Challenges of solar IPPs in India

Solar Energy in India

A pertinent question that has been raging in the field of renewable sector is: Is India’s 2022 solar target of 100 GW for real? It may be an ambitious number but definitely not unattainable. Solar fundamentals are so compelling in India that the sector is bound to grow gigantically with India likely to become one of the largest solar markets globally in the next 3 years. India is already well on its track to enter the top five solar markets globally. By changing RPO (Renewable Purchase Obligation) targets (solar specific) for the year 2022 to 10.5% from 3% of all consumption of power in India which is yet to be ratified as per the Electricity Act of 2003 provisions,  India has plans to raise its solar capacity to 100 GW by 2021 from 20 GW in 2020. The 100 GW target has been divided in a 60-40 ratio between utility scale and rooftop and small projects respectively.

Both state and central governments have released several policies and schemes for accelerating the development of solar projects. The Centre has taken the lead with the National Solar Mission (15 GW worth of projects by the year 2019) and other initiatives like the policy related to solar parks and an interest rate subvention scheme. Many states, such as Andhra Pradesh (5 GW), Telangana (5 GW), Maharashtra (7.5 GW), Tamil Nadu (3 GW) and Karnataka (2 GW) have followed with massive targets. There will be several challenges in the way of accomplishing these plans, including land acquisition, project financing and transmission woes. However, the biggest hurdle will center on the enforcement of RPOs and the poor bankability of India’s DISCOMs or distribution companies. Since electricity is a recurring topic of discussion, i.e., the center and the states both legislate on it, the states have the option to not take into account the central government directives.

Growth of rooftop solar power generation majorly depends on its financial competitiveness vis-a-vis grid power. The government has of late announced encouraging financing initiatives to improving availability and cost of debt financing to go along with wide ranging net-metering policies. But experts are of the belief that these measures may not be anywhere near sufficient to reach the rooftop solar target of 40 GW. However, keeping this in mind, the overall outlook for solar energy in India is immensely positive and it is further complemented by powerful underlying fundamentals such as the increasing cost of conventional power, environment based concerns, lowered costs of solar power overall, huge irradiation, a high power deficit and the ability of solar to quickly bring power generation capacity online. These factors coupled with several state and central government initiatives should contribute towards making India one of the largest solar markets in the world. 

Solar Power in India-A new beginning in 2016

June 2015 saw Prime Minister Narendra Modi revising India’s solar power target from 20,000 MW to 100,000 MW by 2022. India currently has a total of 5547 MW grid-connected solar energy projects. Estimates reveal that India requires Rs. 6 trillion to escalate the capacity to 100GW. Recently, the Ministry of New and Renewable Energy said that India will add 3790 MW of solar power capacity by March 31,2016 to take the total installed capacity in India to 9038 MW. The Ministry submitted a status report that lays out the implementation of various schemes which will enable the meeting of the target by 2022. According to the Ministry’s statement, till January 31, a total of 5248.21 MW has been installed, with the maximum capacity being in Rajasthan and Gujarat coming a close second.

Of the new capacity that will be added by the end of this year, 322 MW will be added in Rajasthan, 281 MW in Telangana, and 276 MW in Tamil Nadu. The report also stated that tenders have been prepared till January 1 to add 15,177 MW of solar capacity in 2016-17. Tenders for another 4431 MW of projects are also expected to be ready by the end of the current fiscal year. If the projects reach fructification, by April 1, 2017, India’s solar power generation capacity will stand at 21,199 MW. Raj Prabhu, CEO and Founder of the Mercom Capital Group, was recently quoted saying that the sector of solar power in India has finally emerged out from a state of hibernation. The proof of it can be found in the fact that after three years of remaining at a stagnant level, solar installations in 2015 increased by 142% and 2016 and 2017 are expected to witness further growth in this regard.

Welspun Energy Pvt. Ltd (WEPL) is a leading independent developer of renewable energy projects. Within this year the organization will have achieved 1 GW of solar and wind commissioned capacities. ABB in India and Welspun Energy have together installed about 700 MW of solar photovoltaic projects in numerous Indian states like Punjab, Rajasthan, Gujarat, Maharashtra, Karnataka, and Tamil Nadu. The company also plans to participate in government’s program of setting up 4000 MW solar ultra mega power projects. The pipeline of state level projects that are to be commissioned through 2016 looks strong, and in the first quarter of 2017 will expectedly witness a significant capacity of addition through central government allocations. With Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka contributing almost 80% of all new capacity addition in calendar year 2016, the utility scale solar market seems to be well on its way to meet the target for the next financial year. 

Can Solar Energy In India Target Be Achieved?

With multiple solar projects in India set to take off, India is set to almost double the generation capacity targets in the ongoing financial year and also exceed its target of contributing an additional 1.8 GW of extra capacity during this year. As per statistics, India will end the present financial year with total solar power generation capacities of an impressive 6 GW. In February 2015, operational capacity stood at just 5 GW for India. Performance of solar PV plants developed under the aegis of the National Solar Mission has exceeded expectations as well. This should boost the ministry of new and renewable energy (MNRE) that is targeting an addition of 100 GW of solar power by the year 2022 as part of the National Solar Mission. The Solar Mission had targeted an addition of 1.8 GW for the fiscal year which would take total capacity to approximately 5.5 GW. For the 2016-17 fiscal, the country has a target of 7.2 GW in extra capacity while this should go up to 10 GW for the 2017-18 fiscal.

Rooftop solar projects should add 40% of the 100 GW targeted by the year 2022 while 57% will be added through solar farms and other big ticket projects. This capacity addition will also encompasses solar thermal plants and dry or photovoltaic plants. Most installations till date have been created with the help of photovoltaic (PV) technology which does not require high maintenance owing to fewer moving components. The target of the National Solar Mission for the first year will be met due to several Solar Energy In India that have been kick started by private organizations.

Rajasthan is the leader in terms of overall solar power generation capacity in the country with 1.26 GW while Gujarat and Madhya Pradesh come second and third with 1 GW and 0.7 GW respectively. Maharashtra and Andhra Pradesh follow with 378 MW and 253 MW respectively. Andhra Pradesh should take second position in the next fiscal since it has already sanctioned subsidies for 3, 500 MW capacity from the Centre. Subsidies are also being given by the Government to big solar parks to the tune of INR 20 lakh per MW. The costs involved in building solar parks is approximately INR 5 crore which is one of the lowest globally. This has certainly contributed towards helping India meet the ambitious National Solar Mission target for this year and stay on course to meet the next batches of targets.

Welspun IPP is a leading player when it comes to solar and wind energy and has already developed a path breaking 151 MW plant at Neemuch. The company aims at being one of the frontrunners of India’s growth strategy in the sector. 

Top 5 Countries That Have Set New Benchmarks In Renewable Energy

The renewable energy domain has been making incredible progress across the globe in recent years. For example, solar energy generation capacity is on the upswing, wind power is blowing strong across water and land, while the crucial battery storage technology has improved rapidly allowing the clean energy generated to be stored for use when needed

But which countries are making the most progress in the global race to convert to renewable resources? Here’s a close look at the top countries that achieved notable progress in the renewable energy space in 2014 and the beginning months of this year.

USA

North America leads the world in terms of recently announced energy storage projects.

Residential solar prices are a in a freefall throughout the country.

Energy storage facilities estimated to grow 10x in five years

States like California have taken the lead by pushing for a mandatory 50% renewables by 2030 Renewables account for an impressive 98% of new energy distribution.

Germany

Electricity output from renewables has grown eight times since 1990, latest data suggests a huge shift towards clean energy taking place.

German battery maker BMZ, will be quadrupling its production capacity to roughly 5 GWh of energy storage capacity annually by the year 2020

Germany plans to abandon all nuclear power by 2020 and has announced new 150MW ground-mounted solar energy projects towards this end.

The country has invested approx 30 billion Euros in offshore wind energy projects.

India

Solar power is likely to constitute about 25% of India’s total power generation capacity by 2022.

The government has also announced 100 GW wind energy capacity by the same year.

Rajasthan is likely to witness 40 GW of solar capacity development in keeping with India’s mission to possess 100 GW solar power generation capacity by 2022. Assuming all developers adhere to their states commitments, Rajasthan alone is likely to account for nearly 40% of this target.

India is gearing up to welcome approx 750 MW facility which is coming online soon.

Indian Railways, the fourth largest rail network in the world has joined the renewable bandwagon and plans to create a 1 GW solar plan

China

China has put a cap on coal after smog levels in the country reached alarming levels.

It has already installed approx 5.04 GW in the first few months of this year.

China’s offshore wind sector capacity has increased by approx 500%.

5GW of distributed solar to be available in 2015

United Kingdom (UK)

Sales of eco-friendly electric cars in the UK have recorded a 300% rise.

Estimates for solar energy capacity have also jumped by approx 4%.

57 MW of solar power has already been connected in the UK.

With wind costs on the decline, UK has planned a 400 MW offshore wind programme, headed by a proposed 1.2 GW offshore wind project.

Welspun Renewables has pioneered solar and wind power solutions that have set new industry benchmarks for their sheer size and installed capacity.