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SPV Power Technology in IndiaSatyendra KumarLanco Solar, Indiasatyen.kumar@lancogroup.comASEAN-IndiaWorkshop on Cooperation in New and Renewable Energy

05-06 Nov., 2012Vigyan Bhawan, New Delhi

LANCO Group, All Rights ReservedPower Sector in India Role Solar Can PlayIndias Current Solar PV Installation BaseAgendaSPV Technologies Lessons LearnedConclusions Source: World Bank, CEASource: EIA, CEAIndia Electricity OpportunityIndia per capita Electricity Consumption is lagging well behind World Average and this would catch up fast owing to rising levels of Disposable IncomeAn average of 16 GW of power generation capacity installations required each year till 2020 to meet fast growing demand for electricity powerSource: D&B Industrial Research ServiceIndia has a huge gap to fill in terms of capacity installations to cater to demand by 2020India records very low levels of Energy per capita globally and this will change dramatically, very fast.Disposable Income / GDP is a good indicator to rise in energy demand3India has huge potential for solar power deploymentSource: MNRE, Edelweiss Research (As at June30, 2012Solar Power Density in IndiaIndia receives on an average 4-7kWh/m2 of solar energy daily with an average of 250-300 sunny days in a yearRajasthan and Gujarat receive maximum radiation in the range of 66.6 KWh per square meterCumulative grid connected Installed solar power capacity is quite low in IndiaAccounting for a negligible proportion of Indias power capacityCapacity additions in Indian solar industry have been miniscule as compared to the additions globallyIndia yet to optimally utilize its solar potentialGrid connected Solar Power(Cumulative Capacity)1,035 MWAdditions during last year (FY12)446 MWOff-grid Solar PV plants(Cumulative Capacity)85 MWSolar Water Heating Collector Area(Cumulative Capacity)5.63 Mn Sq. m

Solar installed capacity IndiaSource*Potential (MW)Installed (MW) as on Jan12Wind Power45,00016,179Biomass16,0001142Small Hydro15,0003300Cogeneration-Bagasse3,5001952Waste to Energy2,70074SolarUnlimited481Source: * MNRE - Development of Conceptual Framework for REC Mechanism4India Poised to be a Major Global Contributor E&Y Solar energy attractiveness Index : India ranked 2nd in the world only behind USARankCountryInstalled capacity (GW) in 2011Solar Power Target Clean Energy TargetKey incentives1USA4.62020 :~ 16 GW17%Production / Investment tax credit2India0.52022 : 22 GW15.90%FiTs, REC, Capital subsidy3China3.02015 : 9 GW 2020 : 50 GW15% of primary energyFeed-in-Tariffs (FiTs), GBI for rooftop an biding installed PV, Tax incentive for PV4Italy12.4NA17%FiTs, REC, Tax incentive5Spain5.32020 : 8-9 GW20%REC, Tax incentive6Australia1.3NA20% of total consumptionGeneration Based Incentive (RBI), Renewable Energy Certificate (REC)7Japan5.02020 : 28 GW22%FiTs, REC, Tax incentive8Germany25.02020 : 50-70 GW35% (50% by 2030, 65% by 2040, 80% by 2050)FiTs, REC, Tax incentiveIndia, USA rapidly advancing; EU slow and steady

USA : Continues to grow rapidly with a 300 MW in Arizona receiving approvals. Expected to remain the largest solar market in world in near futureIndia : Rapid growth seen in high potential solar states of Rajasthan and Gujarat. Gujarat launches Asia's largest solar park of 600 MWChina : Many large-scale plants commissioned. Hit by oversupply in the international export marketItaly, Spain, Germany : Affected by the sovereign debt crisis and a weak future economic outlook of the Euro Global Solar Market OutlookSource : Industry Research, Ernst & Young Report on Renewable Energy Country Attractiveness indicesInstitutional Arrangement to support bundling of Solar PowerStrong National Policy Initiatives at the Centre (JNNSM)State Government(Land, Water, Other Sanctions)Solar Power DeveloperCentral Electricity Authority(Technical Support) National Thermal Power Corporation (NTPC)NTPC Vidyut Vyapar Nigam (NVVN)Buys Bundles Sells State Electricity Boards (Buyers of bundled power)CERCDetermines Tariff1 kWh Solar 4 kWh ThermalBundled 5 kWh at INR 4.17/kWhComprehensive framework for development of solar power in IndiaCovers both solar power generation as well as manufacturingIncorporates specific fiscal / monetary incentivesObjectivesInstalled solar power generation capacity of 20 GW by 2020; 100 GW by 2030 and 200 GW by 2050To achieve grid parity by 2020To achieve parity with coal-based thermal power generation by 20304-5 GW of installed solar manufacturing capacity by 201720 mn solar lighting systems for rural areas by 2022Note : Rates for SPV and ST based on average bidding tariff. The above rates expected to be achieved on commissioning of all power plants by May 20136Jawaharlal Nehru National Solar Mission (JNNSM)Among the states, Gujarat Leading the WayTariffsPV project (Rs. /kWh)Thermal projects (Rs. /kWh)Projects commissioned before 31.12.1015 (for first 12 years)10 (for first 12 years)5 (from 13th to 25th year)3 (from 13th to 25th year)Projects commissioned after 31.12.1412 (for first 12 years)9 (for first 12 years)3 (from 13th to 25th year)3 (from 13th to 25th year)GujaratFirst state to launch an independent solar policy in 2009. Policy operative till 2014.PPAs of 969 MW signed. The projects allocated through the MOU route with pre-qualification criteriaProjects of 690 MW commissioned till 30th June, 2012. Asias largest Solar Park The Charaanka Solar park in Patan district of Gujarat inaugurated in April, 2012An energy surplus state. Does not need to allocate more projects to fulfill its RPO obligationsGujarat Energy Development Authority (GEDA) provides assistance in identification of suitable locations, facilitation in arranging Right of Way & recommending the projectHigh investor confidence More than 1000MW of projects have pre-registered for future allocationsApplications worth 1715 MW received for allocation of 150MWBanaskanthaPatanSurendra NagarAsias largest solar parkAnd other states following suitParticularsKarnatakaRajasthanMadhya PradeshTamilnaduOrissaPolicy instrument Karnataka Solar Policy, 2011-16Rajasthan Solar Energy policy, 2011-2017MP Solar Energy PolicyTN Solar Energy Policy 2012Target Capacity200 MW - DISCOMS upto 2015-16 (40 MW p.a.)50 MW - Thermal100 MW - REC mechanism50 MW SPV; 50 MW STDISCOMSPhase I (upto 2013) -200MWPhase II (2013 - 17) - 400MW10 MW : MNRE200 MW SPV announced 3000 MW by 2015, including rooftop1500 MW utility scale by 20550 MW SPV in 2012-13 announced Capacity CapSPV : Min 3 MW, Max 10 MWST : Min 5 MWSPV : Min 5 MW, Max 10 MWST : Min 5 MW, Max - 50 MWSPV : Min 5 MWNA25 MWSale of Energy under state policyReverse biddingCeiling tariff : SPV : INR 14.50 / kWhST : INR 11.35 / kWhReverse biddingCeiling Tariff : SPV : INR 10.12 / kWhReverse biddingCeiling Tariff : SPV : INR 15.35 / kWhReverse biddingCeiling Tariff : SPV : INR 15.35 / kWh

Reverse biddingLowest bidder offered entire 25 MWOperational :State PolicyJNNSM, Phase I Batch IMigration schemeRPSSGP through IREDA14 MW ---

-25 projects : 125 MW8 projects : 37.5 MW10 projects : 10 MW --------1 project : 5 MW-7 projects : 7 MWBids awarded under state policy / other schemes80MW under State Policy30 MW - 30 months of PPA;50 MW - 18 months of PPA817 MW - REC mechanism100 MW - NTPC BundledLast date for submission of RfS for 200 MW postponed indefinitely200 MW under State PolicyExpected allocation of 1000MW in 201325 MW

Source: MNRE, State Nodal Agencies, Research Reports

StateElectricity Consumption (Bn units)Equivalent Solar Installation capacity (MW) RPPO 3% (FY 22E)FY13EFY 22EAndhra Pradesh89.0175.6Chhattisgarh21.845.1Gujarat85.4156.8Haryana38.473.8Jharkhand23.451.7Karnataka53.5107.5Madhya Pradesh49.399.0Maharashtra125.7219.9Orissa27.263.1Punjab60.5104.3Rajasthan48.996.4Tamil Nadu87.2182.8Uttar Pradesh79.3150.2West Bengal41.084.5Total968.71,914.5Solar RPOs Pushing the Frontiers Further38,290 MWThe solar power purchase obligation for the States start with 0.25% in phase 1 (FY2011-2013) and go up to 3% by FY 2022Installed solar capacity by FY 2022 estimated at 38 GW

*Source: MNRE and Bridge to India: Solar Compass: Oct 2012as on Oct 2012Total Grid Connected Installed Capacity Map India

Solar Knowledge base and Technology

Grid Extension, Availability and StabilitySolar Photovoltaics (SPV)Technology PV production whole value chainEquipment PV production whole value chainGrid Connected Solar Farms EPC, Inverters, Monitoring SystemsEngineeringRisk Assessment and InsuranceSolar Resource Assessment (GHI, DNI) : Satellite Based Estimates & Ground MeasurementsFinancing What are various SPV technologies ?c-SiThin FilmsMono /Single-CrystalMulti / Poly CrystalAmorphous SiliconCdTeCIGS Organic a-Si(single Junction)Tandem /Micromorph/Double Jn/Triple Jn18-23%15-17.5%~6-8%~9-10%~11%~12%~5% ?Global Production: Technology Mix

PolysiliconIngot/WaferCellsModulesSystem IntegrationDecentralised ApplicationSandUpstreamMid StreamDown Stream

GOVT OF INDIA DOMESTIC SOLAR MFG ASPIRATIONSIndian Solar Market demand is growing to be 1GW/yr by next year; and is set to increase further thereafter, due to Grid Parity achievementTo cater to the Indian market demand following manufacturing capacities are required:Indian Solar PV ManufacturingNSM Goal : 2 GW / yr Domestic Mfg by 2020Existing / Under Constr Indian CapacitiesRemarksPolysilicon12,000 T/yr1,800 T/yr (constr)LancoIngots & Wafers2,300 MW/yr300 MW/yr (constr)Lanco, Birla SuryaCells2,200 MW/yr1,010 MW/yrIndosolar, Jupiter, BHEL, Websol, Tata, Moserbaer, EuroMultivision, BEL, CEL, SolarSemiModules2,000 MW/yr1,900 MW/yrMore than 40 companies LANCO Group, All Rights ReservedPV Technology wise status (JNSM)JNSM Phase I (Batch-1): 150 MWPhase I (Batch-2): 350 MW (Anticipated)Cheaper Financing Options decide the technology options Equipment comes with fundingc-Si Module to be manufactured domesticallyc-Si cells and Module to be manufactured domesticallyTechnology share in Gujarat & leading financiers16

Cheaper Financing Options decide the technology options Equipment comes with fundingTechnology Vision for the PV Future What technology is needed What is needed to develop that technology What challenges it would involve to get commercialized Who needs the PV technology

For what?

Where/When does one need itWho needs Solar ?

Who needs Solar ? For What?A Systems Approach Top-down Approach Grid Centric

Bottoms-up Approach Off Grid, Needs Specific Solutions

Photovoltaic SystemsPV Panels: high efficiency at low cost !Inverters: Long Life time ?, Higher efficiencies, Tropicalized, more intelligentVariability of Solar Resource- Storage solutions: Batteries, Ultracapacitors,. Power electronics Load Specific Transport of power Availability and Stability of Grid

Frugal Engineering Tata NanoLessons Learned : Lack of reliable radiation data22Solar Monitoring StationsMNRE has initiated a major project on Solar Radiation Resource Assessment (SRRA)

Centre for Wind Energy Technology (CWET) has installed a network of 51 Automatic Solar Radiation Monitoring Stations in different states

Project developers have to rely on satellite information from sources like NASA, NREL, etc

Uncertainty surrounding the generation potential at site. Different solar radiation database yield varying estimates.

The returns of a solar project are highly sensitive to radiation levels.

Lack of adequate ground-mounted monitoring stations to validate satellite based estimates

Radiation variability could significantly affect projected cash flows

Challenges Faced currentlyMove towards building Solar Radiation Atlas22Lessons Learned : Scale of Projects23Solar projects are small compared to traditional power plants

Lenders are reluctant to finance small transactions

In cases where finance is available, transaction costs are higher

Higher MW range of projects had to be promoted for using better evacuation infrastructure

Government realising these challenges has considerably increased the size of solar PV projects allotted in phase I batch II of JNNSM

From Batch I to Batch II , max capacity allotted to any developer has increased to 50 MW

States following the cue, are also encouraging large scale development which would further bring in economies of scale.ParticularsMax CapJNNSM Batch I Phase IMax 5 MW

JNNSM Batch II Phase I

Max 50 MW for one developer; each project of max 20 MWKarnataka10 MWRajasthan10 MWMPNo upper LimitGujarat25 MWOrissa Phase I & II25 MWMaximum Cap allotted to a developer for Solar PVChallenges faced due to size of ProjectsSteps taken to address the issue23SPV Challenge:

The Grid Parity ?

Or

Grid Substitute / Support

Socket Parity

25Road to Grid Parity is Blocked by the High Cost of Financing in IndiaProhibitive cost of financing in India in terms of prevailing interest ratesLong-tenure loans not available (15 years and more) with Indian banks. Stretches cash-flows during debt service period

* Includes Hedging Cost NCDs = Non-convertible DebenturesECAs= External Commercial BorrowingsECA=Export credit agency l

Mode of Solar Financing in IndiaSource: World Bank**25Roadmap to High Growth & Grid ParityRs.5 / unitEvery MW of Solar Power Plant create direct / indirect jobs:

Solar Mfg : 20 Solar Farm Project : 65O&M : 15

During 2012-17 : Potential 1,00,000 jobs

Grid Parity Reliable & affordable power - Empowerment of rural population26

THANK YOU!Chart1AP3512Chhattisgarh902Gujarat3136Haryana1476Jharkhand1034Karnataka2150MP1980Maharashtra4398Orissa1262Punjab2086Rajasthan1928TN3656UP3004WB1690

Series 1Series 2122 MW157 MW90 MW100 MW96 MW59 MW43 MW64 MW

Sheet1Series 1Series 2AP175.63512Chhattisgarh45.1902Gujarat156.83136Haryana73.81476Jharkhand51.71034Karnataka107.52150MP991980Maharashtra219.94398Orissa63.11262Punjab104.32086Rajasthan96.41928TN182.83656UP150.23004WB84.51690

Chart1311361034

Cumulative Installed Solar Capacity (MW)1035

Sheet1Cumulative Installed Solar Capacity (MW)FY 20093FY 201011FY 201136Uptil July 20121034To resize chart data range, drag lower right corner of range.

Chart10.125100.13120.11150.09200.0770.0910

Interest rateRepayment Years

Sheet1Interest rateRepayment YearsIndian Commercial banks13%10Indian Specialised IFCs13%12NCDs11%15Multi-lateral agencies9%20ECAs7%7ECBs9%10

Chart10.0770.0660.030.1020.0460.0150.0580.0490.0670.0550.090.0050.033

Interest ratePrime Lending Rates (2011) (%)10.5%

Sheet1Interest rateAustralia7.7%China7%Canada3%India10%Italy5%Japan2%Korea Rep.5.80%Malaysia4.90%Philippines6.70%Qatar5.50%South Africa9.00%UK0.50%USA3.30%