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Shining Not so Bright: Solar Energy in India

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  • February 10, 2013

    According to a recent report, India will need 3, 128 Trillion watt hour per year (TWH) of electrical energy in the future if it adopts a frugal policy for energy use. This annual need could be met through renewable energy sources alone in the form of solar power (photovoltaic [PV] and thermal), wind, and hydroelectric power. But is this change in energy mix really feasible?

    How portentous would it be if India could meet its energy needs using renewable sources? According to a recent report1, India will need 3, 128 Trillion watt hour per year (TWH) of electrical energy in the future if it adopts a frugal policy for energy use. This annual need could be met through renewable energy sources alone in the form of solar power (photovoltaic [PV] and thermal), wind, and hydroelectric power. But is this change in energy mix really feasible?

    India confronts the triple challenge of climate change, energy security and economic development. Currently, coal accounts for about 42 per cent of India's energy consumption.2 Being the largest raw material contributing to electricity generation, the domestic shortage of coal has hindered the production of electricity and, as a consequence, its imports have gone up. Also, significant coal reserves and mines have not been opened fully due to disputes over environmental concerns and land permits. Hence, in order to become self sufficient in its energy needs India needs to exploit the renewable energy sector in a big way. According to the latest report of the WorldWatch Institute, India is among the fastest growing nations, after China, Brazil and the US, in the renewable energy sector with investments rising to 62 per cent—the highest growth rate for any single country over 2010 totals.3

    After seeing success in the wind energy sector, in 2001, the Indian government initiated a nationwide programme to provide clean, off-grid and mostly solar-generated power in remote areas of the country. The solar power programme, now a part of the National Action Plan for Climate Change, started as an off-grid clean energy source to bring self sufficiency and reduce the consumption of kerosene, particularly in the rural areas. While it was initially promoted as a means to achieve energy security, it now helps in mitigating the impact of climate change. Towards this end, the Remote Village Electrification Programme (RVEP) was started in 2001 by the Ministry of Non-Conventional Energy Sources (MNES), later renamed the Ministry of New and Renewable Energy (MNRE) in 2006. The programme offered a simple kit of one or two compact fluorescent lamps CFLs, a solar panel, a battery and a solar charge regulator. Unfortunately, RVEP could cover only 9,000 villages against a target of 18,000. A number of reasons can be identified for this: first, manufacturing defects due to poor manufacturing of batteries and CFLs; second, poor after-sales issues; and third, corruption in the system of distribution, both top-down and bottom-up. Despite efforts made by various non-governmental organizations (NGOs) and private parties, the programme had a limited impact, the prime reason being the start-up cost. For example, a family earning Rs 3,000-4,000 a month would preferably opt for kerosene, which costs Rs 250 a month, rather than opting for a 10-year supply of solar power, which came at an initial cost of Rs 8,000-13,500 at a time.4 Owing to this high start-up cost and as well as the uncertainty of the quality of the panels, the family would not consider the fact that solar power would cost little more than Rs 100 a month, which is significantly less than a month’s supply of kerosene .

    Government Programmes

    In 2010, the Government launched the Jawaharlal Nehru National Solar Mission in the Eleventh Five Year Plan (FYP), which was an off-grid clean energy mission. The Mission sets the following target:

    1. Enabling policy framework for deployment of 20,000 megawatt (MW) of solar power by 2022.
    2. To increase capacity of grid connected solar power to 1,000 MW by 2013 and an additional capacity of 3,000 MW by 2017.
    3. To create favourable conditions for developing solar manufacturing capability in the country.
    4. To promote deployment of 20 million solar lights by 20255. The mission aim is to make India a global leader in solar energy.
    Target Fixed and Achievements Made
    under JNNSM

    (2010-2013, 2013-2017 and 2017-2022)
    Application Segment Target for Phase-I* 2010-13 Achievement 2010-11 Achievement 2011-12 Cumulative Target for Phase-II 2013-17 Cumulative Target for Phase-III 2017-22
    Grid Solar Power incl. Roof top and Distributed small Grid Connected Plants 1100 MW 802 MW Allotted 1152 MW Capacity allotted 4000 MW 10000 MW# 20000 MW
    Off-Grid Solar Applications 200 MW 40.6 MW Sanctioned 118.071 MW Sanctioned 1000 MW 2000 MW
    Solar Collectors 7 Million Sq. Meters 4.5 Million Sq. Meters 5.5 Million Sq. Meters 15 Million Sq. Meters 20 Million Sq. Meters

    Source: MNRE

    Ass can be seen from the above table this mission adopted a three phase approach. It started with the last year of the Eleventh FYP (2010-11) and the first year of Twelfth Plan (2012-13).

    AF- Mercado’s reports6 show, in phase I, there has been a decline in the cost of the solar PV from 15.20 Crores/Megawatt (Cr/MW) in 2010-11 to 14.42 in 2011-12 to 10.00 in 2012-13. This has resulted in reduction in bench mark tariffs from 17.91 in 2010-11 to 15.34 in 2011-12 to 10.39 in 2012-2013(Rupees/ KWH). Similarly a reduction in cost from 14.20,15.00 to 13.00(Cr/Mw) in year 2010-11,2011-12,2012-13 respectively in solar thermal leading to a reduction of tariff from 15.31 ,15.04 to 12.46 (Rupees/ KWH) in the years 2010,2011,2012 respectively.

    The second phase (2012-2017) focuses on deployment of both off-grid (concentrated solar power or CSP) and grid-connected rooftop PV systems in the country. In Batch 2, the average price of the PV system is recommended to be 8.77/KWH.7 According to some reports,8 there is not enough money to finance this phase as bundling (where, for example, one unit of expensive and clean solar power is bundled with cheap and dirtier coal to make it affordable) is not an option. This is because India does not have unassigned electricity from the National Thermal Power Corporation’s (NTPC) coal-based thermal plants. The last phase is expected to begin in 2017 and end in 2022.

    The Way Ahead

    Globally, the solar power industry has grown by 75-80 per cent.9 The total installed capacity of solar PV systems has reached approximately 40 Gigawatt in 2010, with Germany leading in capacity addition. In spite of loans given by the US EXIM bank (which was one of the largest financer of renewable projects in India) to the tune of $176 million in 2011 for seven solar transactions in the country10, the share of solar energy in grid interactive renewable power accounts to nearly zero per cent in the overall energy mix. At the same time, it is interesting to know that the total installed capacity of grid interactive renewable power had increased up to 16,817 MW in 2009-10, as compared to 14,486 MW in 2008-09, indicating a growth of 16.1 per cent during that period.11

    So the question remains: can solar energy be the next big thing? The major challenges impacting the progress of solar energy today are the land needed for installation, project development, high cost of solar PV technology, energy storage, and high initial costs. Though these have been addressed on paper, implementation remains pending.

    As can been seen from the above discussion, it is quite possible to alter the energy mix by using more of renewable energy, especially solar (both PV and thermal). India gets approximately 300-odd days of the sun per year, but the unpredictable nature of solar energy is a huge challenge. Thus many technical challenges, not just financial, will have to be resolved if renewable energy sources alone are to meet India’s energy demand.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.