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In­dia's grand 2022 so­lar mis­sion picks up mo­men­tum as States join the fray with their ul­tra mega projects.

In­dia's grand 2022 so­lar mis­sion picks up mo­men­tum as States join the fray with their ul­tra mega projects.

This May, In­dia's so­lar am­bi­tions hit a new high as power tar­iffs dropped to record lows. It was the Bhadla So­lar Park in Ra­jasthan which basked in the sun's glory this time, not once but twice. Days after drop­ping to Rs 2.62 per unit, so­lar tar­iff plunged yet again to hit the lat­est low of Rs 2.44 per unit.

In the first auc­tion con­ducted by So­lar En­ergy Cor­po­ra­tion of In­dia (SECI) - the Cen­tral gov­ern­ment-pro­moted com­pany that is set­ting up so­lar parks across the coun­try in part­ner­ship with re­spec­tive State gov­ern­ment agen­cies - Phe­lan En­ergy Group of South Africa and Avaada Power won bids for Rs 2.62 per unit to de­velop 50 mw and 100 mw re­spec­tively. In the same auc­tion, SBG Clean­tech - a con­sor­tium of Softbank Group, Air­tel and Fox­conn - of­fered Rs 2.63 per unit for set­ting up a 100-mw plant.

Days later, in an­other auc­tion held by SECI at the Bhadla So­lar Park, the tar­iff slipped fur­ther to Rs 2.44 per unit. ACME So­lar Hold­ings and SBG Clean­tech placed win­ning bids of Rs 2.44 and Rs 2.45 per unit to set up 200 mw and 300 mw plants re­spec­tively. Months be­fore these jaw-drop­ping lows, the tar­iff had fallen to Rs 2.97 per unit at the auc­tion for Rewa so­lar plant, the world's largest stand­alone so­lar plant in Mad­hya Pradesh, in Fe­bru­ary.

Some of the world's largest so­lar power pro­duc­ers have been mak­ing a bee­line for Bhadla, a small vil­lage, about 200 km from Ra­jasthan's famed Jodh­pur city, in the past two years.

Set on the fringes of the Thar Desert, the Bhadla So­lar Park will be­come the coun­try's largest op­er­a­tional so­lar park when it will gen­er­ate 2,255 mw in De­cem­ber 2018. The project, be­ing de­vel­oped by the State gov­ern­ment's Ra­jasthan Re­new­able En­ergy Cor­po­ra­tion in four phases, is al­ready gen­er­at­ing 480 mw from a num­ber of units set up by big play­ers, such as For­tum Finnsurya En­ergy, Ris­ing Sun En­ergy, So­lairedi­rect, SBG Clean­tech and ACME So­lar Hold­ings, among oth­ers.

Over the past few years, a string of auc­tions across the coun­try has wit­nessed a steady de­cline in the price of so­lar power. So­lar tar­iffs have slid from a high of around Rs 16 per unit in 2008 to the cur­rent be­low Rs 3 per unit. With tar­iff head­ing south, so­lar power has at­tained grid par­ity (so­lar power price be­ing equiv­a­lent to grid price of coal or gas).

Ris­ing global so­lar power pro­duc­tion and newer tech­nolo­gies have slashed the cost of so­lar mod­ules, the vi­tal com­po­nent in gen­er­at­ing en­ergy, by about 80 per cent since 2008, bring­ing down tar­iffs the world over. In In­dia, so­lar tar­iffs have been slip­ping rather rapidly and to rather un­be­liev­able lows mainly be­cause of a rush to win SECI's auc­tions across the coun­try. The projects on of­fer at these auc­tions ap­pear to be lu­cra­tive to de­vel­op­ers as they come with as­sured re­turns and no has­sle of land ac­qui­si­tion.

"So­lar tar­iffs have def­i­nitely de­clined quite sub­stan­tially be­cause projects come bun­dled with land, evac­u­a­tion in­fra­struc­ture, State gov­ern­ment guar­an­tee and deemed gen­er­a­tion. These fac­tors al­low the fi­nal project eco­nom­ics to be very cheap," notes Re­New Power Ven­tures Chair­man Su­mant Sinha.

Big projects

The over­whelm­ing re­sponse to SECI's suc­ces­sive auc­tions au­gurs well for the coun­try's mega so­lar pro­gramme - the Jawa­har­lal Nehru Na­tional So­lar Mis­sion's (JNNSM). The plung­ing tar­iffs take the coun­try - which is es­ti­mated to have so­lar en­ergy po­ten­tial of around Rs 7,50,000 mw - closer to the JNNSM's whop­ping 1,00,000-mw (100 gw) tar­get to be met by 2022.

The JNNSM, launched in 2010 by the then UPA gov­ern­ment, has lit­er­ally un­leashed a saf­fron revo­lu­tion in the coun­try with a phe­nom­e­nal spurt in so­lar power ca­pac­ity from a mere 2 mw in 2010 to the cur­rent 12,289 mw. "In­dia's so­lar power gen­er­a­tion ca­pac­ity will cross 20,000 mw in the next 15 months," pre­dicts Union Power Min­is­ter Piyush Goyal.

In fact, the so­lar mis­sion got a mas­sive pol­icy push in May 2014 with the NDA gov­ern­ment led by Prime Min­is­ter Naren­dra Modi tak­ing charge. As chief min­is­ter of Gu­jarat ear­lier, Mr Modi had put the west­ern State in the fore­front of In­dia's un­fold­ing so­lar revo­lu­tion. Within a year of tak­ing over, the Modi gov­ern­ment raised the so­lar ca­pac­ity tar­get set un­der the JNNSM by five­fold from 20,000 mw to 1,00,000 mw.

The am­bi­tious pro­gramme is now look­ing to push up the coun­try's re­new­able en­ergy ca­pac­ity by over three times from the present 57,261

"In­dia's so­lar power gen­er­a­tion ca­pac­ity will cross 20,000 mw in the next 15 months." PIYUSH GOYAL Union Power Min­is­ter

mw to 1,75,000 mw by 2022. The huge green en­ergy tar­get will be driven by so­lar power - a mas­sive nine-fold jump from the cur­rent 12,289 mw to 1,00,000 mw by 2022 - and wind en­ergy - to dou­ble from the present 32,280 to 60,000 mw by 2022 - while the re­main­ing 15,000 mw will come from biomass and small hydro projects (be­low 25 mw ca­pac­ity).

Of the 100-gw so­lar power tar­get, 40 gw would come from so­lar parks and ul­tra mega so­lar projects of 500 mw and above that are be­ing set up across the coun­try by State and Cen- tral gov­ern­ment agen­cies as well as pri­vate com­pa­nies. An­other 40 gw or 40,000 mw will be added by rooftop so­lar projects to be in­stalled by gov­ern­ment agen­cies and in­sti­tu­tions, pri­vate busi­ness es­tab­lish­ments, in­dus­trial houses as well as house­holds. A part of the tar­get is also be­ing met by canal-top projects. The re­main­ing 20 gw will be met through an en­tre­pre­neur scheme that will en­cour­age small and medium en­ter­prises (SMEs), farm­ers and other in­di­vid­u­als to set up some 20,000 projects of 1 mw each across the coun­try.

The Cen­tral gov­ern­ment has ear­marked Rs 8,100 crore for some 84 so­lar parks with 40,000 mw ca­pac­ity set to come up all over the coun­try. Some 34 so­lar parks of ag­gre­gate ca­pac­ity 20,000 mw are at var­i­ous stages of devel­op­ment, while an­other 50 are in the pipeline.

Ac­cord­ing to the So­lar Park Scheme, re­spec­tive State agen­cies, such as State util­i­ties or State-run re­new­able en­ergy en­ti­ties, will have to tie up with SECI, the nodal agency for de­vel­op­ing so­lar parks. The State gov­ern­ments will nom­i­nate their

"The State gov­ern­ment has set a tar­get to achieve 5,000 mw of so­lar power by the end of 2018-19."

M KAMALAKAR BABU V-C & MD, New & Re­new­able En­ergy Devel­op­ment Corp of Andhra Pradesh

im­ple­ment­ing agency and also iden­tify land for their re­spec­tive so­lar parks.

These parks will house many big and small so­lar power plants de­vel­oped by mul­ti­ple play­ers se­lected through auc­tions. Power pro­duc­ers in so­lar parks will have to sell their so­lar power to State or Cen­tral power util­i­ties - these util­i­ties are re­quired to pur­chase a cer­tain per­cent­age of their power con­sump­tion as re­new­able en­ergy un­der the Re­new­able Pur­chase Obli­ga­tion (RPO) - by en­ter­ing into power pur­chase agree­ments (PPAs) with them. The power util­i­ties will bun­dle so­lar power with power from other sources and sell it to end con­sumers.

Gu­jarat un­der Mr Modi was the fron­trun­ner in set­ting up a so­lar park way back in 2012. The 500- mw Cha­ranka So­lar Park in Cha­ranka in Patan district, billed as Asia's first multi-de­vel­oper so­lar park and an­chored by Gu­jarat Power Cor­po­ra­tion, played a vi­tal role in plac­ing the State as a prom­i­nent so­lar en­ergy player in the coun­try.

Sub­se­quently, many other States have joined the fray to tap so­lar power. In fact, the cur­rent so­lar surge in the coun­try is driven by States, each try­ing to outdo the other in a true show of com­pet­i­tive fed­er­al­ism. As many as 21 States have signed up with SECI and are in the process of set­ting up 34 so­lar parks to gen­er­ate 20,000 mw of so­lar power cu­mu­la­tively.

The 1,000-mw Kurnool Ul­tra Mega So­lar Park - the coun­try's largest func­tional so­lar park with 900 mw al­ready syn­chro­nised to the grid - has placed Andhra Pradesh at the top of the list of States with the largest so­lar en­ergy in­stalled ca­pac­ity. The other States rul­ing the so­lar en­ergy chart with their big so­lar parks and mega plants are Ra­jasthan (2,255 mw Bhadla So­lar Park, which will be the coun­try's largest so­lar park when it starts op­er­a­tion in De­cem­ber 2018), Tamil Nadu (Adani Group's 648-mw Ka­mudhi plant, cur-

"For re­new­able en­ergy, it is im­por­tant that stor­age tech­nol­ogy catches up. Then only will we ac­tu­ally be able to de­cide if green en­ergy is cheaper and con­ven­tional en­ergy is costlier." GURDEEP SINGH Chair­man, NTPC

rently the world's largest op­er­a­tional so­lar plant), Te­lan­gana ( Re­New Power's 143-mw Dhar­maraopet so­lar farm), Gu­jarat (700-mw in Vav so­lar park), Kar­nataka (2,000-mw Pav­a­gada so­lar park) and Mad­hya Pradesh (750mw Rewa ul­tra mega so­lar power plant, to be the world's largest so­lar plant when com­mis­sioned in Oc­to­ber 2018).

The buzz around so­lar power has equally ex­cited the cor­po­rate world.

Many do­mes­tic com­pa­nies - such as Re­New Power Ven­tures, Wel­spun Re­new­ables En­ergy, NTPC, Re­liance Power, Tata Power, Adani En­ter­prises, ACME Hold­ings and Su­zlon En­ergy - and global cor­po­ra­tions - like For­tum, So­lairedi­rect, SBG Clean­tech, Trina

So­lar, First So­lar, ABB, Engie, Enel Green Power and China Light & Power - have been in the fore­front of the coun­try's so­lar en­ergy ex­pan­sion.

Ground re­al­i­ties

In­dia, in the mean­while, is hurtling swiftly to­wards the big 2022 so­lar power tar­get. In fact, that mega tar­get will cer­tainly play a vi­tal role in the coun­try's an­other am­bi­tious tar­get of slash­ing its emis­sion level by around 35 per cent of its GDP by 2030. As a part of this plan, In­dia is look­ing to dou­ble the share of re­new­able en­ergy in the to­tal in­stalled power ca­pac­ity to 40 per cent from the cur­rent around 20 per cent.

In­dia's 1,00,000-mw so­lar tar­get, how­ever, looks too very am­bi­tious when seen from a global per­spec­tive. The world's so­lar en­ergy in­stalled ca­pac­ity is a lit­tle over 3,00,000 mw, pro­duced over a span of around 17 years. But In­dia is try­ing to add a third of the global so­lar ca­pac­ity in the next five years and against many odds.

In fact, In­dia's first break-up tar­get of 40,000 mw through so­lar parks and ul­tra mega so­lar projects ap­pears quite re­al­is­tic. The tar­get is be­ing driven pri­mar­ily by the coun­try's RPO - which makes it com­pul­sory for power util­i­ties to pur­chase a cer­tain per­cent­age of green en­ergy - and re­new­able gen­er­a­tion obli­ga­tion (RGO) - which man­dates ther­mal power pro­duc­ers to gen­er­ate a cer­tain amount of power from re­new­able en­ergy sources. More­over, healthy com­pe­ti­tion among States to en­hance their re­spec­tive so­lar power ca­pac­ity is set to take the coun­try closer to that big goal.

How­ever, the sec­ond part of the 100-gw tar­get of 40 gw of rooftop projects is still work in progress. The growth of rooftop so­lar projects is rather mi­nus­cule at a lit­tle over 1 gw. The gov­ern­ment schemes pro­vide up to 30 per cent sub­sidy (70 per cent in case of spe­cial-cat­e­gory States) for rooftop so­lar plants and at­trac­tive feed-in tar­iffs. But the huge cost of rooftop so­lar pan­els over­rides the tan­gi­ble ben­e­fit in the eyes of cus­tomers. "Al­most all States have some net­meter­ing pol­icy. But few have a func­tion­ing net- me­ter­ing pro­gramme. Other is­sues af­fect­ing rooftop in­stal­la­tions in­clude lower ac­cel­er­ated de­pre­ci­a­tion and re­moval of the 10-year In­come Tax hol­i­day," points out Raj Prabhu, the CEO of Mer­com Cap­i­tal Group, a lead­ing global green en­ergy con­sul­tancy.

The third sec­tion of the am­bi­tious 1,00,000- mw tar­get of gen­er­at­ing 20,000 mw of power through the en­tre­pre­neur scheme is a non-starter as of now in the ab­sence of any def­i­nite guide­lines. Many ex­perts, in fact, are strongly in favour of this scheme as such projects em­power a large sec­tion of so­ci­ety by in­volv­ing farm­ers, SMEs and lo­cal com­mu­ni­ties. More­over, for a vast coun­try, like In­dia, with a con­sid­er­able num­ber of peo­ple de­prived of power, such small, com­mu­nity-con­trolled projects can be de­signed to suit the needs of the com­mu­nity. Such small projects dot the land­scapes of Ger­many, and Ja­pan.

But these small projects can suc­ceed in In­dia only when the coun­try has ef­fi­cient de­cen­tralised en­ergy sys­tems or mi­cro-grids that can cater to en­ergy needs of lo­cal com­mu­ni­ties. In­ci­den­tally, Andhra Pradesh is fo­cus­ing on mi­cro-grids and has also taken up two pilot projects to build stor­age fa­cil­ity for so­lar power near small, com­mu­nity-cen­tred so­lar plants. If these pilot projects suc­ceed, it can change the very dy­nam­ics of green en­ergy in In­dia. It will per­haps put an end to the cur­rent ir­ra­tional ob­ses­sion with big projects and nudge pol­i­cy­mak­ers and the in­dus­try to go in for smaller plants.

The big so­lar projects com­ing up across the coun­try will end up get­ting stuck with a creaky trans­mis­sion sys­tem. The am­bi­tious green en­ergy cor­ri­dor project en­vis­aged in 2011 as an al­ter­na­tive trans­mis­sion network is yet to see the light of day. The other ma­jor hur­dle in the way is the need for huge in­vest­ments for the big so­lar goal at a time when the bank­ing sys­tem is crum­bling un­der the weight of bad debt.

Frag­ile fi­nances of State elec­tric­ity boards (SEBs), the ul­ti­mate buy­ers of al­most all power gen­er­ated in the coun­try, are also a cause for con­cern. In a bid to at­tract big in­vestors into so­lar parks, the Cen­tral and State gov­ern­ments have promised guar­an­teed pur­chase of power in case SEBs hap­pen to de­fault on pay­ments. How­ever, these guar­an­tees will come back to haunt the gov­ern­ments in fu­ture if the power util­i­ties fail to im­prove their fi­nan­cial health.

For all the eco-friendly ad­van­tages of so­lar projects, they are huge landguz­zlers. Ac­cord­ing to in­dus­try es­ti­mates, 1 mw of so­lar project roughly re­quires about 5,000 acres of land. Vast tracts of land will have to be ac­quired to gen­er­ate 1,00,000 mw of so­lar power at a time when land ac­qui­si­tion has more or less turned into a taboo.

For­tu­nately, a few States are us­ing in­no­va­tive ways to har­ness so­lar power with­out harm­ing the in­ter­ests of land own­ers. Gu­jarat, for in­stance, has come up with canal-top projects by mount­ing so­lar pan­els over its large network of canals linked to the Sar­dar Sarovar Dam over the Nar­mada. This has not only solved the vexed land ac­qui­si­tion prob­lem but also helped in pre­vent­ing evap­o­ra­tion of wa­ter in the canals. The mega Pav­a­gada so­lar park in Kar­nataka too has de­signed a unique model to see the project through. It has not ac­quired an inch of land. In­stead, it has taken all land on lease for 25 years from land own­ers for an an­nual rent of Rs 21,000 per

"We have learnt an im­por­tant les­son from the Rewa project, and that is, if we have bet­ter, well-pre­pared projects, both for­eign and In­dian in­vestors will par­tic­i­pate in them." MANU SRIVASTAVA, Prin­ci­pal Sec­re­tary, NRED, Mad­hya Pradesh "Al­most all States have some net­meter­ing pol­icy. But few have a func­tion­ing net-me­ter­ing pro­gramme. Other is­sues af­fect­ing rooftop in­stal­la­tions in­clude lower ac­cel­er­ated de­pre­ci­a­tion and re­moval of the 10-year In­come Tax hol­i­day." RAJ PRABHU CEO, Mer­com Cap­i­tal Group

acre and made them part­ners in the project.

As big num­bers keep pop­ping out of on­go­ing mega so­lar projects, some ex­perts and tech­nocrats have been red-flag­ging the fu­til­ity of over-re­liance on so­lar en­ergy. So­lar power, or for that mat­ter, any other green en­ergy source, has its own lim­i­ta­tion, given the lim­i­ta­tions of na­ture, ab­sence of af­ford­able stor­age fa­cil­ity, and so on. Green en­ergy at best can com­ple­ment con­ven­tional en­ergy but not re­place it.

So, it would be too naive to ex­pect green en­ergy en­tirely re­plac­ing con­ven­tional en­ergy in the fore­see­able fu­ture. It would also be fool­ish to de­monise coal and think of ban­ish­ing it away from the en­ergy port­fo­lio. "For re­new­able en­ergy, it is im­por­tant that stor­age tech­nol­ogy catches up. Then only will we ac­tu­ally be able to de­cide if green en­ergy is cheaper and con­ven­tional en­ergy is costlier," notes Gurdeep Singh,the chair­man and man­ag­ing di­rec­tor of NTPC, In­dia's largest ther­mal power pro­ducer which is also a ma­jor player in the re­new­able en­ergy sec­tor.

A wiser op­tion hence would be to look for cleaner coal and also seek to strike a right bal­ance be­tween con­ven­tional and non-con­ven­tional en­ergy sources. A right mix of clean coal and green en­ergy sources could per­haps work won­ders.

PM Naren­dra Modi: Chief ar­chi­tect of In­dia's mas­sive so­lar en­ergy ex­pan­sion

Jaw-drop­ping fall in tar­iffs in suc­ces­sive auc­tions takes In­dia closer to the big 2022 so­lar en­ergy tar­get.

Bhadla will be­come the coun­try's largest op­er­a­tional so­lar park once it goes on stream in De­cem­ber 2018.

In­no­va­tive canal-top projects and smaller plants can bet­ter suit a vast coun­try like In­dia.

Adani Group's Ka­mudhi plant is cur­rently the world's largest op­er­a­tional so­lar plant.

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