Solar Power to Achieve Grid Parity Much Before Target

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Solar Energy Corporation of India (SECI), is a nonprofit organization created to promote solar power by developing solar parks, set up solar plants and promote new technologies in solar segment. Governance Today interacted with Dr Rajendra Nimje, MD of SECI, to elicit his opinion about the status and scope of solar power in India. Excerpts:
Rajendra Nimje
Rajendra Nimje, Managing Director, Solar Energy Corporation of India

What is India’s position in Global solar energy market?

Solar market is with the National Solar Mission in 2010 when the Mission started. Before that lot of solar activities have stared but not on a commercial scale. Solar is an emerging market with lots of opportunities. It is also very good for consumers who are paying high tariffs. There is much problem in rural areas where either the grid has not reached or power supply is available for just about 3 to 4 hours even though grid has reached. Solar is a distributed energy which will in coming five years will become a major source of energy. Solar energy, as of now, is small; we have reached only a capacity of 3,000 MW, which is much less than the capacities of other emerging or developed countries such as China, Germany or the US. But going forward we are planning to equal China’s capacity. The market is opening up and we can see lot of ancillaries coming
up, including the inverters, solar pump sets, solar light systems, solar mini-micro grids etc. I see solar power sector at a turning point. The focus now is on tapping up solar energy across the country. Earlier, only a few states like Gujarat and Rajasthan were in focus, but going forward, all states, including a state like J&K, where there is very little sunlight available, are being looked at. As we need to understand, this is a solar light energy, not solar heat energy that we are talking about. In cold weather, the radiation scope for light energy is more.

In last half a decade, the planned capacity is increased five folds. But is the industry prepared to take the lead?

The Govt’s role is to make the business environment conducive, so that private players can play a bigger role. It is not a government driven program. All the 3,000 MW programs are expected to be in private sector. The cost of the solar power has come down from Rs. 18 per unit a few years ago to Rs. 7 now a days. The distribution companies still can buy with 5.50 rupees which means the difference Rs. 1.5 is still met by the government support through various instruments. But there is still some time before you reach the parity. Once you reach parity you don’t need such support. There are some more assistance the government has to provide to support upscaling. For example, the rooftops may be brought under housing sector.

Then government is trying to give a push to large scale solar power. Solar was earlier talked about in terms of KWs but now we are talking in terms of MWs. We have already planned for 3,000 MWs and are coming up with another 2,000 MW tender now. There will be lot of other push from both central and state governments in this area. Andhra and Telangana are coming up with 500 MW each and they are witnessing great response with three times overbooking. Other governments including Tamil Nadu, Karnataka, Madhya Pradesh are also moving very first. Even Uttar Pradesh is showing keenness in solar power. So the market is getting bigger. 12 states have already initiated solar parks, which is a major step under SECI’s initiatives. Once developers build scale, the cost will come down. With rise in demand and backward linkage developing, the manufacturing in the sector will grow. With the Prime Minister’s ‘Make in India’ campaign, the trend has started to show as Chinese company Trima solar is planning manufacturing in India, which is a good sign. This would boost local employment and local content. The government would ensure that all help is provided to investors.

Do you agree that National Solar Mission has failed so far?

There is no failure. They meet the target in phases. I can say that they planned it well by not targeting too ambitiously. They knew that the initial take off is time taking and once everything settles down you can ramp it up. So accordingly they set for 1,000 MW in Ph-1, in which the country has done 600 MW, so there is not a big setback. Now for 2013-17 they have given 10,000 MW, and we hope to surpass that with a large margin. By 2022, we are talking about 20,000 MW in Solar Mission now.

SECISo there is no question of looking back. Earlier the target for solar energy share was three per cent which was mandatory, but now it has to be scaled up to more, may be up to 10 per cent. The target of three per cent was set up to 2022, with a 0.5 percent increase every year. Many states have followed, some are lagging behind. Now, we are trying to push it even further. Some states have been performing very well whereas some others such as UP and Haryana are facing some constraints. For example, there are issues involving availability of land. Now they are coming up with small patches of land and are ready to start at a small scale of say 10 MW. So the change is beginning to come.

There is a general feeling that this sector is incentive driven. How do you react?

Earlier, the scale was not there and the technology was new. So the incentive was required; we provided support up to Rs. 18 at one point of time. But periodically support amounts have been cut down as scale has gone up. So now, energy availability from solar without any subsidy, if it is grid level, is coming around at Rs. 7 per unit. But the distribution companies who are the major buyers of electricity may now want to pick up power at this price; they will buy at 5 to 5.50 rupees. So this gap is being addressed now as subsidy, which will gradually and subsequently be abolished. Government is very keen to introduce innovative ideas where subsidies are not required.

By when you think solar power can attain grid parity?

Earlier we were looking at achieving it by 2022. But with the solar usages being modified, targets are newly set, the grid parity will come in next 2-3 years, much before 2022. This has been facilitated by the sharp reduction in capital cost. If we talk about mega scale, we think we will achieve that in next 2 years.

How are new technologies contributing to the progress of the sector?

It is impacting the sector a great deal. We have solar PV technology, which is very stable with not much variation or surprises nor do we have much wear and tear. Whatever degradation we get after so many years that is also known in advance. PV crystalline, monocrystalline, poly crystalline are also very standardized now. Technology is very stable here. But talking about other technologies, the solar thermal technology, unfortunately, didn’t take off very well in this country. SECI is coming up with very aggressive push in this; we are coming up with 2 pilot projects of 50 MW each to see that the best of technology is captured at best of rates. In solar thermal, we are tapping heat energy, where as solar PV is tapping only light energy. The advantage here is it is not restricted to availability of sun light during day time. The heat storage media  are very affordable and cheaper compared to light storage. With this storage mechanism we can deliver power for 16 to 18 hours a day. There won’t be any grid instability in this case. SECI is taking up 2 projects in this, one in Gujarat and the other in Rajasthan, which is called CSP technology.

What message you have for entrepreneurs who want to invest in this sector?

Solar is such a uniquely placed sector, which will offer opportunities in a distributed way as well as in megascale. In megascale, we are coming up with larger scale solar parks, ultrapower solar power projects, large grid connected projects. India and state governments are working in tandem to support entrepreneurs to come up and set up power plants in the solar power, where license and infrastructure are taken care by SECI and state governments. So, the environment now is much more conducing for investment than ever before.