India’s CSP projects lie in wait
Time is running out for CSP developers in India. While most of the PV projects under the Migration s
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Gearing towards Phase 2, what issues have been identified in Phase 1 and how are these going to be adapted to the next phase?
The Jawaharlal Nehru National Solar Mission (JNNSM) had a lot of promise when it took off in 2008, but insufficient accurate DNI data, the unclear future of government subsidies, challenges in financing projects, and the need for a local manufacturing base, are all issues that could deter CSP progress in India.
Why the delay?
The first batch of Phase 1 allotted 650MW of solar projects: 500MW for solar thermal and 150 MW for solar PV. While most of the PV projects under this batch, the Migration scheme, and the Rooftop PV and Small Solar Power Generation Programme (RPSSGP) have been commissioned, the 500MW of CSP projects through the JNNSM are still in the construction phase. So far, only one 2.5MW CSP plant is working – the scalable ACME Telepower solar tower in Rajasthan – and developers have until May 2013 to commission CSP projects under the first batch.
“The date for commissioning of CSP projects is still far and therefore, I wouldn’t conclude that developers are behind in completing their CSP projects. However, some of them have asked for extension of time mainly because of delay in availability of heat transfer fluid”, Tarun Kapoor, joint secretary of India’s Ministry of New and Renewable Energy (MNRE), tells CSP Today.
Some local CSP developers also claim that efficiencies and DNI data from public sources was highly misleading during Phase 1, partly due to the inadequate resources of validated data for various sites in India, with different players claiming to hold accurate information.
This led to difficulties in the execution of projects, prompting the MNRE to conduct ground solar monitoring at several locations. “Measures like the MNRE’s efforts to set up solar radiation measurement stations at various regions are increasing investors’ confidence for funding projects in India”, Hari Chereddi, managing director of Hyderabad-based Sujana Energy, tells CSP Today.
Although the JNNSM is trying to encourage the development of both PV and CSP technologies by giving each equal weight, Chereddi points out that “by allotting specific quotas for each technology, the JNNSM is dictating the ratio of technology that can be built, rather than allowing the market to select the most efficient and cost-effective technology for India”.
Financing and technology dilemmas
Another large issue has been that the solar sector is comparatively new to financial institutions in the country, as only a few of them have seen the full cycle of solar power projects and how they behave. For this reason, most financial institutions are looking at solar power projects very cautiously.
“Some institutions have expressed fears about extending finance on concerns that the technology may not perform as expected and that developers may not get paid on time”, says Chereddi. Furthermore, PV prices have fallen rapidly over the past two years and there has been no consensus on what price will make a CSP plant profitable.
Scarcity of water in some of the high-DNI areas poses yet another challenge. For example, about a 35,000km area of the Thar Desert has been set aside for solar power projects, which receives 2,000kWh of sunlight radiation per square metre annually. Although this allocated region could potentially generate between 700GW-2100GW of energy, it lacks sufficient water.
The water challenge
Most CSP technologies used today are water based, and despite the availability of some non-water based CSP systems, they are not yet cost-competitive. In addition, there is the challenge of connecting to the main grids, as most parts of the region’s CSP-installed land lack transmission lines.
Considering the high capital costs associated with CSP plants – ranging between 3.85 and 5 million euros/MW – along with the large land and water requirements, solutions need to be identified quickly. Land and water in India are both scarce commodities; therefore, CSP technologies requiring less land and water will be the most economically feasible.
Linear Fresnel technology offers a potentially promising solution for India, as it occupies the least land space, and consumes as much water as the parabolic trough (3m³/MWh for wet cooling), and even less for dry cooling (0.2m³/MWh, as opposed to 0.3m³/MWh for the parabolic trough), according to the International Renewable Energy Agency’s June 2012 CSP report (http://www.irena.org/DocumentDownloads/Publications/RE_Technologies_Cost_Analysis-CSP.pdf).
Novatec Solar and Areva Solar, the industry’s key Linear Fresnel providers, have demonstrated the technology’s competitiveness, which could be especially advantageous for India’s environment. Areva Solar’s Compact Linear Fresnel Reflector (CLFR) uses the same amount of water as the trough technology does for wet cooling and cycle makeup, and needs half as much water for cleaning.
The company’s technology has already attracted interest from the Indian market, having recently won a contract by India’s Reliance Power to build a 250MW CSP installation in Rajasthan. Under the agreement, Areva Solar will construct two 125 MW CSP plants using its CLFR technologyand will provide construction management services for the project. The first phase of the project is currently under construction, with a target commercial operation date of May 2013.
On the other hand, Germany-based Novatec Solar’s modular solar steam generator, which utilizes Fresnel technology, is an evolution of the parabolic trough, as it uses flat glass mirrors in place of parabolically curved mirrors. The flat mirrors allow a simpler solar field array, particularly compared with the conventional parabolic trough, offering lower construction costs, easier assembly, scalable production capacity, and very low water use - a feature further augmented by Novatec‘s patented robotic cleaning technology.
Meanwhile, technologies that are commercially proven or at the commercial level, namely the parabolic trough and solar tower, have longer track records for withstanding extreme weather conditions like India’s, with proven peak efficiencies of 14-20% and 23-35% respectively. In all cases, once the initial capital cost is paid off, the electricity generated using CSP would be cheaper than that of its competition.
To be continued?
When JNNSM’s Phase 1 reaches its deadline of 31st March 2013, a target of 1,100MW of grid-connected projects should have been completed. “This includes projects set up under the Central schemes as well as projects under the State Government schemes. Therefore, the target of JNNSM would in any case be achieved and whatever projects are left will spill over into the phase 2 of the mission”, notes Kapoor.
Moving forward to Phase 2, which will span over four years (2013-2017), capacity is expected to be aggressively ramped up - allotting 15 million square metres for solar collectors, with an aim of 1,000MW of off-grid solar applications and 4,000-10,000MW of utility grid-power, according to JNNSM’s official report (http://india.gov.in/allimpfrms/alldocs/15657.pdf).
So what opportunities will the Phase 2 present for CSP manufacturers and developers? Assuming more support is granted by the government, manufacturers, suppliers and developers will have incentives to start indigenous industries and concentrate on technologies suitable for India’s climatic conditions.“For (local) manufacturers and suppliers, the need for indigenous production of components such as vacuum tubing and control equipment should provide an attractive market to tap and rise to the expectation of project developers and deliver quality products”, Chereddi highlights.
According to him, project developers are looking for cheaper financing to get more projects rolling. On the field, experience from Phase 1 and corrective measures will ensure better planning and implementation from project developers, whilst ensuring improved supply chain management and cost reductions. Under the JNNSM’s vision, India should be generating 20GW of installed solar power by 2022, which will make it produce nearly three quarters of the world’s total solar energy output; forecasted by the International Energy Agency to be around 27GW by 2020.
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