THE FUTURE LOOKS BRIGHT
A new era in renewables is clearly round the corner. Things seem to be moving on the right track, but there is a need to have clear-cut norms and proactive policy to coagulate funds and resources right along the board in the renewable energy space
Jaideep Mishra
Solar power remains the brightly promising spot in the field of renewable energy, and its prospects seem to be improving by the day. Already, the mavens abroad are of the opinion that within three to seven years, unsubsidised solar power could cost no more than electricity generated using fossil fuels. We do need to have clear-cut norms and proactive policy to coagulate funds and resources right along the board in the renewable energy space. Consider wind-driven power generation. It is estimated that wind energy is about 2% of the total solar energy reaching the earth, which is almost 2 billion tonnes of oil equivalent a year, or 200 times that's consumed by all the world's economies. However, only a small fraction of the potential has been tapped, although India is one of the world leaders in installed wind power generation with a capacity of over 10,000 mw. But actual utilisation, read plant load factor, in wind power can be modest, dependent as it is on such parameters as air density, speed etc.
A new era in renewables is clearly round the corner. Note that corporates like Indo-Solar and Orient Green Power have recently been tapping the capital market via IPOs. But a bit of perspective is called for, when telescoping into the future. The expert projection is that by 2020, global installed solar capacity could be 20 to 40 times its current levels. However, even if all of the forecast growth does occur, solar power will represent only about 3 to 6% of installed electricity generation capacity in 2020. Nevertheless, the economics of solar power are rapidly changing for the better due to scale economies, attendant cost reductions and technology evolution. Besides, as fossil fuel prices rise, the relative prices of alternative-energy sources like solar and wind power would surely fall.
The bottom line is that continued improvement in solar-cell designs and materials can be expected for years, but the mavens seem not to have sighted the appearance of a radical breakthrough or the emergence of a dominant technology on the horizon. At present, the ground reality is that three technologies-silicon-wafer-based and thin-film photovoltaics and concentrated solar thermal power-are competing for cost leadership. Each has its advantages for certain applications, but none has the overall advantage. Major innovations and shifts in the relative cost comparison of the relevant technologies could well occur. Meanwhile, Indian sugar mills have committed to supplying one billion litres of ethanol to petroleum-products marketing companies during next sugar year starting in October. The Centre has fixed an ad-hoc uniform ex-factory price for ethanol pan-India at ` 27 per litre, and so 5% ethanolblending with petrol will be restarted. Oil marketing companies had been blending 5% ethanol with petrol since 2000 until October 2009, when there was a shortfall. There are plans to hike the blending rate to 10% and supply bio-diesel as well.
In parallel, the stated objective of the Jawaharlal Nehru National Solar Mission is to ramp up capacity of grid-connected solar power generation to 1,000 megawatt within three years, by 2013. The plan is to commission an additional 3,000 mw by 2017, incentivised by mandatory purchase obligation of renewable energy by power utilities, and backed by preferential tariff setting. Already, policymakers aver that it is quite possible to reach and even exceed a target of 10,000 mw of installed solar power generation capacity by 2017, with enhanced financial and technology-transfer support. The ambitious target of the mission for 2022 is to have 20,000 mw or more of solar capacity up and running. The actual achievement would be crucially dependent on the learning and capacity building during the first two phases.
Meanwhile, the centre has proposed innovative pricing to boost both the demand and supply of solar power. In order to facilitate gridconnected solar power, a mechanism of bundling the solar output with power from cheaper unallocated supply quota of generation major NTPC's coal-based thermal plants has been outlined. The idea is to evacuate the resultant power to distribution utilities at the price for coal-fuelled power, and okayed by electricity regulator CERC. It would make ample sense for policymakers in the states of the Union to compare notes and co-ordinate matters for the greater good. Abroad, the competition for productivity gains in solar power generation seems to be hotting up. Reports say key technologies and processes are competing to win the "lowest-cost laurels," and it's not yet clear which is going to win and emerge as the industry standard. Already component manufacturers overseas such as First Solar, QCells, and SunPower appear to have gained first-mover advantages, while silicon refiners like Dow Corning, REC Solar, and Wacker have occupied vantage positions in the marketplace.
The figures suggest that over the last two decades, the cost of manufacturing and installing a photovoltaic solar-power system has decreased by about 20% with every doubling of installed capacity base. The result is that solar power has been gradually moving toward cost competitiveness in some regions abroad. The expert analysis is that by 2020 at least ten regions globally, with strong sunlight, will have reached grid-parity. The price of solar electricity is expected to fall from upward of 30 cents per unit to 12, or perhaps even less than 10, cents. Also, from now until 2020, installed global solar power capacity would likely grow by about 30 to 35% per annum. So, solar power capacity worldwide would step-up from roughly 10 gigawatts currently to about 200 to 400 GW.
But note that while the cumulative solar capacity by the end of the decade would represent only about 3% of global electricity output, the roughly 20 to 40 new gigawatts a year of installed solar capacity would amount to as much as 10 to 20% of annual new power capacity over the period. However, it would not mean much in terms of reduced carbon emissions. The estimates suggest that the fresh solar power capacity would abate only about 125 to 250 megatons of carbon dioxide-roughly 0.3 to 0.6% of global emissions in 2020.
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