The
ministry of New & Renewable Energy (MNRE) has done commendable work in terms
of conceptualizing, drafting, launching and implementing the Jawaharlal Nehru
National Solar Mission over the last year and a half.
The year 2010 will be marked as the year when Jawaharlal Nehru National Solar
Mission (JNNSM) was launched in all earnestness. The Mission has already started
showing signs of great promise for the future - in terms of up-scaling and
mainstreaming the use of solar energy as a sustainable source to address the
intertwined issues of enhancing India’s energy security and helping mitigate
global warming and climate change. The JNNSM targets of generating 20,000 MW of
grid connected and 2000 MW of off grid solar power by 2022 are truly impressive.
By following the global experience of connecting solar power to the grid through
megawatt scale solar power plants, India has joined the global solar bandwagon
in a big way.
Teamwork by government agencies
The
Ministry of New and Renewable Energy (MNRE) has done commendable work in terms
of conceptualising, drafting, launching, and implementing the JNNSM over the
last one year along with the Ministry of Power (MoP). The National Th ermal
Power Corporation (NTPC) has played a key role through the NTPC Vidyut Vyapar
Nigam (NVVN) in organising the short listing of the applicants for setting up
large solar projects in phase 1 of the JNNSM (January 2010 - March 2013).
Similarly, the Indian Renewable Energy Development Agency (IREDA) has played a
vital role as the nodal agency for selection of applicants for the up to 2 MW
capacity, rooftops PV and small solar power generation programme (RPSSGP). Of
course, all these initiatives would not have been possible without the pivotal
role of the Central Electricity Regulatory Commission (CERC) which came out with
a levelised tariff for the solar power plants. This became the basis for the
solar tariff set by the State Electricity Regulatory Commissions (SERCs) and in
many cases the SERCs decided to emulate the CERC tariffs. It is laudable that
all these government ministries and agencies worked in tandem to launch the
first set of large commercial plants under the JNNSM and it is creditable that
we have some 900 MW of solar power plants already underway in the first year of
the Solar Mission.
Technology allocation
MNRE suggested allocation of 60 per cent of the projects in the Mission for
concentrated solar thermal (CST) and 40 per cent for solar photovoltaic (PV)
technology, in its effort to try out other technologies. After discussion with
the Indian solar industry, the government has adjusted the allocation to 50-50
between thermal and PV. In India, the PV technology has established itself over
the past two decades and there are some 40 manufacturers of solar PV modules in
the country today. In comparison CST technology is yet to develop a
manufacturing base. The Government can validate CST in the Indian context by way
of demonstration projects and subsequently on a commercial scale. While there
are specific advantages for PV, such as its ability to be applied at micro scale
in terms of individual products like solar home lights and lanterns as well as
at rooftop PV systems and megawatt scale plants; CST also has its advantages
such as its capability to hybridize with gas and other sources and the capacity
for power storage, though the costs for storage are prohibitively high at
present.
NVVN bidding
Th e government went for reverse bidding for the 5 MW PV projects totalling
150 MW and for the 10-100 MW CST projects totalling 470 MW. Th e bidding was
organised by NVVN based on highest discount offers. This resulted in aggressive
bidding and the resultant tariff s of Rs 11 to 12.50 per kWh are as much as
30-40 per cent lower than the CERC tariff of Rs 17.91, which was set after due
diligence and taking into account the Indian and global solar industry data as
well as discussion in an open public hearing. The aggressive bidding has enabled
new enthusiastic players to enter the Indian solar market, who can seek
assistance from the Ministry and banks for funding as well as technology, for
the success of the JNNSM. Th e Ministry may look at addressing the gap in solar
tariff in the next round of bidding. CERC tariff s for the whole country can be
adjusted region wise such that eastern and north eastern parts of India also
receive solar investments.
Made in India
The Ministry has mandated use of indigenous PV modules in Phase 1 of JNNSM.
Th is proviso will be extended to the use of indigenous cells in the next phase.
The move has been welcomed, since it gives a level playing fi eld to the Indian
PV manufacturing industry. Th e proviso applies to the use of crystalline
silicon (C-Si) modules - an established technology accounting for 85 per cent of
the global market. However, import of non C-Si modules like thin fi lm
(amorphous silicon, cadmium telluride etc.) have been possible. This has led to
a situation where the overstretched-for-low-cost projects in the NVVN list may
import thin film technology without considering the long term sustainability and
performance guarantee of the projects.
The provision is necessary to attract further investments for the
manufacturing of solar PV into India. The numerous announcements made by Indian
and foreign players to start PV manufacturing in India show that the move is in
the right direction. The state governments, which are implementing ambitious
solar power plans, should be encouraged to include a ‘Made in India’ clause
in their respective policies.
Off grid
The
Ministry’s idea to create a range of channel partners like system integrators,
banks and micro finance institutions (MFIs), NGOs, financial integrators and
renewable energy service companies, apart from the State Nodal Agencies (SNAs),
to implement off grid projects and obtain subsidy directly from the MNRE is a
good one. It augments the process of implementation of the off grid segment of
the JNNSM which foresees a target of 200 MW in Phase 1 and 2000 MW by 2022. Th
ese channel partners will have to get themselves rated or accredited through
agencies appointed for the purpose (CRISIL or ICRA etc.) and based upon the
rating they can submit their project proposals. Each project proposal can
accumulate diff erent off grid initiatives totaling 1 MW at a time. This is a
sound idea to effectively and efficiently get projects implemented. However, the
critical factor for success will be the speed and ease with which the channel
partners get their payment from the government.
One
suggestion is to make the entire transaction online, including submission of
project proposal to MNRE’s committee, tracking of the application, and finally
payment of the subsidy to the channel partner/ beneficiary - so that human
interface and consequent delays are eliminated. Off grid and de-centralized
renewable energy applications are the most appropriate for a vast and rural
country like India where the grid cannot be extended everywhere. We have the
successful example of Chhattisgarh where almost 900 village level micro plants
are running on solar energy for the last 2 to 3 years. This model can easily be
extended to the neighboring states of Bihar, Jharkhand and Orissa where the
conventional electricity supply in rural areas is similarly hindered. Further,
there is the example of Uttar Pradesh where one company has sold more than
1,10,000 solar home lighting systems. Th is can be amplified to cover all
un-electrified households in the country. This is sought to be achieved by
roping in regional rural banks through the National Bank for Agriculture and
Rural Development (NABARD) - another welcome step.
Capacity building, research and development
The inaugural year of the JNNSM was perhaps rightly spent in getting the
first batch of projects off the ground but in its second year the Mission must
focus on some core and essential areas such as capacity building and promoting
research and development. The MNRE has recently prepared a human resource
development plan for the renewable energy sector. This should be implemented in
earnest through close cooperation with the Indian industry because shortage of
trained and skilled manpower is already being felt by the Indian solar industry
due to its current relatively small size. One of the most important targets for
JNNSM is to achieve grid parity of solar power by 2022. This is sought to be
accomplished by generating large volumes to drive down costs by bringing in the
play of Economies of scale in manufacturing and project implementation.
The second aspect of this strategy has to be result oriented technological
research and development. The JNNSM document talks about setting up a national
council to promote solar research. Th ere is no doubt that there is a need to
enhance the level of research to find new materials, improve efficiency of the
existing ones, reduce the cost and improve the efficiency of balance of systems
(BOS), optimize solar power through tracking mechanisms and make storage of
power cost effective and long lasting etc. The government can come out with
another policy like the Special Incentive Package Scheme (SIPS) which allows for
20-25 per cent grant for the setting up of solar PV manufacturing, subject to a
minimum investment of Rs 1000 crore. The new policy should be pegged at lower
threshold levels and must include poly-silicon and wafer manufacturing as well
as BOS.
Hopefully, 2011 will be the year when solar products and systems will become
a consumer item, which can be bought off the shelf in shops and markets. For
this to happen, it is essential that the respective regulatory agencies fix
solar rooftop tariff s and the respective state governments extend support in
the form of capital subsidies to make rooftop solar power systems affordable. If
this is done in mission mode, individual consumers will be incentivised to start
setting up their own rooftop solar power plants, as has been the experience in
Germany. This idea could help solve the current problem of 12 per cent demand
supply gap in the power sector.
Road ahead
The first year of the Solar Mission has been an eventful one. We need to keep
up the momentum with the immediate goal being the timely and successful
achievement of the Phase 1 targets and the next goal being to prepare for Phase
2 based upon the experience and learning from Phase 1. If all of us, from the
industry and government join hands with a positive and proactive approach, we
can surely achieve it.