Te­lan­gana: The Sun­shine State of In­dia

A de­cen­tral­ized model and strong sup­port from the state govern­ment, Te­lan­gana which was gen­er­at­ing 20 MW of elec­tric­ity from so­lar power in 2014 now has a com­mis­sioned ca­pac­ity of about 3,500 MW which is al­most 30 per cent of to­tal power gen­er­a­tion in the

Maritime Gateway - - Contents - Sisir Prad­han

A de­cen­tral­ized model and strong sup­port from the state govern­ment, Te­lan­gana which was gen­er­at­ing 20 MW of elec­tric­ity from so­lar power in 2014 now has a com­mis­sioned ca­pac­ity of about 3,500 MW which is al­most 30 per cent of to­tal power gen­er­a­tion in the state

With ris­ing global con­cerns of cli­mate change, there has been a con­certed ef­fort to cut down on car­bon emis­sion and grad­u­ally in­crease the share of re­new­able en­ergy in the to­tal en­ergy bas­ket. Na­tional So­lar Mis­sion in 2010 had ini­tially en­vi­sioned to gen­er­ate 20GW of so­lar power by 2022, and later in 2015 the tar­get was re­vised to 100 GW. Gen­er­a­tion of 100 GW of so­lar power will prin­ci­pally com­prise of 40 GW rooftop and 60 GW through large and medium scale grid con­nected so­lar power projects.

In­dia has set a tar­get to gen­er­ate 40 per cent of to­tal in­stalled en­ergy ca­pac­ity from re­new­able en­ergy by the year 2040, and aims to at­tract US$ 100 bil­lion per year to fund its in­vest­ments in re­new­able en­ergy. In In­dia, about 8 GW of so­lar ca­pac­ity was added in 2017, which is dou­ble the ad­di­tions in 2016. As of March 2017, In­dia had in­stalled 12.2GW of util­ity scale so­lar, and Tamil Nadu, Andhra Pradesh and Te­lan­gana have emerged as the fastest grow­ing states. In 2017, nearly 60 per cent of to­tal new ca­pac­ity ad­di­tion came from Te­lan­gana, Andhra Pradesh and Kar­nataka.

So­lar en­ergy in Te­lan­gana

Te­lan­gana is one of the fastest grow­ing states in In­dia in terms of in­stal­la­tion of so­lar power. While the In­dian govern­ment fo­cused on cen­tral­ized struc­ture like so­lar parks, Te­lan­gana govern­ment’s ap­proach was on de­cen­tral­ized model. And the state has been quite suc­cess­ful with its de­cen­tral­ized model as at the time of for­ma­tion of the state 4 years ago, so­lar power gen­er­a­tion was around 20 MW and now it has a com­mis­sioned ca­pac­ity of about 3,500 MW which is al­most 30 per cent of to­tal power gen­er­a­tion in the state. Te­lan­gana is now ranked sec­ond in In­dia in so­lar power gen­er­a­tion af­ter Kar­nataka. Speak­ing about the fac­tors that helped growth in so­lar power in the state, Ajay Mishra, Special Chief Sec­re­tary (En­ergy Depart­ment), Te­lan­gana Govern­ment said that the state has achieved much higher progress in the so­lar en­ergy sec­tor than what the Cen­tral Govern­ment had tar­geted in re­new­able en­ergy sec­tor for each state. Te­lan­gana at one stage was a power deficit state and was buy­ing elec­tric­ity from neigh­bor­ing states but now it is a self sus­tain­able.

Apart from de­cen­tral­iza­tion of es­tab­lish­ing so­lar pro­duc­tion plants across the state the state also fo­cused on sin­gle win­dow clear­ance sys­tem and ease of do­ing busi­ness to en­cour­age faster ex­e­cu­tion of projects. The state’s en­ergy bas­ket now con­sists of 2,200 MW of hy­del power, 4,000 MW ther­mal power, and 3,800 MW of re­new­able en­ergy. The state govern­ment aims to gen­er­ate 5,000 MW of so­lar power by 2020. Cur­rently, the so­lar power plants in the state are largely spread across Mah­bub­na­gar, Ranga Reddy, Medak, Nizam­abad, and Adi­l­abad. The state has adapted a so­lar power pol­icy which as­sures in­vestors longterm com­mit­ment for 20 years. The state is of­fer­ing 30 per cent sub­sidy for house­hold which will fur­ther in­crease de­mand for rooftop in­stal­la­tion.

The rea­son for fast im­ple­ment of so­lar plants in south­ern states like Te­lan­gana is due to sup­port from the state govern­ment. The state has a so­lar pol­icy and the clear­ance process is very fast. Shar­ing ex­pe­ri­ence in Te­lan­gana, Anu­pam Mathur, For­mer Vice Pres­i­dent (So­lar Busi­ness), My­trah En­ergy and Founder & Direc­tor, An­mol Green En­ergy said that it took just 9 months to get 3,000 acres of land for My­trah En­ergy to in­stall a plant of 500 MW ca­pac­ity. But in Ut­tar Pradesh it would have taken about 2 years to get the con­ver­sion but in Te­lan­gana and Andhra Pradesh the con­ver­sion is done in less than 20 days.

Lo­gis­tics Chal­lenges in Im­port of So­lar Pan­els

Most of the im­ported pan­els come from China but there are sup­pli­ers in Malaysia, Sin­ga­pore and other South East Asian coun­tries as well. About 20 GW of plants are in­stalled an­nu­ally to meet the tar­get set by the govern­ment but the ma­jor do­mes­tic man­u­fac­tur­ers like Adani So­lar, Vikram So­lar, and Waa­ree Group have the pro­duc­tion ca­pac­ity of just 2-3 GW. These com­pa­nies are Grade I sup­pli­ers of so­lar pan­els. Though there are small scale man­u­fac­tur­ers but their prod­uct qual­ity is ques­tion­able.

So­lar in­dus­try comes across lot of chal­lenges since the in­dus­try is im­port de­pen­dent. High­light­ing the chal­lenges, Pra­jwal Mukkawar, Se­nior Pro­cure­ment En­gi­neer, Clean­tech So­lar said that Chi­nese man­u­fac­tur­ers and lin­ers of­fer com­pet­i­tive rates on CIF terms and the con­sign­ments mostly come via Chen­nai and Nhava Sheva. The rea­son for which the im­ports mostly come through these ports is un­der­stand­ing about the com­mod­ity and the spe­cific re­quire­ment while han­dling them. There are lack of clar­ity and con­fu­sion about the prod­uct clas­si­fi­ca­tion at other ports which de­lays cus­toms clear­ance. Duty is also levied un­der dif­fer­ent HS code. More­over, ship­ping lines ex­tend a de­mur­rage­free pe­riod of 14 days at Chen­nai and Nhava Sheva which is enough to get the cargo clear­ance from cus­toms but lin­ers are hes­i­tant to pro­vide such fa­cil­ity at other ports. The de­mur­rage can vary be­tween `8,000-25,000 per con­tainer for 40’ boxes. No­tably, Shapoorji Pal­lonji Group owned Ster­ling and Wil­son has re­cently paid an whop­ping `56 crore on ac­count of de­mur­rage charges for one of its projects. It could eat into the profit mar­gin for a so­lar plant op­er­a­tor. So, it is cru­cial to un­der­stand the ship­ment and clear­ance time for a con­sign­ment.

So­lar PV pan­els from China are ma­jor­ity shipped from Port of Ning­boz­houshan and Port of Shang­hai. PV Panel are very sen­si­tive prod­uct so it needs to be shipped with ad­e­quate pre­cau­tions in place, es­pe­cially which do­mes­tic move­ment from port to project sites. Hence, im­porters need to get in­sur­ance es­pe­cially which pro­vides cov­er­age from fac­tory till the con­sign­ment is de­liv­ered at the project site. In case of most of the im­ports, in­sur­ance cov­er­age on CIF ba­sis, it is clearly men­tioned on the bill of lad­ing that the cov­er­age is only for con­tainer yard to con­tainer yard. In such case if mod­ules are dam­aged due to mis­han­dling out­side the con­tainer yard, the im­porter can’t get any com­pen­sa­tion.

Usu­ally the lo­gis­tics cost is cov­ered un­der CIF value. But While cal­cu­lat­ing the lo­gis­tics cost, im­porters should keep in mind about in­sur­ance, and more im­por­tantly clauses and costs which are as­sumed in the lo­gis­tics cost such as load­ing/un­load­ing, han­dling and trans­porta­tion cost. Im­porters should op­ti­mize their han­dling to re­duce charges. Han­dling charges for just-in con­sign­ment is very low but if it is stocked in the ware­house the charges would be higher.

Way For­ward

Mod­ules made by top Chi­nese man­u­fac­tures costs about 32 cents/ watts in In­dia whereas a sim­i­lar qual­ity panel made by top Ja­panese com­pany like Ky­ocera Cor­po­ra­tion would cost 49 cents. So the de­mand for im­ported mod­ules from China will con­tinue in the fu­ture. Speak­ing about fu­ture sce­nario for so­lar power P. Vi­nay Ku­mar, MD In­dia Re­new­ables, Brook­field As­set Man­age­ment Inc. said that a to­tal of 8-9GW of new so­lar plants are go­ing to be com­mis­sioned in CY2018. But the in­stalled ca­pac­ity will be much higher in 2019 as the project bid­ding vol­ume in the cur­rent year is much higher as com­pared to last year. In the next two years 10,000-12,000 MW of new plants will be com­mis­sioned. The mod­ule prices have come down in the last few years and it will fur­ther re­duce which will gen­er­ate more de­mand for so­lar en­ergy. China has lot of ca­pac­ity over­hang which fur­ther lower the price of mod­ules. Bulk of the im­ports take place through ports in Mumbai, Chen­nai and Kr­ish­na­p­at­nam. The big­gest chal­lenge is to or­ga­nize huge num­ber of trail­ers to move mod­ule car­ry­ing con­tainer from ports to project site which are mostly lo­cated in re­mote lo­ca­tions.

In­dia is a trop­i­cal coun­try where sun­shine is avail­able for longer hours and in greater in­ten­sity which al­lows to tap the nat­u­ral re­source for sus­tain­able en­ergy cre­ation. Grad­u­ally with ad­vance­ment of tech­nol­ogy in so­lar en­ergy sec­tor the prices of pho­to­voltaic cells came down al­low­ing steady growth in the so­lar en­ergy sec­tor. Cit­ing the rea­son for ris­ing de­mand, Shashi Shekhar, Vice Chair­man, ACME Group said that from 2017 on­wards, the so­lar power tar­iff quoted in ten­ders has come down to about `3. It in­volves no sub­sidy ex­cept for the trans­mis­sion cost from the so­lar plant to the In­ter-state trans­mis­sion sys­tem (ISTS). The de­mand for so­lar will con­tinue as long as the tar­iff is lower than `2.40-2.50. In fu­ture the prices will fur­ther low­ered than `2 in the next 2-3 years which will in­crease de­mand for so­lar. Now the tech­nol­ogy has reached a level where so­lar power plants can fore­cast the amount of power gen­er­a­tion upto an ac­cu­racy level of 96-97 per cent due to which DISCOMS can re­duce power sourc­ing from ther­mal plants and in­crease in­put from so­lar plants. Cur­rently power stor­age cost is about `6-7 per kwh which will grad­u­ally come down with fall in lithium-ion bat­tery. So go­ing by the trend it is go­ing to be sun­nier days for so­lar in­dus­try in In­dia.

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