“A road map has been laid out to set up at least 50 solar parks, each capacity of 500 MW. How do you think the solar parks in India are shaping up?”
Mr.Roshan Joshi Principal; Accenture
Govt. of India has come out with audacious target to double India’s solar generation capacity, from 20 GW to 40 GW, by setting up solar projects of installed capacity of 500 MW or more. This will require focused effort from all GoI agencies and transparency along with swift response to succeed. Govt. of India has come out with audacious target to double India’s solar generation capacity, from 20 GW to 40 GW, by setting up solar projects of installed capacity of 500 MW or more. This will require focused effort from all GoI agencies and transparency along with swift response to succeed.
These projects are called Ultra Mega Solar Projects. UMPP projects were essentially intended to bring economy of scale for land, evaluation infrastructure and the balance of system. India has already experience with Ultra Mega thermal projects (UMPPs). However, we believe that concept of Solar Park is different in one fundamental aspect and that is it will enable smaller developers to participate in the opportunity. In past, what we saw in thermal UMPPs is rise of few large companies who captured the plants & resources offered. Going forward, what we foresee in case of solar parks is that this framework will make benefits of economies of scale available to even smaller developers.
This creates opportunity for nimble & small players to enter the market & create value. This will require developer to be focused on building capabilities in areas like i) digital project management ii) On demand analytics & insights based operations iii) connected ecosystem with customers, vendors & employees. It may be start of a mega trend with power supply ecosystem shifting from few large developer with capital as core competency to a multiplayer ecosystem based on digital capabilities.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official views of Accenture
Mr.Sunny George General Manager-BD Asun Solar Power Private Limited
Power plays a key part for growth in economics of a country. The power sector of India is one of the largest growing sectors in the world, due to the high power demand of electricity. As India is power deficit, there is a huge gap between the power generation and power demand. To shorten this gap, we are moving from conventional sources to non-conventional sources of energy. India’s perspectives are to improve power generation, with keeping the environmental safe for our future generation.
India’s geographical conditions are most suitable to harness solar energy in the world. We are blessed with 300 plus of sunny days. Technological changes are making the solar power, financially viable by reducing the high cost. Government is planning to set 100 GW of solar by 2020 and out of which, 20 GW is for solar parks. Solar parks or solar power generation at one location brings the costing and operational cost at its minimal. Solar parks are generally made on the waste-land or non-agricultural land. To reduce the India’s deficit gap of power, the effective way is to have more of these solar parks. Government of India has taken a big step to reduce the present deficit by planning to have 50 solar parks with 500MW capacity. The major challenge related to the solar park is the Transmission and Distribution (T&D) as they are located at remote areas and far away from the places of demand.
The present bid tariffs based on reverse auction is in the range of Rs.2.44-3.30/kWh which signifies the major improvement in cost competitiveness in the solar power.The success of this non-conventional power sector largely depends on the efforts and mindset of the Government.
Brijesh Gupta - CEO, Renewable Energy Business, Atha Group.
This is an appreciable initiative taken by Government of India. Main development model used for Solar power plants have been turnkey by developer from arranging land to connectivity and construction of the plant. Main challenges before the developer for timely completion are land acquisitions, ROW and Central/State Grid Connectivity. Moreover Grid configuration conflict in suggested schemes by central/SECI while implementation into state grids adds on to delay or stagnancy of the project.
Solar park developer provides land and connectivity so that cluster development of plants are achieved. Most of the solar parks are in JV with state government which reduces lead time for land acquisitions.
Currently 34 solar parks are completed / sanctioned in 21 states with a total capacity of 20 GW. The tariff has driven to new lows in these solar parks considering that the major risks are taken care of. However the development of a project within a Solar Park turns out to be a little costlier affair compared to non-park projects. Through the help of Government and Nodal agencies the cost could be brought down.
Investments are getting attracted for the development of solar parks and the country is likely to witness increased interest in this sector. One of the major concerns will be acquiring contagious parcel of land for larger capacities (1 MW could need around 4 to 5 acres of land). This will lead to partnerships with state agencies / PSU for park development.
The lead time for development of a solar park could be more than a year considering the transmission and substation permissions and construction. Financial support for solar parks as business entities are yet to be matured.
Enhancement in the tariffs fractionally or marginally for the solar-park projects would attract more developers. India is set to achieve its target of 25 GW of solar park capacity in the near future.
Mr. Rahul Arora, Partner at HSA Advocates
Pursuant to the aggressive policy-end measures taken by the government towards development of solar parks, substantial on-ground progress has taken place with several states having rolled out/rolling out specific incentives promoting development of solar parks by providing for measures like deemed conversion of land, single window clearances, road connectivity, exemption from payment of electricity duty, provision of power evacuation facilities and several other ancillary facilities.
However, to assess how the solar parks in India are shaping up, it is not just relevant to understand the policies brought in place, number of in-principle approvals granted/funding provided by the state/central government etc., but also to evaluate if the purpose of bringing in such policies for development of solar parks is being accomplished or not.
On this note, it must be considered that as on date, the cost(s) to be incurred by a developer for setting up a project in solar parks, like development charges, lease rentals, O&M charges etc. are relatively higher in comparison to the projects being developed outside of solar parks.
In our experience, what has also been a major challenge for investors, is the status of the facilities which solar parks boast of being made available to the developer. As an example, in several instances where bids were floated by the government for development of large capacities as a part of a solar park, development of evacuation infrastructure, road connectivity, levelization of land etc. were still not carried out by the implementing agencies. Such issues have often made it difficult for the developers to do a realistic analysis of their exposure, while bidding for such projects. Further, we note that the documents which are expected to be signed by the successful bidders with the relevant governmental authorities, such as PPAs, implementation and support agreement, land use permission agreement, coordination agreement etc. do not address such risks adequately, leaving the bidders exposed to any liability which may arise due to failure to commission the project within the agreed timelines because of any such factors beyond their control.
Mr.Umakanthan Rajinikanth, Managing Director, Vaisala
The federal government of India has approved an investment of Rs 8,100 crore for setting up at least 50 solar parks and ultra-mega solar power projects, an investment that would help double the solar power production target to 40,000 MW. The concept of Solar Park in India which begun with Charanka in Gujarat has now expanded to include large operational parks like Bhadla in Rajasthan, Kurnool Ultra Mega Solar Park in Andhra Pradesh fueling the growth in installed capacity of Solar in the country. While developers of Solar Parks take care to ensureminimum hassles for their customers who want to build solar plants in their solar parks, there has been one area where a little more care could be taken to ensure that the risk of uncertainty due to solar resource availability is reduced to a great extent. Even developers of large solar parks do not invest in a high quality solar weather station to conduct ground measurement of solar radiation data and other weather parameters. Vaisala studies estimate that even 4 months of ground measurement could reduce uncertainty due to resource availability by almost 40% and 1 year ground measurement could reduce it by 56%. Vaisala studies show that Satellite derived solar data, site adapted with ground measurement data, provides the most accurate GHI and DNI values for a given site and helps reduce uncertainty to a great extent. All developers of solar parks should install and diligently maintain one or many high-quality weather stations depending on the size of the solar park. This will go a long way in helping their clients toreduce uncertainty and get a highly accurate estimate of the energy that could be generated from their projects.