Solar Summit 2016

Implementation Issues and Solutions

On April 14, 2016 at Hotel Shangrila, New Delhi

The highlights and recommendations of the ASSOCHAM Solar Summit 2016 are as follows:

The Chief Guest, Shri Upendra Tripathy, IAS, Secretary to Government of India Ministry of New and Renewable Energy in his inaugural Address said Renewable Energy not only reduces capital cost but also carbon footprints. Post RE Invest 2015 industry committed solar deployment and the banks have been facilitating RE projects. Grid evacuation and land acquisition issue need to be addressed. CM Andhra Pradesh has taken an outstanding an outstanding initiative to aggregate/pool farming/agricultural land without acquiring it from the farmers. Farmers leased their land to Government for 25 years and are also shareholders in the development process, to support their livelihood.

Shri Tripathy said that the need of the hour is to think innovative – new reservoirs, introduction of RE courses in schools/colleges, creation of Renewable Energy National Universities/ museums, Solar Zones, Manufacture of ancillaries (to bring down capital costs), introduction of hybrid policy (superimposing one over the other), facilitating startups and establishing networking centers, needs to be considered. 10-15% of government securities in PF, Pension funds could be earmarked for RE development. Tax fee bonds could be issued.

The Indian Industry has already achieved the set targets for fiscal year 2015-16, Shri Tripathy said. The question is how to prepone the targets set for 2019-20. Ministry also is working on Plan B where portion of Rooftop will be shifted to solar parks. Ministry has envisaged the 2nd Green Corridor. The Indian Railways is committed to deployment of solar capacities. Nearly 8000 stations have been solarised. Punjab rooftop deployment over 5000 acres of land has been the biggest initiative in India.

Shri Tripathy said that Financing is a challenge. The state tariffs are different and bank rates are different too. There is need to rationalize the structure and get engaged with Multilateral funding agencies. There is need to look at Hedging Costs, perhaps $ linked tariff could provide solution. Industry should be driven by competition and subsidy regime needs to be done away with.

Shri A.K. Kapoor Member Railway Board in his address shared the steps undertaken by the Indian Railways to support Govt of India’s initiative. He said that Indian Railways has the largest transportation networks in the world with 66,000 route kms of track, of which 42% (28,000 route kms) is electrified. Railways has a fleet of 10,000 locomotives (5000 diesel and 5,000 electric). 2.5 lakh freight wagons and 68,000 passenger coaches operate to carry 23 million passengers and 3 million tones daily. For sustainability of environment and to reduce dependence on fossil fuels, Indian Railways has taken a number of initiatives to harness green energy. Vision 2020 document of Railways envisages at least 10% energy use from RE sources. Indian Railways has a total requirement of about 2100 MW and the annual traction energy consumption is about 18.25 billion units. Railways are working on plans for setting up wind power plants. A plant with 25 MW capacity was commissioned in Rajasthan last year and has generated 15 million units till date. Solar Energy is harnessed in two ways - Solar Thermal and Solar Photovoltaic. Policy guidelines have been laid for promotion of new and RE energy sources including use of solar energy for solar water heaters, solar panels at railway crossing gates, wayside stations and harnessing wind energy using wind mills and wind hybrid plants.

Shri Kapoor said that in case of solar thermal system, railway hospitals and many of the stations and other buildings (guest houses, kitchens, running rooms) are equipped with solar hot water system. Efforts are on to add solar thermal system for the railway laundries and railway industrial applications. In the area of solar photovoltaic applications, Railways have planned to harness about 1000 MW solar power in next 5 years out of which 500MW on rooftops, stations and other buildings to meet non traction loads. Roof top spaces are being provided at no costs. The balance 500 MW is planned through land based system to meet traction power requirements. Railways will purchase this power under long term PPA with fixed tariff during next 25 years. At present only about 10 MW has been harnessed at wayside stations and level crossings. Bids have been invited for 50MW solar plants on the roof tops at identified locations. The real advantage of solar PV is in its small localized applications that bring the much needed energy availability without the need for investing in transmission and distribution systems. SPV systems have been installed at all manned railway crossings gate for lighting and basic electricity needs to crossing operators. SPV systems are installed in remote railway stations to enhance passenger comfort and safety – solar street lights on platforms, SPV mini grid for station master office, SPV based drinking water coolers, SPV based solar fans and LED signage. It is also planned to introduce SPV power pack (portable) in the guard cabin for freight trains. Some other solar initiatives are battery driven vehicles for platforms, solar powered signage (hoardings and station names) with LED lights, SPV Dessert Coolers.

Shri Sandeep Jajodia Managing Director Monnet Ispat and Sr. Vice President ASSOCHAM in his welcome address said that Solar potential in India is estimated at 759 GW at 20% capacity utilization factor, accounting 1330 billion units of power per year. Govt has envisaged adding 12 GW capacity from renewable source in the current fiscal and plans to add 15GW and 16 GW in 2017-18 and 2018-19 respectively. Government has focused on key problems of solar power developers like 100% FDI, tax breaks, conducive business environment, solar parks, land acquisition issues or allied clearances. India’s largest power generator NTPC Ltd has witnessed record low bid for solar power projects.He said that poor DISCOM financial health has serious ramifications for continued growth of the solar sector. This mandates successful revival of distribution sector and tariff reforms. The Cabinet Committee on economic affairs has increased the subsidy budget for the implementation of grid-connected rooftop solar power from Rs. 660 crore to Rs. 5,000 crores over a five year period until 2020. In order to make the industry sustainable, there is need to do away with the subsidies, Mr. Jajodia said. This will help the market to progress towards grid parity and pure economic viability, instead. Land acquisition is a challenge. Some states are exploring innovative means e.g. deploying solar capacity above extensive irrigation canal projects thereby harvesting solar energy while conserving water by reducing evaporation process. The state of Gujarat was the first to implement Canal Solar Power project, to use 19,000 km long stretch of Narmada Canal for setting up solar panels to generate electricity.

Shri T. Kishore Nair COO Welspun Energy in his opening remarks said that India is an agrarian economy. Predictions by metrological department forexpected good monsoon this year, has set the Indian markets on upward trajectory. Solar capacity deployment shall address the social concerns including carbon footprints, thereby leading to a cleaner environment for future generations. French Development Agency will contribute 300 million euros for the development of solar energy over the next five years in order to finance the initial projects to be undertaken by the International Solar Alliance (ISA). The India-led initiative will require an investment of about 1,200 billion euros to achieve the target of installing 1000 GW solar energy by 2030, and it has the full support of French Government, informed Mr. Nair. The first Renewable Energy Global Investors Meet and Expo (RE INVEST 2015) organised by MNRE instilled new confidence in the Indian renewable energy sector. Subsequently Tariff policy, Electricity Act changed and funding was facilitated. Bidding entities played crucial role. Though competitive bidding brought down the tariffs significantly, however, there is need for uniform bidding guidelines and uniform tariff across all states in India. Financial security and evacuation are the issue of key concerns. Here NTPC payment security mechanism needs to be adopted. Government’s intervention is required for PSL for solar power projects.

Mr. Francois Joseph, in his address spoke about International Solar alliance and Government of France support to India’s initiative to achieve the target of installing 1000 GW solar energy by 2030 at an investment of about 1,200 billion euros.

Shri K.C. Mehra, Sr. Managing Committee member ASSOCHAM proposed the Formal Vote of Thanks

The following measures were highlighted and recommendations suggested for large scale integration of RE into the Indian grid by speakers panel:

  • RE Power (solar and wind) are non dispatchable, which means that plants can generate power only when solar and wind resources are available. The power system requires dispatchable plant during the period when RE generation is not available.
  • Grid support services are required to manage RE grid integration. There is need for flexible generation and load which can respond rapidly and maintain balance between generation and load.
  • Flexible frequency and deviation mechanism along with a few storage reserves are playing a crucial role in balancing minute-to-minute variation in load and supply. Adequacy is challenged.
  • Off-take of RE power is a challenge due to price competitiveness with conventional sources ofpower considering net value of off-take. It is imperative to develop market driven mechanism in addition to regulatory interventions in order to foster higher shares of renewable into the grid.
  • Low cost financing mechanism and adequate financial instruments are needed to foster increased share of renewable into the grid.
  • Significant amount of RE share to be traded over the Power Exchanges (PXs in the long run
  • Ancillary and balancing reserve products to be traded on the PXs
  • Introduction of reserve products derived from flexible loads
  • Incentivising grid discipline by introduction of generator and or consumer Balancing Groups/ DSO and Aggregators
  • Must Run status for RE power via market mechanism
  • Challenges for Balancing and Integrating RE in India need to be addressed:

Limited ability to back down generation

Low availability of hydro power for balancing– multi-purpose of hydro plant also restricts flexible dispatch; low pumped storage capacity and location in states with lower RE shares;

Low availability of gas-fired thermal power – shortage of fuel availability and high cost of natural gas Uncertainty of RE supply – absence of forecasting RE

Rate of change of power contribution from RE – fast change in radiations or wind speed

Lack of regional balancing – high transmission of wind energy

Suggested roadmap for enhancing balancing potential:

Organizing a burden sharing for the balancing task will become more and more urgent in order to support a cost effective way of RE integration. A refinancing scheme for RE will support these developments.

High quality forecasting of RE generation as well as load is vital to reduce the uncertainty in system operation and is a prerequisite for scheduling and dispatch of conventional power plants.

Retrofitting of plants regarding technical flexibility to handle situation of high feed-in from RE which today contributes to over-frequencies in the grid and lead to curtailment of RE.

Flexible hydro capacity with storage capability has to be further developed for intra-day balancing of load and supply in each state

Development of pumped storage hydro power plants.

  • The Grid connected Roof top is less dependent on fossil fuel and reduces requirement of land, for addition of capacities. It also reduces dependency on grid power, and provides ease of connectivity, particularly in net metering arrangements. Govt has accorded Income Tax benefits as one time investment provides 25 years of clean energy generation. 80% solar generation off-sets normal hours and 20% off-sets peak hour demand.

For settlement of excess generation:

For consumers in the ambit of Time of Day tariff, the electricity consumption in any time block peak, off-peak or normal shall be first set off with the solar generation in same time block.

Any excess generation over consumption in any time block shall be moderated as per the relevant rebate/surcharge percentage of ToD tariff applicable as per Regulator Guidelines.

The Consumer shall be paid for net energy credits which remain unadjusted at the end of the financial year at the rate of Average Power Purchase Cost (APPC) of Discom

  • 1KW solar systems costs Rs. 65,000, about 10 sq meters of space and generates 1,300 KWh (units) / year with payback time of 6-7 years. Initiatives taken by EE and REM Center:

Promotion of LED in all buildings, street lightings and hoardings, advertisements etc.

Mandatory use of Solar Water Heaters in Delhi in different categories of buildings.

Mandatory use of ISI marked Motor pump sets, Power capacitor, and foot/Reflex valves in Agriculture Sector of Delhi State.

It is proposed to make Delhi Secretariat the first Green, Energy Efficient secretariat operating completely on Solar Energy. For this a 3MWp surface mounted SPV plant is being installed on the vacant land of erstwhile Indraprastha Power Station. Power generated from this 3MWp SPV plant will be dedicated to Delhi Secretariat for meeting out the total electricity requirement of the building.

  • Delhi Solar Policy highlights Green Fund – Leverage existing Air Ambience Fund in Delhi funded by the Cess on Diesel.
  • Accord Incentives to RE:

Exempt Solar Systems up to 200 KWp from certification by Electrical inspector.

Accord Fiscal incentives - accelerated depreciation , tax holidays, tax exemption, concessional customs and excise duty for some machinery components

Accord Financial Incentives : Generational based incentives, viability gap funding, R&D funding, PSL and 100% FDI for RE

Incentivise Technology usage in solar farms:

Trackersimprove generation by 10-25%, reliable indigenous options

Inverter containers for faster commissioning

Module cleaning Robot to reduce water consumption needs

Energy storage – enables off grid applications reduces variability and is cost prohibitive

  • Net metering needs to be expedited urgently – RPO multiplier for the sector
  • Enable third party investment models:

Special dispute resolution process

Facilitate rooftop lease arrangements

Enable gross metering

  • Solar Development Models:

Capex model

‘Build Own and Operate’ model where a developer incurs capital expenditure and owns and operates the plant for its entire life (usually 25 years).

Suited for ground mounted ( concentrated) solar development

PPA or Opex or RESCO model

Legal agreement (Power Purchase Agreement) between developer / IPP which will design, develop and operate the plant and the only consumer (pure captive) or only Utility ( gross metering) or both consumer and Utility (net metering)

Power is supplied to the purchaser and billed for the power consumed

IF no export provisions / grid interaction the developer should be able to sell the entire power generated to the consumer

Suited for distributed generation like rooftop solar

Leasing

In this model, the entity desirous of purchasing solar power can lease the system from a provider and the purchaser will pay on the basis of energy produced every month.