THE BRIDGE TO INDIA BLOG
Utility scale projects have dominated the solar landscape in India until now. Distributed generation has remained in the backstage. But with net metering guidelines in several states, demand for distributed solar systems will increase. A recent BRIDGE TO INDIA analysis suggests that job creation will be highest in the case of installation of small rooftops. For further details, please refer to ‘India Solar Decision Brief’ titled- “India’s Solar Transformation: Beehives vs Elephants” (online downloadable version available here).
- Jobs in manufacturing, business development, project development, administration, and design & drawing will be “sticky” – i.e. will not correlate directly with new capacity
- Jobs in supply chain, logistics and installation & commissioning will correlate with Y-o-Y growth of installations whereas operation & maintenance jobs are directly proportional to the cumulative solar capacity
- The total job creation potential is highest for small rooftops (“bees”) and lowest for GW-scale plants (“elephants”)
The new government in India is considering revamping the country’s flagship National Solar Mission (NSM) and making it considerably more ambitious. The recently announced draft scheme for solar parks (refer) is only a part of this development. Next, we can expect an announcement to cancel the planned allocation of 1,500 MW. In its place, we expect a new, higher target and a more streamlined and predictable process. The plot is thickening. The government is starting to deliver on the hopes it raised.
- The original plan under phase two of the NSM was to add 9 GW between 2013 and 2017
- The 15 GW target might be spread across three phases of allocations. The allocation process for the first solar park could begin as early as next month
- There is a high probability that the NSM bids will be moved online to reduce the allocation timeframe and improve process efficiency and transparency
Today, the contribution of solar to India’s power generation is less than 0.5%. This needs to grow significantly to help meet India’s growing power requirements. A recent BRIDGE TO INDIA analysis suggests that India’s realizable solar potential is 110 GW to 144 GW by 2024. For further details, please refer to ‘India Solar Decision Brief’ titled- “India’s Solar Transformation: Beehives vs Elephants” (online downloadable version available here).
- The realizable potential in India is 110 GW to 144 GW by 2024
- Solar could contribute 10%-13% to India’s grid power supply by 2024 without destabilizing the grid
- 26-35 GW is the potential for small rooftops (“bees”), 31-41 GW for commercial rooftops (“pigeons”), 32-42 GW for utility scale plants (“horses”) and 21-27 GW for GW-scale plants (“elephants”)
Solar energy as a viable alternative to the current fossil fuel driven power generation is a well established fact. The biggest differentiator of solar with respect to any other form of energy, renewable or non-renewable, is its extreme scalability and adaptability. Solar energy can be generated from a micro scale of 1 kW to GW level ultra-mega scale solar plants. Also, solar plants can be set up at the point of consumption. This uniqueness makes solar not only a compelling option for India, but also an agent of social and economic change. In a joint report with BRIDGE TO INDIA we have deliberated on how India could drive its solar transformation (download the report here).
- India can generate as much as 145 GW of solar by 2024
- The government should put more emphasis on distributed solar to allow it to thrive next to the grid connected plants
- We should look at the merits of distributed generation in terms of the landed cost of power (LCOP) at the point of consumption, instead of the levelized cost of electricity (LCOE) at the point of generation
After nearly two years of waiting, Delhi’s net-metering policy is finally in place. Delhiites with solar rooftop systems, will be able to supply excess solar energy to the grid. This will earn them energy credits, which can be adjusted against their electricity bills. On September 2, 2014 the Delhi Electricity Regulatory Commission (DERC) announced the “Net Metering for Renewable Energy Regulations” (the document can be accessed here). It is expected to be enforced within a week of announcement.
- The distribution licensee shall connect renewable energy systems with a minimum capacity of 1 kWp
- Energy supplied to the grid will be adjusted in the monthly bill. Any remaining net energy credits at the end of financial year will be adjusted at DERC decided tariffs (to be specified)
- The net metering policy has a contradiction with the Renewable Energy Certificate (REC) regulations that needs to be resolved immediately
According to BRIDGE TO INDIA’s latest publication, the India Solar Map 2014 (download here), only about 4% of the capacity installed in 2014 (until August 2014) in India has used thin-film modules. This accounts for 18 MW of the 446 MW installed until now (depicted in the figure below).
- During 2011-13, the market share of thin film modules in India was significantly higher than the global average. This trend has completely reversed in 2014: 18 MW is extremely weak
- However, First Solar is expected to supply modules to more than 100 MW of solar projects in the succeeding months
- Very large individual projects or customers, such as the National Thermal Power Corporation of India (NTPC), which wants to build 3,000 MW of solar in the next five years, will have a huge effect on future market shares
What the landmark Supreme Court judgment on coal allocations means for solar and for doing business in India
On August 25th, India’s supreme court judged all coal block allocations to private parties after 14th July 1993 to be illegal due to “arbitrariness and legal flaws” (see ruling here). While it is not clear what will follow next – i.e. how these transaction will be either untangled or made legal in some manner, the ruling itself gives a rare insight into the Indian coal and power industry. It will have an impact on the investment climate and it will be very beneficial for solar (and other renewables).
- The ruling creates more uncertainty in the coal industry in India, further diminishing its ability to deliver power to India in time
- The coal setback further highlights the central role solar can play in India’s future energy supply
- India’s liberalization was only half way: from a state-run economy to one run by a group of insiders. It needs to now broaden and embrace competition and entrepreneurship to flourish
Today, India’s power mix is still dominated by coal, which makes up around 60% of installed capacity. Solar stands at just around 1%. With the National Solar Mission, launched in 2010, India defined an ambitious national goal of installing 20 GW of grid connected solar power by 2022. Since 2010, however, the fundamentals of energy supply in India have changed significantly. Solar was around seven times as expensive as coal to produce per kWh in 2010. This has changed to a factor of less than two.
- India’s power mix is still dominated by coal but solar is ready to go mainstream
- If India truly wants to step change and go big on solar, what would be the optimal way to achieve it?
- Initially, ultra-mega power projects will help to bring down the cost at a faster rate; but greater emphasis needs to be on distributed solar