plants in Charanka is presented below. The performance of the highest rated power plant can be taken as representative of the performance of all the power plants in the Charanka Solar Park as the difference between the average value and the highest generation is minimal. Peak power output from the solar park was produced in the month of May as opposed to the three month spread seen in the above scenario. Additionally, a secondary peak is seen in the month of October which is slightly lower than the production numbers in May. The best performing power plant, M/s Palace Solar Energy Pvt. Ltd., had a peak generation of 172.63 MWh/MWp in the month of March 2013 while the highest recorded generation for a given month is 179.76 MWh/MWp also generated in the same month by M/s ZF Steering Gear (India) pvt. ltd. Interestingly, though the plant with the lowest CUF (M/s Lanco Infratech Ltd) produced significantly lower output in the first few months of operation, the yield caught up during the latter part of the year indicating that the plant was experiencing teething issues. It is likely that when the data for the next year is compiled, the lowest performance numbers would be more in line with the average and that the degree of variation between the highest and lowest numbers would be minimal. The average yield per year is estimated to be about 1643.28 MWh/MWp, which is comparatively higher than the average yield seen across the state of Gujarat (non-Charanka average).
Crystalline Silicon vs. Thin Film Technologies To identify the difference between the choice of the module makes, we looked at the performance of power plants within the same region (only plants in the Charanka Solar Park were chosen) so as to minimize the variations that may be attributed to external factors such as irradiation conditions, grid availability etc. In addition to this, the Charanka solar park has an almost even distribution between c-Si and TF installed capacity. While analysing the results, it can be seen that the TF modules perform marginally better than the c-Si modules with an average performance advantage of about 0.4%. Looking at the seasonal variation characteristics of the plants (refer image below), it is easy to spot the difference. Plants using TF modules have higher generation than plants using c-Si modules in hotter months (April to July) while c-Si modules have higher generation in colder months (December to February) which can be attributed to the lower temperature derating coefficient of TF modules compared to c-Si modules (which have a comparatively higher temperature coefficient). We would however like to emphasise that the data is not sufficient enough to say one technology is better than the other.
String inverter vs. Central inverter Continuing in the similar vein of the TF vs c-Si discussion, we did a brief analysis of the performance of string inverters compared to central inverters. It should be noted that the sample set available for string inverters is minimal and limited to just one in the Charanka solar park. With this in mind, the average performance of the top central inverter plants was compared to the performance of the solitary string inverter plant. The only real observation which can be made from this comparison is that the string inverters offer better performance in the winter as opposed to central inverters which can be attributed to the fact that the solar park using string inverters has more MPPTs and hence a better MPPT window when compared to plants using central inverters.
Conclusion Of the 50 plants for which performance data is available for at least one year, the annual Capacity Utilisation Factor (CUF) for 70% of the plants is above 18%. The top 3 plants had CUFs of more than 21%. In case of Charanka Solar Park, most of the plants have an annual CUF of more than 18%. One very interesting insight that can be drawn from the performance ranking is that the right component selection is a necessary, but not sufficient condition for the optimal performance of a plant. One inference that could be drawn is that a developer should pay equal attention to the selection of the balance of system components, ensure design optimisation and select the right EPC contractors who can ensure build quality and high plant uptimes. Another aspect that could have an impact on the plant CUFs is the Operation and Maintenance (O&M) of the plants. A plant that has a very good performance monitoring system (remote monitoring or local SCADA) and is well maintained will obviously lead to higher generation. In terms of PV module technology selection, the difference in plant performance of crystalline Silicon and Thin Film technologies has been found to be very minor. In order to draw any conclusion, we will have to wait for longer term performance of the plants and also get additional plant information like plant design, BOS components used, O&M practices, among others. The Central vs String Inverter debate is also inconclusive since we could compare the performance of only 2 plants, each using one of the inverter topologies (Central or string). To conclude, the plant performance data made available by the State of Gujarat has been providing some very valuable insights into the PV plant performance which will help increase the confidence of the investor community on the technical aspects of the solar PV plant. It also helps other states in the formulation and execution of their policies and regulations. RESolve Energy Consultants would once again like to acknowledge the work done by Mr. Jigneshbhai Shah and M/s Movya Consultancy Pvt. Ltd, Ahmedabad, India, which have been used in this report.
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OUTLOOK ON INDIAN SOLAR SECTOR After entering the 1 GW club in 2012, India is all set to join the countries with more than 2 GW capacity by the end of 2013. As of 31st July 2013, India had a total grid connected capacity of 1,839 MW (Source: MNRE). While the solar policy of Gujarat was the engine for the growth of the sector to reach the 1 GW stage, the JNNSM Phase I was instrumental in reaching the 2 GW milestone. The JNNSM Phase II and the solar initiatives by various states will drive the future growth of the sector.
Solar Growth Drivers in India Even though the 2 GW capacity is miniscule in the 100 GW installed capacity globally, India is considered a natural market for solar because i.
India has one of the highest irradiation levels in the world
ii.
The peak power deficit in the country - according to the Central Electricity Authority (CEA), the country
is expected to experience energy shortage of 6.7% and peak shortage of 2.3% for the year 2013-14 The Solar Resource map which depicts the GHI data is given below.
Policy and Regulatory Framework In India, the growth of the solar sector is driven mainly by the policies at the central and the state government level.
In addition to policies, regulations in the form of Renewable Purchase Obligation (RPO) also play a key role in the growth of the sector.
Jawaharlal Nehru National Solar Mission (JNNSM) The Ministry of New and Renewable Energy (MNRE)’s flagship programme is the JNNSM. Since its launch in 2009, JNNSM has been the key driver of the growth of the Indian solar industry. The mission stipulates installation targets of 20 GW of grid-connected and 2 GW of offgrid solar power by 2022 (both PV and CSP) to be completed in three phases. • Phase I - (2009-13) 1,000-2,000 MW • Phase II - (2013-17) 4,000-10,000 MW • Phase III - (2017-22) 20,000 MW
Phase I In the first of its three phases, from 2010 to 2013, the government incentivized the construction of 1,000 MW of gridconnected power plants. Both PV and CSP based solar installations are given equal precedence with 500 MW of capacity being allocated for each technology. The projects under Phase I fall into three categories •
Projects under migration scheme
•
Projects allotted under the Rooftop PV & Small Solar power Generation Programme (RPSSGP)
•
Projects allotted through NTPC Vidyut Vyapar Nigam (NVVN)
For the first batch of projects allotted through the NVVN which commenced in late 2010, as many as 333 project developers had put forward bids worth 1,815 MW for 150 MW of PV projects. As
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the volume of developers interested in solar projects was much higher than anticipated, the government opted to go for a competitive reverse bidding process so that all developers were given an equal chance. Developers that offered the highest discount on the initial tariff of Rs. 17.91/kWh would be given preference and allotted projects until the 150 MW of capacity (for solar PV) was filled. The competitive bidding process resulted in developers placing highly competitive bids. The rates quoted by the winners were in the range Rs. 10.9 to 12.7/kWh for solar PV as a result of which tariffs fell by around 30% to an average of Rs. 11.8/kWh. Subsequently, the guidelines for Phase I Batch II of the solar PV allocations were announced in early August 2011 with the bidding process coming to a close on 3rd December 2011. The result of this round of bidding was even more startling than the first. The tariffs quoted in this round of bidding ranged between Rs. 7.49/kWh to Rs. 9.44/kWh. The bidding for Batch II clearly indicated a sharp decline in the solar tariffs across the countr y. The lowest bid of Rs. 7.49/ kWh by Solairedirect sent shockwaves across the industry. Though the industry expected a drop in tariff, a fall of this magnitude was not foreseen. The average tariff quoted fell by about 25% to Rs.8.88/kWh as developers and EPCs started coming to grips with the nuances of the solar PV sector. A total of 1,152 MW were allotted by the MNRE in the Phase I of JNNSM. The details are given below.
CSP Projects through Migration scheme
30
RPSSGP (PV)
98.05
Total
802.05
The breakup between PV and CSP for the states is as follows. Proposed share of Solar PV & Solar thermal and Central/State during Phase II
Batch II PV Projects through NVVN
350
Grand Total
1152.05
Of these allotted projects, a majority of the PV plants have been commissioned. But under CSP, only 52.5 MW capacity has been commissioned.
Ratio
Central Schemes
State Schemes
Solar PV
70%
40%
60%
Solar Thermal
30%
40%
60%
(Source: MNRE)
Proposed share of target capacity mix
Phase II The MNRE released the draft guidelines for the JNNSM Phase II. Some of the salient features are as follows a. Target for Phase II (2012-17) – 10 GW cumulative capacity addition in utility scale and 1 GW in off-grid. Of this, 4 GW will be under the central scheme and 6 GW under the various state initiatives. The 6 GW under the state initiatives will be met by the enforcement of Renewable Purchase Obligations (RPO).
Technology
Technology
Capacity (MW)
Central Schemes (MW)
State Schemes (MW)
Solar PV
6300
2520
3780
Solar Thermal
2700
1080
1620
Total
9000
3600
5400
(Source: MNRE)
b. Financing – Implementation of Phase II will have to rely upon a combination of various schemes like Generation Based
Timeline for achieving the targets (in MW) under the central scheme 2012-13
2013-14
2014-15
100
100
2015- 16
2016-17
Total
Rooftop & Small Solar PV
200
Bundling PV
800
800
VGF Phase I
Projects Allotted (MW)
Batch I PV Projects through NVVN
150
Batch I CSP Projects through NVVN
470
PV projects under Migration scheme
54
PV
750
Thermal Total PV Total Thermal Grand Total
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1650
770
1520
1080
1080
870
2520
1080
1080 3600
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Incentive (GBI), Viability Gap Funding (VGF) and Bundling schemes. i. Bundling – The target under bundling will be finalised based on deliberations with Ministry of Power (MoP), but it is unlikely to be significant due to the limited availability of conventional power from unallocated central quota. ii. GBI – Total target will be 60 MW. Only states that did not get allotment under the first phase of the GBI scheme will be eligible for this scheme. GBI assistance from the MNRE will be about Rs. 2-3/kWh. iii. VGF – This will be the most prevalent mechanism under Phase II. Under this option, bidders would bid for viability gap funding requirement in Rs/MW and the bidder with minimum VGF requirement would be selected. c. Rooftop installations – Target of 1 GW through both grid-connected and offgrid rooftop systems. d. Domestic content requirement – Several options are explored, but a final decision has not been made yet. f. Off-grid systems - The upper limit for off-grid systems eligible for subsidy has been increased to 500 kWp.
Phase II allocation under Viability Gap Funding (VGF) With the unallocated electricity quota under Phase I of JNNSM no longer available and the fact that NVVN (NTPC) is no longer the procurer of solar electricity under the JNNSM, MNRE has established the Solar Energy Corporation of India (SECI) for handling the power procurement from the second phase of the JNNSM. In this scenario however, SECI’s role would be limited to providing an upfront subsidy known as Viability Gap Funding (VGF) which is basically a part payment made by SECI to the project developer in order to make the project viable. In this scenario, the developer opting for the lowest amount of funding to bridge
the gap would be chosen first and so on. This is a new form of reverse bidding wherein the developer would no longer quote the electricity tariff but the quantum of money required to make the project “viable”. In view of this, MNRE has released the draft guidelines for the first phase of second batch under JNNSM for setting up of 750 MW of solar capacity. Some of the information presented in the draft document is highlighted below.
• Payment security – SECI would set up a payment security corpus from the encashment of bank guarantees, interest earned on this fund, incentives for early payment, the extra money coming from 10% lower tariff to developers claiming AD and grants from Government/National Clean Energy Fund (NCEF). This fund would cover three months of payment to the project developer.
• Total capacity – 750 MW
State Policy Scenario
- Min capacity – 10 MW - Max capacity – 50 MW - All projects to be allocated in multiples of 10 MW - Max allocation per bidder or company – 100 MW • Tariff – The tariff would be fixed at R s .5. 45/ kW h for 25 year s or R s. 4.95/ kW h (with AD benefit) • Upper limit of VGF – 30% of project cost or Rs. 2.5 Crores/MW whichever is lower • Equity contribution – At least Rs. 1.5 Crores/MW • Timeline for VGF disbursal - 25% at time of delivery of at least 50% of major equipment (modules, inverters, mounting structures, switchgear and transformer) on site - 50% after full commissioning - 25% after one year of successful operation • Domestic content requirement – it has only been stated that 75% percentage of the solar capacity would be reserved for projects with domestic content while the rest of the projects would be free to procure components from any country. DCR would mean that both the solar cells and modules would have to be manufactured in India. • Financial closure – within 180 days of signing PPA
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As per the JNNSM Phase II guidelines, 60% of the targeted capacity will be through state policies. Each state has to meet its own Renewable Purchase Obligations (RPO) leading them to come up with solar initiatives. Two states had been pioneers in announcing and implementing their respective state policies - Gujarat and Karnataka. Of these, the Gujarat state policy is the one that is both aggressive and ambitious, with Gujarat looking to add close to 1 GW of solar PV in the coming years. On the other hand, even though Karnataka had announced its policy and also completed the first round of allocations, projects are yet to be commissioned. In addition to these two states, several other states have announced solar policies that are either in draft stages or under advanced stages of implementation including Madhya Pradesh, Tamil Nadu, Uttar Pradesh, Punjab and Andhra Pradesh.
Gujarat State Policy The state of Gujarat was the first Indian state to launch its own solar policy in 2009, showing significant foresight with regards to the promise that solar holds for the future of energy generation in the country. The current policy is operative until 2014. The initial target was to achieve an installed capacity of 500 MW. However, given the interest from a large number of developers and a likelihood that a significant number of the initial projects might not materialize, the government allocated projects totalling 968.5 MW capacity. As of 31st July 2013, Gujarat had a solar installed capacity of 857 MW and contributed to almost half of all the installations in the country.
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The Gujarat Solar Policy is the only policy in the country, which has awarded projects with a fixed FiT, on a first-come firstserve basis. In view of this and the fact that there weren’t too many restrictions imposed on developers, the amount of interested parties who were allotted projects was significant. This laid the foundation for the meteoric rise of Gujarat as a hub for solar projects in the country.
Madhya Pradesh
Awarded - 200 MW, 130 MW expected to be commissioned by September 2013.
Tamil Nadu
Announced - 3000 MW (by 2015), first round of bidding for 1000 MW was done in January 2013. LOIs issued for 690 MW
Andhra Pradesh
Announced - 1000 MW, Bidding process complete. LOI issued.
Kerala
Announced 500 MW (by 2017)
signed so that higher rates are offered
Bihar
Announced 150 MW
during the first 12 years of the proj-
Punjab
Announced - 1000 MW (by 2022) - Bids invited 300 MW in 2013 and 251 MW of projects allotted
The tariff structure has been de-
ect, with lower rates from the 13th year onwards. This has a positive influence on cash flows as debt repay-
Uttar Pradesh
ment usually occurs within the first 12 years of operation of the power
Announced - 500 MW target by 2017. 250 MW of projects allotted
Since no new project allocations in Gujarat have been announced, a shift in the market towards other regions such as Andhra Pradesh, Maharashtra, Tamil Nadu and Madhya Pradesh could be expected.
Steps Forward RPO Driven Market All the states have come up with their own state policies specifically to meet the Renewable Purchase Obligations. The state of Tamil Nadu has also proposed a separate Solar Purchase Obligation (SPO) in addition to the RPO.
(Source: MNRE and other state policy documents)
The factors that would drive the success of this segment are
with regards to debt repayment con-
Geographical Distribution
•
sidering the fact that solar was much
The nation’s flagship solar policy, the Jawaharlal Nehru National Solar Mission (JNNSM), and the policy of the state of Gujarat which was implemented in two phases have been instrumental in kickstarting the sector. About 1 GW of projects were allotted under each of these two policies. Interestingly, a majority of solar projects under the JNNSM came up in the state of Rajasthan due to the high irradiation and availability of inexpensive arid land.
The effective enforcement of the RPO regulations
•
The financial health of the state utilities
plant which helps alleviate some of the concerns that developers have
more capital intensive compared to competing technologies.
Other State Policies Following the success of the prevalent state policies, numerous other states followed suit, driven both by the need to bridge the demand-supply gap in power generation as well as the mandate to fulfil their Renewable Purchase Obligation. A brief summary of these state policies is provided below. State
Status of solar in state
Gujarat
Announced - 968.5 MW, Commissioned - 857 MW
Maharashtra
Announced - 205 MW, Commissioned - 40 MW (Setup in Rajasthan), (In addition, 125 MW commissioned by Mahagenco)
Karnataka
Commissioned - 8 MW, Plans for 600 MW; Bids invited - 80 MW in Round 1 and 130 MW in Round 2
Rajasthan
Announced 200 MW, First round of allocation of 75 MW complete
Odisha
Awarded - 25 MW, Announced - 50 MW
Naturally, a vast majority of grid-connected solar projects have been commissioned in these two states. Of the total 1,839 MW commissioned as of July 2013, Gujarat has 857 MW (47% of the total) and Rajasthan has about 608.5 MW (33%). Together, the two states constitute 80% of the total capacity in the country. The capacity addition in the other states are mainly due to the projects that were commissioned under the National Solar Mission as well as the other (now expired) central policy – the Rooftop PV & Small Solar Generation Program (RPSSGP) scheme in addition to the various projects which opted to migrate and take advantage of the NSM.
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While the RPO mechanism is quite attractive on paper, the results on the ground have been disappointing because most of the states are reluctant to enforce the RPO for various reasons. The Solar REC trading over the past months have been quite subdued because there is not enough demand for the RECs generated. The price of the RECs traded has also gone down. (A detailed analysis of the REC trading is available in a separate section)
Rooftop PV Another area where solar has been making some advancements has been the Rooftop PV segment. The Solar Energy Corporation of India (SECI) allotted solar PV projects in two batches of 5.5 MW and 11.1 MW spread across 9 cities in the country. Apart from that, several states have announced rooftop PV programmes within their states. Gujarat, the pioneer in the deployment of solar PV rooftop programme, allotted 5 MW of grid-connected rooftop projects to Azure Power
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27
and SunEdison, and has announced its plans to expand the programme to 5 more cities in the state totalling 25 MW in capacity. Kerala announced a policy for the deployment of 10,000 off-grid systems (each system with a size of 1 kW) across the state. The project owners will get capital subsidies from both the MNRE and the state government. Tamil Nadu state solar policy targets 350 MW of rooftop installations by 2015, out of which 50 MW will be on residential rooftops. The support will be through a Generation Based Incentive, which is similar to the FiT. Net metering option is also under consideration. Karnataka’s rooftop PV programme targets about 1.2 MW of grid-connected rooftop installations across 5 cities in Karnataka. The project sizes are 0.5 kW and 1 kW, with the government providing capital subsidy.
Decentralized and Captive Power Generation The industrial sector in various parts of the country has been reeling under severe power deficits. The opportunity cost/loss in revenue due to the power deficit is a source of serious concern for these industrial units and as such, many industries are opting to go for captive power generation which guarantees energy security. Many industries have opted to go for thermal power based captive power generation. However, the rising cost of the various fossil fuels – primarily diesel and coal coupled with the fall in capital costs associated with solar has resulted in solar being extremely cost competitive with traditional captive power plants. In addition to this, solar power plants set up for captive purposes are eligible for AD benefits (up to 100%). This could stimulate the solar market much like how the AD in the wind segment led to the growth of wind capacity additions, primarily by captive power producers. Furthermore, with recent increases in overall electricity tariffs and specifically industrial consumer tariffs in various parts of the country, solar has become
a competitive source of energy for such consumers, having achieved diesel parity already. In addition to the above mentioned factors, some state policies have clauses which strongly favour the decentralized/captive markets. For instance, the recently announced Andhra Pradesh state policy has a clause which enables offgrid projects coming up in the state to be eligible for RECs under the ‘deemed injection’ clause. This addresses another concern which adopters of solar captive power plants might have which is – “What happens to the excess power that is generated?” while also providing an additional source of revenue which might make the case of setting up a captive power plant more favourable. In the short term, we believe the above three to be the key drivers for solar in India. With utility scale solar additions on the wane as a result of capacity allocations being few and far in between, the next big thing with respect to the solar segment in India is most likely to be the rooftop and decentralized segment; especially considering the widening gulf between supply and demand. In addition to this, RPO and its compliance is likely to be the biggest contributor to solar capacity addition in the country.
is expected to be added. In Punjab, no major hurdles for execution of the project are expected. While Andhra Pradesh has also given LOIs to prospective developers, the political uncertainties and also the low tariffs proposed by the administration are major challenges for solar in the state. In Karnataka, projects are expected to be allocated very soon since the submission of bids is complete. The projects already allotted in Madhya Pradesh are expected to be commissioned by September 2013. In Maharashtra, the utility company Mahagenco is planning to add more solar capacity. States like Bihar and Orissa are also planning to make allocations soon. In addition to these, the number of REC based projects will also grow, provided there is a clear indication of RPO enforcement at the state level. Third party sale of power is also expected to pick up. Looking at the overall scenario, the number of projects that will come up in the short term (till end of December 2013) are quite limited. It is expected that the momentum will pick up towards the end of 2013 all through 2014.
Conclusion The MNRE draft guidelines for the Phase II of the JNNSM makes it quite clear that 60% of the solar capacity additions have to come from states. There is clear evidence that all the major states have outlined their ambitious solar plans. Going forward, the 750 MW under the Batch I, Phase II is expected to increase capacity additions in the financial year 2014-15. In case of state policies, Tamil Nadu, which is reported to have given LOIs for 690 MW, will be the biggest state in terms of capacity allocation. However, the realisation of this capacity is contingent upon the removal of all legal and regulatory hurdles currently faced by the state. Punjab is another state where the capacity
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EVALUATING THE PERFORMANCE OF SOLAR PV PLANTS IN INDIA USING PERFORMANCE RATIO (PR) Sebastian Dürr is the Founder and CEO of CHROSIS, a company based in Germany with focus on renewable energy and Co-Founder & Director of REACH Solar Consultants, an India-based solar consulting company located at Chennai. He has a decade’s experience in the Renewable Energy domain with focus on solar-PV systems (rooftop and open area systems). Sebastian is well-versed in international business, having worked with clients in Germany, India and Switzerland.
Performance Ratio (PR)
“Performance ratio gives insights into how efficiently the available solar energy is converted into electrical energy. It is possible to compare the performance of various plants at different locations.”
Performance ratio (PR), stated as percentage, describes the relationship between the actual and the theoretical possible energy output of a solar PV plant. It shows the proportion of the energy that is actually available for export to the grid after deduction of energy losses (e.g. thermal losses, soiling etc.) and energy consumption for operation. The closer the PR value for a PV plant approaches 100%, the more efficient the operation of the plant. Since losses will always be present, a PR of 100% cannot be achieved.
Insights from Performance Ratio
“CUF neither takes into account any environmental factors like variation of irradiance from one year to another nor does it take into account the de-rating or degradation of the panels.”
Performance ratio gives insights into how efficiently the available solar energy is converted into electrical energy. It is possible to compare the performance of various plants at different locations on a normalized – independent from climate conditions – level over a long period of time. Deviations in the PR (e.g. values below the expected range) indicate a possible fault or problem in the solar PV plant. PR can therefore be understood as an early warning system. In India, project developers and lenders typically demand performance assurance from the EPCs in the form of yield guarantees or Capacity Utilization Factor (CUF). The term ‘CUF’ is commonly used in the thermal power plants in a
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different context, but CUF is now the defacto performance metric as far as solar plants are concerned. But the problem with CUF is that it depends a lot on the uncontrollable factor irradiation and is not a true metric of performance of a plant. For example, a poorly built plant with average quality components in Rajasthan can still have a better CUF compared to an excellent plant built using high quality components in West Bengal, purely because the irradiation levels in Rajasthan is much higher than irradiation in West Bengal. However, a better and globally accepted metric – Performance Ratio (PR) – accurately estimates the performance of the plant after removing the externality of solar irradiation. If PR is used to assess the plants in the earlier example, the plant in West Bengal will have a much higher PR compared to the one in Rajasthan.
Difference between PR and CUF PR is a worldwide accepted standard for measuring the performance of a solar PV plant. PR is defined as
PR =
Energy Measured (kWh) Energy Modelled (kWh)
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Where, Energy Modelled = Irradiance x Active Area of PV Panels x η
η = module efficiency Irradiance (kWh/m2) is measured at the specific location Active Area (m2) is the active area of the PV Panels
CUF is defined as CUF =
Energy Measured (kWh) Installed Capacity (kW ) × 8760 hours
The CUF neither takes into account any environmental factors like variation of irradiance from one year to another nor does it take into account the de-rating or degradation of the panels. Therefore, CUF is not a good secondary parameter to provide insights into a solar PV system. Some other factors that could be important when comparing PR & CUF: • •
•
PR will take into account the availability of the grid; CUF will not PR will take into account the minimum level of irradiation needed to generate electrical energy; CUF will not PR will take into account irradiation levels at a given period of time; CUF will not
PR can be used as a tool to compare different solar PV systems – even if they are located in different regions since all environmental factors will be taken into account. Therefore, only the design and the ability of the system to convert solar energy into electrical energy will be compared with each other.
Calculation of Performance Ratio of a Solar PV Plant Different variables are needed to calculate the performance ratio of a PV plant. First and foremost, the irradiation data for the respective PV plant is needed. This can be achieved with an irradiance sensor (preferably a Pyranometer). Other values are the ambient temperature and the panel temperature, since the efficiency of the panel would drop with temperature. There are many reliable Monitoring and Control solutions available in the market that enable a conve-
nient measurement of all values needed and also offer the PR that is calculated automatically. Values that do not change will also play a role in the PR calculations; e.g. the active surface of the panels and the efficiency of the panels. Both these information can be found in the datasheets of the panel manufacturer.
Requirements for calculation The orientation of the PV modules and the irradiance sensor must be the identical to calculate the PR value correctly. It is a must that the PV modules and the irradiance sensor are exposed to the same quantities of solar irradiation. It is nearly impossible to ‘re-calculate’ the irradiance data measured from a Pyranometer with horizontal alignment to the plane of the panels.
efficiency of the panel, are not taken into account in this example. A detailed description of all calculations can be found in the IEC 61724 – Photovoltaic system performance monitoring – Guidelines for measurement, data exchange and analysis. The IEC 61724 also mentions the measurement of wind speeds. These are not needed for calculation, but can be understood as optional values especially if the plant is located in an area with very rough climate conditions.
Example: Calculation of the performance ratio for an analysis period of 1 year The following information is required to do a manual PR calculation •
Analysis period: Define the analysis period in advance. The optimum analysis period is one year
The typical analysis period for Performance Ratio calculations is one year. Other time periods are possible.
•
Generator area of the PV plant: The active area of the PV system is known (or can be calculated)
Manual calculation
•
PV panel efficiency: As given in the datasheets
•
Measured plant output: As given by the energy meter
•
Calculated nominal plant output: This value will be calculated separately
•
In-plane irradiance data: Value as given by the irradiance sensor (preferably a Pyranometer)
Analysis period
It is possible to calculate the performance ratio manually. The following formula- energy generated or measured divided by the energy modeled – is used
PR =
Energy Measured (kWh) Energy Modelled (kWh)
Where, Energy Modelled = Irradiance x Active Area of PV Panels x η
η = module efficiency Irradiance (kWh/m2) is measured at the specific location Active Area (m2) is the active area of the PVPanels
Before this irradiation value can be determined, the mean of the irradiation values measured by the measuring gauge must be determined. This determined irradiation value per m 2 is then extrapolated to the entire modular surface of the PV plant (equal to the generating area). One can obtain the modular efficiency from the data sheet for the PV plant. It is important to note that the panel temperature and therefore, the loss of
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The following specific conditions and values are considered in this example •
Analysis period: 1 year
•
Measured average solar irradiation intensity in 1 year: 120 kWh/m 2
•
Generator area of the PV plant: 10 m2
•
Efficiency factor of the PV modules: 15 %
•
Electrical energy actually exported from PV plant to grid: 110 kWh
The irradiation values measured on location yield an average solar irradiation of 120 kWh/m2 for the entire analysis period.
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This irradiation value is extrapolated to the modular area of the PV plant as follows:
• • •
Irradiation value in kWh/m 2 x Plant Area in m 2 = 120 kWh/m 2 x 10 m 2 = 1,200 kWh
Temperature of the PV module
In order to subsequently calculate the nominal plant output, the irradiation value for the PV plant is multiplied by the modular efficiency: 1,200 kWh x 15 % = 1,200 kWh x 0.15 = 180 kWh The nominal plant output of 180kWh corresponds to a PR of 100%. Since the actual energy fed into the grid is only 110kWh, the performance ratio can be calculated using this formula:
PR =
110kWh = 0.61 or 61% 180kWh
The PR is therefore about 61% i.e. 39% of the solar energy is not converted into electrical energy that is fed into the grid.
Conduction losses Efficiency of the PV modules Efficiency of the inverter
Shading of the PV modules It is likely that the individual PV panels of various rows will shade each other in the morning or the evening. This will result in lower power output. Depending on the location of the Pyranometer, the Pyranometer itself will get shaded or the PR will drop during the time period when the panels are shaded. Since shading of the panels cannot be avoided in total, it is a good approach to install the Pyranometer on the upper row of the solar PV array.
Measurement period If the measurement period is too short (i.e. less than 1 month), chances are that ‘non-typical’ events like rainfall, cloudy weather etc. will influence the measurements. A longer time frame of DAQ will bring more reliable PR results.
Especially in arid conditions (i.e. deserts), it is possible that soiling could cause a drop in PR. It is recommended cleaning the irradiance sensor on a daily basis in order to attain quality data. A soiled irradiance sensor might behave completely different from a well-cleaned one. It is to be noted here that soiling does not have the same effect on the irradiance sensor as it has on the panels.
Conduction losses
The following factors can influence the PR value Environmental factors • Temperature of the PV module • Solar irradiation • Shading or soiling of the Pyranometer • Shading or soiling of the PV panels Other factors • Recording period
As pointed out above, the degradation or de-rating of the solar cells can result in lower PR values.
Performance and efficiency of a solar cell depends, among other factors, on the temperature of the PV module. At lower temperatures, the PV module will be more efficient than at higher temperatures.
Typically, an EPC will always run a simulation for PR based on the design. So, if the PR simulated is 75% and the PR achieved is 61%, then this should be understood as a warning sign that something might be wrong with the PV plant.
Conclusion
Degradation of the solar cells
Conduction losses (DC and AC) will influence the PR; the higher the losses, the lower the PR.
Efficiency of the PV modules Higher the efficiency of the PV modules, the higher the PR value (with corresponding ambient conditions such as higher solar irradiation at the location etc.). A constantly falling PR can therefore be understood as an indicator of panel de-rating.
Efficiency and ‘intelligence’ of the inverter The inverters have a huge impact on PR. Inverters with high efficiency will typically lead to a good PR. But one must also be aware, that a fast and accurate MPP tracking is also important for a high PR. The more independent MPP trackers an inverter offers, the better.
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INDIA LIKELY TO BE ONE OF THE WORLD’S LARGEST MARKET FOR SOLAR Pashupathy Gopalan is President, SunEdison – Asia Pacific (ex-China), Middle East and South Africa. He is responsible for building SunEdison’s solar energy business in these regions. Pashupathy has led SunEdison to build 230 MW of Solar Power Plants in India, Thailand, Malaysia and South Africa and has raised over $800M in debt and equity for the same.
“Seven million farmers use diesel pump to irrigate their crops and are exposed to the vagaries in diesel supply and pricing. SunEdison is very excited about the opportunity and has developed a cost effective solar pumping solution that is being deployed in several states.”
“Private PPA’s will play an important role in the solar industry in India. Large corporations want to conserve their capital for their own core business. This makes the PPA model very attractive for such corporations. ”
You have participated and developed projects under the Gujarat State Policy, the first and second batch of the Jawaharlal Nehru National Solar Mission (JNNSM) and other schemes, for the last three years. What have been your learnings in India and how are these different from your global experiences? The biggest learning has been that it is tougher to get projects completed in India compared to other parts of the world driven by land related issues and labor issues in the construction industry. While this may be an issue in India compared to some other countries, this is similar to what other infrastructure project developers face whether it is building roads or conventional power plants. Given the execution challenges, securing nonrecourse project finance poses a challenge since lenders do not want to take the risk and expect the sponsor to cover for the various risks. Challenges always have a way of making us better and we are happy that the Indian experience has made us stronger and better prepared for the immense growth we see ahead of us. You have been the first solar power company in India to sign a private Power Purchase Agreement (PPA) with a leading multinational bank, at their Chennai campus in India. Can you talk about it a little more? Do you see private PPA’s playing an important role in the development of roof top solar in India?
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Private PPA’s will play an important role in the solar industry in India. Large corporations want to conserve their capital for their own core business. This makes the PPA model very attractive for such corporations. Since the finance for these PPA based projects are raised on a nonrecourse basis, the strength of the PPA comes from the credit worthiness of the off-taker of power (the PPA signing entity). Our experience so far has been good, and payments have been given to us on time barring minor hiccups. It’s a 100kW plant that we decided to experiment on at Standard Chartered bank’s facility in Chennai. This has given us a lot of confidence going forward, and has become one of our prime offerings to large corporate houses. As the Phase II of National Solar Mission is about to start and the action has shifted to the states, what would be the key policy recommendations that you would make to both central and state governments? In light of the Phase II of NSM, the incentive structure VGF – Viability Gap Funding – where capital cost is linked to the incentive received. This should be changed to a “Generation Based Incentive” – which is linked to performance of the plant – in which power producers benefit based on the amount of renewable energy generated and perverse incentives are avoided to reduce the capital costs to the lowest possible extent
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impacting the quality of the plant. There is a lot of interest from policy makers from around the country in Solar Water Pumps for agriculture and rural water supply. How does SunEdison view this sector and can you elaborate on your work in this area? In India, where agriculture provides livelihood to more than 60% population, irrigation pumps consume nearly 20-25% of the country’s electricity. India spends more than INR 30,000 crores annually on electricity subsidy to agriculture and this is the number one reason for the poor balance sheets of the Indian stateowned utilities. By a systematic program, switching to Solar Water Pump, the state electric utilities can improve their financial status and focus on capital expenditure to improve the infrastructure. Seven million farmers use diesel pump to irrigate their crops and are exposed to the vagaries in diesel supply and pricing. Irrigation through Solar Water Pump is cheaper than irrigation by diesel, and also provides year around assured supply of water to farmers. SunEdison is very excited about the opportunity and has developed a cost effective solar pumping solution that is be-
ing deployed in several states. We have already installed over 200 pumps in the state of Rajasthan. Can you elaborate on the roof top projects that you have carried out in India over the last couple of years. What do you see as major challenges for the rapid growth of roop top solar in India? We have built about 2MWs of rooftop projects all across India, and have another 3MWs under construction. Most of these projects have been in the diesel abatement category with MNRE subsidy for industrial and commercial customers. These will contribute significantly in reducing diesel consumption for the customers. The major challenges for the rapid growth of roof-top solar projects are two issues a) MNRE 30% subsidy: The subsidy mechanism is not fluid enough today for most solar players to build a sustainable business model. In-fact, the project economics for diesel abatement are so good, that the subsidy option can instead be redirected to residential rooftop solar systems. The rooftop and distributed solar will flourish in India just with the Acceler-
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ated Depreciation policy. b) Net Metering policy: One of the questions that arise from customers who are interested in roof-top solar is what would happen to the power on nonworking days of industries, or if the load was lower on certain days in a week. The solar potential on the entire roof can be achieved only if suitable net-metering policies are introduced in every state. What do you see as the short term (1824 months) prospects for solar in India and how do you see the market evolving? What is the roadmap for SunEdison in this evolving land scape? We foresee solar tariffs stabilizing or slightly going up in India given the rupee depreciation, and module prices going up given the polysilicon related anti-dumping policy in China and other similar trade disputes playing out. India will be one of world’s largest markets for solar and thus we are participating in various segments to play a significant role. We have been awarded “India’s Best Solar Power Producer” by IPPAI in a process run by Deloitte and hope to continue to strengthen our presence in the market and maintain this leadership.
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STATES LIKELY TO LEAD NEAR TERM INDIA SOLAR GROWTH STORY Bikesh Ogra is the Head of Solar Business at Sterling & Wilson Limited. In a short span of 3 years, having delivered more than 150 MW of best performing solar plants, under his leadership the solar division rose to become a premium Solar EPC provider in the Indian Subcontinent.
“We are actively exploring key partnerships in this arena (DG users) and are offering solutions on CAPEX and OPEX basis.”
“We are witnessing traction in Punjab, UP and Tamil Nadu and are seeing a 1GW+ solar market emerge just from the states alone through various models – state tenders, third party power sale/BOOT model, captive and group captive, REC schemes and depreciation.”
Sterling and Wilson started its journey in electrical contracting almost 90 years ago and since became a leader in MEP (Mechanical Electrical & Plumbing) services in India. When did Sterling and Wilson foray into the solar sector in India and what was the thought process behind entering solar? Sterling & Wilson witnessed stupendous growth since the turn of the last century, when the India story started taking shape. We were constantly on the lookout for businesses that would keep us in stead two decades down the line, centered around ‘sustainability’ and ‘environment’, apart from belonging to sectors of ‘high potential growth’- and thus, we identified three key business areas between 2005 and 2009: Solar, Co-generation and Diesel Gensets. Specifically in the case of Solar EPC, we felt it was a logical extension to our existing business and our historic lineage, given three key strengths that we had as an 87 year old infrastructure player – our strong rooted project execution capabilities in the electrical and essentially power sector contracting business, our engineering skills in the electrical domain and our civil expertise (two key aspects of solar PV construction) backed by further credibility and experience that we share with our associates. Although the initial thought process towards our foray into solar started much earlier, we formally made an entry into
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the sector as a turnkey solar EPC solution provider in the year 2009-2010. You have developed multiple projects under various schemes (RPSSGP, JNNSM, State Solar Programs, REC etc.) and have been executing solar projects in India for the last three and half years. What has been your experience and learning in this period? It has been an amazing journey of constant learning. As on date, we have executed 22 projects combining to form a solar portfolio of about 300 MW, out of which about 150 MW of projects have been installed, while another 150 MW of projects are under execution. Our 200 member strong design team across the country has developed rich expertise across all these 22 projects and has worked closely with internationally acclaimed design consultants from Europe. Our experience over the past few years in solar has taught us 3 key lessons: treat each solar project differently (challenges differ from state to state), be ready to scale-up (and scale down!) as the business cycle mandates and maintain focus on quality construction to endure the long run since that is what delivers the IRR for the client in the final analysis. Overall, our experience in Solar continues to be full of learning and incredibly fruitful. Given how cost conscious and competi
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tive the Indian market is, how has Sterling and Wilson been able to distinguish itself? First, at the expense of sounding repetitive, I would like to make a point on competitiveness: We are in the contracting business now for the past 87 years and stand for certain values that we believe are an attractive proposition to our clients. There would have been no reason for us to exist so long, had we been not competitive or cost conscious, so we believe we have the wherewithal to figure out that part of the story in as far as our tryst with any type of infrastructure contracting business is concerned. Second, we believe in pro-actively working with the clients to arrive at mutually beneficial designs and project costs rather than merely reacting to market pressure – Our first offering to clients in most cases goes with our high-end design, like some of our esteemed peers, and through a consultative process we are open to value engineering to suit their budget and needs. From time to time and from one state to the other, we also focus on where we can add extra value to our offering (E.g.: offering land and evacuation in Rajasthan and Tamil Nadu, financing references through our banking relations, attractive guarantee and warranty coverage based on the meritocracy of projects etc.), and we see that clients appreciate this very much. Third, our focus always has been on delivering plants on time, with quality. The fact that 3 out of the top 5 highest generating plants in the country under MNRE’s JNNSM Phase I Batch I belongs to us, needs to be noted. Fourth, we strongly believe players who believe solar is a short term game will cease to exist. Finally, our state specific approach, wide network of sales and execution offices across the country and our immense experience in power sector working with almost every state nodal agency and electrical body, coupled with our geographical spread of installations makes us one of the most sought after solar EPCs. In fact, all of the above factors have ensured that even in this current fis-
cal (2013-14), where business sentiments are quite low, we have already installed 41 MW of solar projects, making us one of India’s leading EPCs this year in terms of on-ground installations. What do you see as the potential for solar as a distributed generation source? Have you seen any synergy in this with your diesel genset business? Yes, we see immense potential in solar as a distributed source of energy generation. Of late, many models have emerged in the market to effectuate localized solar power plants (load closer to source of generation) on roofs and on ground, and with a multiplier effect. To realize this immense opportunity, we are offering complete turnkey EPC solutions in the rooftop and off-grid solar space given our SP1A (Highest financial capability, Highest technical execution capability) accreditation by CARE which makes us an esteemed channel partner of MNRE for the rooftop/off-grid space, equipping us with eligibility to claim subsidy for our clients. In fact, we were one of the first solar EPCs to execute a large 1 MW roof-port installation over a warehouse roof at Delhi about 2 years ago, and have followed that up with regular successes in the distributed solar space. Our recent small solar installation at one of Mumbai’s prime residential properties will be soon followed by two other niche rooftop projects at a prominent mall and a factory roof across the country, as we aim to achieve 5 MW of small solar (rooftop/off-grid) installations over the next one year. On your second question on the synergy with diesel gensets, let me tell you, we are poised for success through combined synergies of our DG business and our offering in the distributed solar space. To be more specific, we assist some of our DG users reduce diesel off-take through provision of DG+solar+grid based solutions, while for some others who are interested in going completely off grid, our DG+ solar (PV-Diesel Hybrid) solution comes handy. We are interestingly starting to see a high degree of interest from prospective DG clients and existing DG users to ‘go solar’ and in that sense, we
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think solar and diesel gensets are perfectly synergistic for our value proposition in the distributed solar space. We are actively exploring key partnerships in this arena and are offering solutions on CAPEX and OPEX basis. As the Phase II of the National Solar Mission is about to start and the action has shifted to the states, what are your plans? Do you have a state specific approach? It is a matter of great pride for us to state that we are the largest solar EPC in the country, in terms of geographic spread across the country, spanning over 12 states, whereas most of our competition has a footprint only across a few key states. Secondly, as a professional contracting organization we have about 20 regional execution setups across the country, and with regards to Solar, we are wide spread in North and South with our design and engineering centers at Noida and Bangalore and our execution centers at capital cities of most states witnessing solar action, namely Uttar Pradesh, Punjab, Madhya Pradesh, Maharashtra, Tamil Nadu, Rajasthan, Gujarat, Andhra Pradesh and Karnataka with at least 100 member strong teams at each location. Now, as action shifts towards the states, we feel better equipped with our pan India experience and our ideology of ‘state-specific-approach’. Taking a case in point, for example, in most of the southern states such as Tamil Nadu/Andhra Pradesh we realized early that land and evacuation would pose a major threat to the final number of installations that would mushroom in that state and hence we strongly focused on creating a value addition for our clients there by offering land, permits and evacuation bundled with our EPC solution. Similarly, in the state of Rajasthan we invested into solar parks from the perspective of engaging projects under REC scheme, plan for future JNNSM projects under Phase II and for our depreciation-based investors across the country who target higher yield apart from IT benefits. On off-grid and rooftop solar, our approach has been different in the sense, we focus on business models
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rather than states, which decides geographies in which we implement more projects delivering better value for our clients – BOOT model (power purchase by clients) and capital expenditure (foray into green building/solar power by clients) . Our state focused approach has helped us bag solar PV projects worth 50 MW this year, while another 55 MW of solar PV projects are at various stages of discussions, with a mix of projects under different mechanisms viz. state policy, REC schemes, accelerated depreciation schemes, and third party private power sale BOOT model/OPEX model. Given the interest in group captive/third party power sale models, are there any plans for Sterling and Wilson to invest in solar plants with developers and sell energy to such customers? Yes. In fact, we are on the verge of concluding our third project on BOOT basis whereby a partnership of sorts between us (as the EPC) and our partner (as the project investor and power seller to the end customer) is selling energy to customers – typically those who wish to go solar/procure solar power but do not have the wherewithal to endure the new technology adoption cycle or capital expenditure. Although, our first two BOOT
projects are on roofs of prime properties in metropolitan cities, we are actively working on various models and creating synergies with potential partners to pursue the OPEX model in a much larger way i.e. on MW-scale. What do you see as the short term (18 24 months) prospects for solar in India and how do you see the market evolving? What is the roadmap for Sterling and Wilson in this evolving land scape? Overall, the economic scenario with a constantly falling rupee - which clearly hurts imports, on which the industry is heavily dependent - and negative sentiments on growth doesn’t look encouraging until mid of next year. However, we expect a strong recovery – India has no option but to grow from 2015, and when that happens the immediate power generation capacity that’d come up (at least a chunk of it) would be Renewable and more precisely solar. In the short term, we are eagerly awaiting the launch of JNNSM Phase II, as much as any other industry player since we see that as a large chunk of the private market for the next three years, but we also understand that developments on the political front, technical resolution on various topics in the bid document and general fiscal scenario may play a role in deciding when
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the Phase II is formally launched. In contrast, clearly, looking at the trend that seems to be emerging this year, states we believe, will lead the solar revolution in India over the next year or more. We are witnessing traction in Punjab, UP and Tamil Nadu and are seeing a 1 GW+ solar market emerge just from the states alone through various models – state tenders, third party power sale/ BOOT model, captive and group captive, REC schemes and depreciation. Tamil Nadu clearly seems to lead at the moment, just that it would help the state if it could fast track PPA signing and TNERC orders apart from resolving deadlock over SPO. There is also a quickly maturing third party power sale market which is taking shape in Andhra Pradesh, Maharashtra, Madhya Pradesh and Karnataka in the near short term. Given the above developments, our roadmap in the near term is focused on a two pronged strategy – domestic and international. Domestically, in India, over the next many months, we are focused on building solar park infrastructure (for third party power sale/trading and JNNSM projects) and help our clients initiate discussions with power purchasers for PPAs, construct some good projects through the Tamil Nadu, Punjab and UP state allocations and expand our activities in the distributed solar space. On the international front, we are strongly focused on Saudi Arabia, North and East Africa apart from South Africa and Central Asia and clearly see a pipeline of about 175 MW – 200 MW emerging through our work in these markets over the next 12 - 14 months. Clearly, we are optimistic about the solar business in the near term.
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SOLAR SHOWCASE STATE - TAMIL NADU Tamil Nadu has been the undisputed leader in the renewable energy sector in India. As of 31st July 2013, renewable energy power generation capacity constituted 38% of the total installed capacity in Tamil Nadu. Within renewables, wind energy constitutes almost 90% of the total installed capacity in the state. In fact, the leadership of Tamil Nadu in the renewable energy space is due to the dominance of the wind sector. At the end of the year 2012-13, the total wind power generation capacity in Tamil Nadu was about 38% of the total wind generation capacity in the entire country. (For more details, please refer to the wind section of the handbook) However, when it comes to solar, the contribution of Tamil Nadu has been negligible. Of the 1,839 MW of solar PV installed capacity in India (as of 31st July 2013), Tamil Nadu has just 17 MW installed capacity, representing less than 1% of the total share. But that situation is set to change with the implementation of the ‘Tamil Nadu Solar Energy Policy 2013’.
the tender documents for allocation of 1,000 MW of solar projects. The tender provided 30 days’ time for interested applicants to submit their bids for the allocation of projects. Bids for about 500 MW were received and this included bids from some of the leading solar developers like Sun Edison, Welspun, Lanco etc. The lowest bid received was Rs. 5.97/kWh but TANGEDCO announced a ‘workable tariff’ of Rs. 6.48/kWh after a review of the commercial bids.
2013 and 6% subsequently) for most HT consumers. The SPO is intended to create market demand and lets the obligated customers fulfil their obligation in many different ways.
•
generating captive solar power in Tamil Nadu equivalent to or more than their SPO
It has been reported that the Letter of Intent (LOI) for projects up to 690 MW has been awarded, and the work on the same is expected to start soon with the signing of Power Purchase Agreement (PPA).
•
buying equivalent to or more than their SPO from other third party developers of solar power projects in Tamil Nadu
•
buying RECs generated by solar power projects in Tamil Nadu equivalent to or more than their SPO
•
purchasing power from TANGEDCO at ‘Solar Tariff’
Tamil Nadu State Solar Policy
Solar Resource Availability Tamil Nadu is a sunny state with high solar insolation of about 5.6-6.0 kWh/m 2 in a majority of places. The State also has around 300 clear sunny days in a year. Some of the southern districts like Ramanathapuram and Sivagangai are considered to be hotspots for solar in the state.
The Tamil Nadu Policy 2012 is one of the most ambitious of its kind. It sets an aggressive target of 3,000 MW by 2015, with 1,000 MW installed every year from 2013 to 2015. The target has been split into three categories – Utility Scale, Rooftop PV and REC based. The table given below provides the details. Phase (20132015)
Utility Scale (MW)
RoofREC top PV (MW) (MW)
Target (MW)
Tamil Nadu has 17 MW of installed
2013
750
100
150
1000
solar capacity as of 31st July 2013. All the projects were allotted under different schemes of JNNSM (Demonstration scheme, Rooftop PV and Small Solar Generation Programme (RPSSGP) and under the Batch I , Phase I of the National Solar Mission) and under Renewable Energy Certificate (REC) mechanism. The State introduced its own solar policy in October 2012.
2014
550
125
325
1000
2015
200
125
675
1000
Total (by 2015)
1500
350
1150
3000
Status of Solar in Tamil Nadu
In December 2012, the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) released
Unique Policy Driver - Solar Purchase Obligations (SPO) One of the pioneering initiatives under the policy has been the Solar Purchase Obligations. The policy mandates a 6% SPO (starting with 3% till December
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The obligated consumers may fulfil their SPO by
It should be noted that the SPO and Renewable Purchase Obligation (RPO) are two different obligations. The RPO has been fixed under the RPO Regulations issued by the Commission whereas the SPO has been made mandatory under the Tamil Nadu Solar policy 2012. The obligated entities under RPO regulations include distribution licensees, captive consumers and open access consumers while the obligated entities under the SPO include •
HT consumers (HT Tariff I to V) - SEZ - Industrial connections with guaranteed power supply - Telecom towers and IT parks - All colleges and residential schools - Buildings with built up area of 20,000 m 2 or more
•
LT commercial consumers (LT Tariff V)
SPO would be administered by TANGEDCO which would act as the nodal agency. Non-compliance with the SPO regula
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tions would mean that the obligated entities would have to pay a ‘fine’ which would be equal to the forbearance price of solar RECs (as determined by CERC) required to fulfil the obligation. The penalty would be paid to TANGEDCO who would then purchase the requisite RECs required for fulfilling the obligation from the market.
Rooftop PV and Net-metering The policy targets 50 MW of domestic rooftop PV installations and had proposed the following Generation Based Incentive. Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Rs. 2/ kWh
Rs. 2/ kWh
Rs. 1/ kWh
Rs. 1/ kWh
Rs. 0.5/ kWh
Rs. 0.5/ kWh
In addition, net-metering is also planned to be implemented in residential and commercial establishments at various voltage levels.
Other Solar Initiatives While the utility scale solar initiatives have been grabbing the headlines, Tamil Nadu has also witnessed much progress in off-grid solar initiatives with a major focus on rural areas. These applications fall broadly into three categories – Green Houses Scheme, Solar Street Lighting and Solar Water Pumps.
Chief Minister Solar Powered Green House Scheme (CMSPGHS) In June 2011, the Government of Tamil Nadu launched the Green House Scheme under which it is targeted to construct 3 Lakh houses over five years (2011-2016) in rural areas. 60,000 Solar Powered Green Houses of 300 square feet each will be constructed every year at a unit cost of Rs.1.80 lakhs per house. Each house is provided with five solar powered Compact Fluorescent Lamps (CFL), one each in bed room, living room, kitchen, toilet and verandah. The CFLs can be operated for five hours a day. There will be a grid backup and the systems will have a smart power condi-
tioning unit to charge the battery from grid only in rainy or cloudy days when solar power is insufficient. There will be direct Electricity Board (EB) supply to lights in case of failure of battery/inverter. The solar system will have three day autonomy.
certified more than 200 engineers and entrepreneurs in a rather short span of about five months.
Solar Street Lighting Systems
RENERGY
Another signature initiative of the Tamil Nadu Government has been the Solar Street Lighting programme for rural areas. Under this programme, 1 Lakh Street lights are targeted to be installed over a five year period (2011-16), mainly in village panchayats.
The GoTN has been organizing RENERGY- an International Renewable Energy Conference and Expo- over the last two years in Chennai. RENERGY in 2013 has grown to become India’s largest renewable energy conference with more than two thousand delegates from India and abroad. It has become one of the most important platforms for national and global thought leaders in solar energy to meet and deliberate on the growth of the industry. The program had a number of capacity building initiatives that were first of their kind including more than eight workshops, expert sessions and sessions for research and innovation.
The solar street lights will be energised through a combination of centralised and decentralised models. Existing clusters of 10 to 15 street lights with tube lights or bulbs will be replaced by 20W LEDs. The cluster will be energized by a 500 / 600 Wp Central Solar PV power plant (Approximately 9,500 plants to energise 95,000 lights). In the decentralised model, 5,000 standalone SPV street lights with 20W LEDs will be erected at scattered, grid inaccessible locations.
Solar Water Pumping Systems Under this category, the Tamil Nadu government has invited tenders for installation of 530 AC submersible solar PV water pumping systems of 4.8 kWp capacity each. These pumps will be installed across various places in Tamil Nadu. The end beneficiary needs to pay only 20% of the system cost and the rest is borne by the Tamil Nadu Government. The solar pumps come with a five year maintenance contract. The pumps will initially be installed in paddy growing areas.
Skill Development Initiatives Recognizing the employment and entrepreneurship potential that solar energy will provide in the coming years, the GoTN, in a pioneering initiative, launched solar training programs for professionals and entrepreneurs through the Entrepreneurship Development Institute (EDI). Since the launch of the program, EDI, GoTN has trained and
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Capacity Building and Outreach Initiatives
Outlook for Tamil Nadu Solar With the number of active solar policies in the country being limited to a few states, the ambitious TN solar policy has captured the interest of many developers mainly due to the innovative tariff structure as a result of the annual tariff escalation. The increasing tariff structure offers comfort to developers as this will be in line with the increase in tariffs for consumers, hence reducing the burden of the solar tariff on the distribution company. In addition to this, the novel SPO mechanism being adopted in TN could serve to bring in additional revenue to TANGEDCO which could be used to make payments to the developers. All this has resulted in increased investor confidence in the solar sector in TN and we expect to see the state becoming one of the forerunners in the solar field after spearheading the growth of the wind industry in India.
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