28jul_astonfield_power plants in india
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July 2010
Astonfield Renewable Resources LtdSolar power plants in India : achieving 1 GW +opportunities and challenges
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Indias Power Sector : Points to Ponder
Current power mix is fossil fuel dependent and hasfollowing negatives
Price volatility/ subsidy dependent
Energy security Impact on environment
Long gestation period
Utility scale carbon-less SOLAR POWER, with NILenvironment impact is need of the day to support
Sustainable rural development (electricity inrural areas)
Use existing T&D network
Decentralized power generation at remotelocations across the country
Replacement for existing DG sets being usedfor irrigation where subsidised cost is Rs 15/kwh
Utility scale solar power addresses Indias growing energy needs
Indias Installed Generating CapacityTotal = 152,000 MW
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India Faces Significant Energy Challenges in
Achieving Its Development Goals Over the Next 20 Years
StrengtheningEnergy Security
Traditional thermalplants supply over 60%of the nations currentpower
India imports over 65%of its current petroleumand coal requirements,expected to grow asdomestic coal reservesdiminish
25GW of captive dieselgeneration has sprung up
to support industrialgrowth 90+% of fuelimported
StrengtheningEnergy Security
Traditional thermalplants supply over 60%of the nations currentpower
India imports over 65%of its current petroleumand coal requirements,expected to grow asdomestic coal reservesdiminish
25GW of captive dieselgeneration has sprung up
to support industrialgrowth 90+% of fuelimported
Electrifyingthe Masses
42% of the populationhas no access toelectricity (90 millionhouseholds)
Most traditional thermaland hydro plants locatedfar from distributedpopulations, contributingto high transmissionand distribution lossesof over 27%
Electrifyingthe Masses
42% of the populationhas no access toelectricity (90 millionhouseholds)
Most traditional thermaland hydro plants locatedfar from distributedpopulations, contributingto high transmissionand distribution lossesof over 27%
Meeting RisingPower Demand
Historically there hasbeen a 10GW powershortage per annum,with a 10.5% peak timeelectricity shortage
Over the next 5 years,per capita consumptionis expected to jumpfrom 580kWh to1000kWh, driving totalshortage above 25GW
Meeting RisingPower Demand
Historically there hasbeen a 10GW powershortage per annum,with a 10.5% peak timeelectricity shortage
Over the next 5 years,per capita consumptionis expected to jumpfrom 580kWh to1000kWh, driving totalshortage above 25GW
Source: Ministry of Power, President of India Energy Review
Clean, locally-sourced renewable energy will be essential if India is toachieve targeted long-term GDP growth of 9-10% p.a
Clean, locally-sourced renewable energy will be essential if India is toachieve targeted long-term GDP growth of 9-10% p.a
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President of India Energy Review:Demand Increase Will Drive GreaterEmphasis on Renewable Energy
President of India Energy Review:Demand Increase Will Drive GreaterEmphasis on Renewable Energy
The Government of India Has Recognized That Renewable
Energy Must Play a Critical Role in Addressing the Energy Gap
Source: Ministry of Power, President of India Energy Review
147,716MW
400,000MW
Thermal
Diesel 1%Gas 10%Coal 52%
Nuclear 3%
Hydro 25%
Renewables 9%
Solar
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Solar power will be a significant source of global energy mix in
future , with critical mass building after reaching grid parity
Oil
Coal
Gas
Nuclear Power
Hydroelectricity
Biomass(traditional)
Biomass(advanced)
Wind
Solar power(photovoltaics andsolar thermalgeneration)
Solar thermal
(heat only)
Other renewables
Geothermal
200
400
600
800
1,000
1,200
1,400
1,600
0
2000 2010 2020 2030 2040 2050 2100
PrimaryEnergyUse(EJ/a)
Source: Climate Change
Solar subsidies
required
Solar hits
grid parity
Solar cheaper than
conventional energy
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With government support starting in 2009, solar can
achieve Peak Grid Parity as early as 2014-15
Source: Stephen ORourke/Deutsche Bank / Astonfield Analysis
7%
6%
PHASE I(Govt Policy
very important)
PHASE II(Post- Govt Policy)
5%
4%
India Estimated priceof peak electricity today:Rs. 6.50/KWh
Convergence /Peak Grid Parity
Post 2014, India can substitute expensive sources such as diesel with solar to meet growing peak power demand
Astonfield estimates that base load grid parity can be achieved by 2020-23 - beyond that point, abundantlyavailable domestic solar power will be cheaper than imported coal, positioning India to be energy independent
*
* Assumes that conventional power tariff escalates at roughly 5-7% per annum
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Regulatory and Policy Developments in Recent Years Have
Increasingly Supported the Growth of a Solar Sector in India
Ministry of New andRenewable Energies (MNRE)
announces 50MW programwith tariff of Rs.15/kWh
Leading states announceindependent whollystate-sponsoredprograms:
Gujarat 500MW
Rajasthan 50MW
Tariffs declared by stateshover around the Rs.15/kWh range
Prime Minister announcesJawaharlal Nehru NationalSolar Mission targeting20,000MW by 2022, with
Phase 1 of 1,000MW by 2013backed by Central budget
Mission is treated as a corecomponent of Indias NationalAction Plan on ClimateChange and as a criticalenabler of sustainable growth
Tariff increases fromRs.15/kWh to Rs.17.91/kWh
India has seen a movement from dispersed,small-scale programs to a cohesive, large-scale national platform
India has seen a movement from dispersed,small-scale programs to a cohesive, large-scale national platform
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Jawaharlal Nehru National Solar Mission
Government of India announced Jawaharlal Nehru National Solar Mission in November2009 to promote solar power in the Country
Capacity addition in JNNSM envisaged in 3 phases
Phase 1 : 2009 -13 : 1100 MW
Phase 2 : 2013 17 : 3000 MW
Phase 3 : 2017-22 : cumulative capacity addition of 20000 MW by 2022
Under phase 1 , program designed as under :
Equal split of 50: 50 between solar PV and solar thermal
Existing projects under development meeting specified criteria eligible for migrationunder JNNSM , balance capacity to be allocated on Expression of Interest basis
Draft EOI guidelines limit capacity allocation to 5 MW per developer for PV : benefits ofeconomies of scale might be hampered
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Jawaharlal Nehru National Solar Mission : Challenges for
Developer
Achieving Financial Closure :
Bankability of the Power Purchase Agreement : Deemed Generation, PaymentSecurity Mechanism
Economies of scale
Sourcing restrictions under EOI
Tariff for solar PV plants in various states
JNNSM M.P. Rajasthan Gujarat Karnataka
Tariff (Rs /kwh)
Rs 17.91 Rs 15.35 Rs 15.32 Rs 15(year 1-12)
Rs 5 (year13-25)
Rs 14.50
Duration 25 years 25 years 25 years 25 years 25 years
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JNNSM : structured to promote project viability and rapidexecution
Solar IndependentPower Producer (IPP)
States to initiate solarprojects on allocation basis
Final approval to be givenby Central stakeholders tothose developers withstrong technical andfinancial tie-ups
IPP signs standard country-wide PPA with NTPCNVVNL (not 28 versionsacross States) at Rs17.91*/kWh as per CERCguidelines
NTPC PowerTrading Company
NTPC NVVNL is the soleofftaker of grid-connectedsolar power: AAA ratedcredit
NTPC NVVNL pays IPP atRs 17.91/kWh tariffsubsidized by $950 milliondedicated Central budget
NTPC NVVNL blends solarofftake with conventionalenergy to achieve bundledrate of Rs ~5.5/kWh forresale to States
StateUtilities
State utilities purchasepower from NTPC NVVNLat Rs ~5.5/kWh, the lowerpricing end of power tradingmarket rate in India
Purchase allows states tomeet solar power purchaseobligations (currently statedat 0.25%), with minimalimpact on state levelizedtariff
RECs allow states withoutstrong solar resource to
meet solar power purchaseobligation
Rs 17.91per kWh
SolarFeed inTariff
Rs ~5.5per kWh
BlendedPowerTrading
Rate
* CERC solar PV feed-in-tariff guideline for FY2010-12
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Each State ERC can ensure strong foundations for solar sector
rollout even as JNNSM is being rolled out
Initiate study to confirm CERC solar tariff guidelines (with adoption ofspecific CUF assumption for each state)
Declare a tariff for Solar power
Pursue allocation approach rather than competitive bidding in early years ofthe program (incubation is still required)
Declare an RPPO with solar-specific carve out
Work with Discoms to standardize bankable PPAs for solar projects
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Key issues impeding the growth of solar program
Affordability of
power (Outlook ongrid parity)
Industry players
(across the valuechain)
Government Policy
environment(subsidy)
RegulatoryFramework (RPPO,
tariff orders)
Ground level issues(land, permitting)
Open access toconsumers
Central / State government need to support the solar program by way offeed in tariff subsidy and regulatory framework till grid parity is achieved
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To realize potential of solar power, India should have
capabilities across PV Value chain
Crystalline Value Chain
7% 7% 8% 13% 30%
(%) = relative weight of cost structure
35%
Polysilicon Ingot Wafer Cell Module Balance of System
PV Raw Materials PV Deposition & Module Integration Module Encapsulation
Schematic diagram of a CdTe moduleThin-Film manufacturing line where depositionand integration take place
Glass that is used as substrate
Thin film Value Chain
India can be a global solar PV manufacturer , though presence across the valuechain is imperative
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Robust solar policy and right regulatory framework required to
stimulate demand for solar power generation
1. Stimulating generation creates domesticdemand for solar manufacturing and fulfillsnations electricity needs
15-20 GW of demand stimulation toattract large scale cost efficient
manufacturing
2. As demand is created, a vibrant manufacturingbase opens up, creating domestic jobs andfueling overseas exports
Drive manufacturing of all solar technologies
and create export base market
3. With an established downstream demand, investment inR&D and talent flow into the sector, helping India
become a global solar technology hubGrowth ofthe valuechain beginsdownstream
Stimulating generation lays the foundation for long-term viability of the sector
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Enabling regulatory framework is a must at state level based on
CERC notified normsSolar ProgramDevelopment Required: Why this is necessary:
In the absence of an RPPO mandate for PV solar ,states will steer towards cheaper renewable energy
sources and subsidies will be compromised
Gives developers and manufacturers line of sight tostandardized project return expectations acrossStates and facilitates early installations
Accelerate Adoption of CERCGuidelines at State Level
Renewable Power PurchaseObligations
Development delays are costly barriers fordevelopers - land assistance, permits should begranted through a single window clearance
Ensure Administratively SimpleProcesses
Given fast implementation cycle for solar, seriousdevelopers can accelerate new capacity addition ifsubsidy process is streamlined
Streamline Central SubsidyApplication and Payment Process
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Concessions in hand in 7states and active businessdevelopment across 13
states
20MW of solar and 10MW ofbiomass in execution in 2010
Total of 803MW of solar and
110MW of biomass currentlyin the MOU/Allocation stage
Close to 2,000MW of pre-MOUopportunities currently in thepublic sector pipeline
Three offices across India andglobal HQ in New York City
West Bengal
2x 5MW Solar10MWBiomass
Rajasthan30MW Solar
Gujarat200MW Solar
Haryana3MWSolar
Karnataka
10MW Solar
Andhra Pradesh
250MW Solar
Bihar300MW Solar100MW Biomass
Astonfield Office
With Government Concessions Across the Country, Astonfieldis the Largest Diversified Renewable Energy Company in India
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