ENERGY 22 Jan 2010
Mission Improbable
The solar mission is very much a leap of faith at the moment
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Finally, the government of india has opened the window to the sun. Having waited years for solar energy technologies to come up to scratch as utility-scale source of electricity, the government has come up with definite and ambitious targets, incentives, mandates and processes to jump start the solar power sector.
If all goes well, at least 20,000 megawatt (MW) of solar energy will be flowing through the national grid by 2022. However, for now, it is very much a leap of faith, as the solar power business is starting from scratch, and the technologies, manufacturing, costs and business models have a lot of evolving to do.
Currently, there are only two megawatt-size solar power plants in India — a 2-MW private plant in Punjab, belonging to Azure Power, and another 2-MW state-owned plant in West Bengal. Both started operating in late 2009 and largely cater to local needs. Also, both plants are based on photovoltaic (PV) technology, which collects and converts sun’s energy using crystalline silicon or thin film panels.
There is no plant with solar thermal technology yet, and the government is looking to get 60 per cent of its solar power feed from plants using this technology. Solar thermal power is made using mirrors to concentrate the sun on a heating device that generates steam to run turbines to make power.THE SUNNY AND THE CLOUDY The target set by the Solar Mission is too ambitious. The government has to sweat to make it a reality |
| SUNNY Big target: Installation of 1,100 MW grid-connected solar power by 2013; 4,000 MW by 2017; and 20,000 MW by 2022 Proven technologies such as solar thermal and photovoltaic for 1,000 MW of grid-connected utilities in Phase-I; only 100 MW from new technologies NTPC Vidyut Vyapar Nigam (NVVN) to buy solar power and blend it with NTPC’s coal power to ensure a low average price to state electricity boards Central Electricity Regulatory Commission (CERC) has kept the period for special solar power tariffs at 25 years States have to buy at least 5 per cent power from renewable sources from 2010. States may have to buy at least 0.25 per cent solar power from 2010, going up to 3 per cent in 2022 CLOUDY A start from scratch; present capacity is 4 MW, and actual output is only about 20 per cent of installed capacity with current technologies No operational generation plant yet using solar thermal technology, which has to deliver 60 per cent of the 1,000 MW NVVN’s involvement is limited to the first phase. Its purchase is capped at 1,000 MW installed solar power capacity — only about 200 MW output CERC will review the tariff annually, which makes financial forecasting difficult for investors No utility-scale solar power project is likely to come up before mid-2011. Only a few solar power companies have obtained power purchase commitments from state power distribution utilities |
Moreover, the plant and equipment manufacturing is still small. Currently, the aggregate PV modules panel capacity is about 700 MW, while production of thermal solar equipment is negligible. Importing plant and equipment from the US, Europe or Japan is still costly. In fact, it is the capital cost that makes solar power prohibitively expensive compared to not only coal power, but also wind power.
The Central Electricity Regulatory Commission (CERC) has set the norm of per-megawatt capital cost for PV solar at Rs 17 crore, and for solar thermal at Rs 13 crore, for 2009-10, compared to Rs 5.15 crore for wind power. The capital cost for coal power at present hovers around Rs 4 crore per megawatt.
The Central Electricity Regulatory Commission (CERC) has set the norm of per-megawatt capital cost for PV solar at Rs 17 crore, and for solar thermal at Rs 13 crore, for 2009-10, compared to Rs 5.15 crore for wind power. The capital cost for coal power at present hovers around Rs 4 crore per megawatt.
Hence, CERC’s feed-in tariff for PV power for 2009-10 is Rs 18.44 per kilowatt hour (kWh), and for solar thermal power it is Rs 13.4. These rates are 6-9 times higher than coal power and about three to five times higher than wind power. Seemingly, such rates would require significant central subsidy for solar power use, but the government has ensured that the profligate state electricity boards bear the burden.
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