SPV Power Technology in India

1. SPV Power Technology in India Satyendra Kumar Lanco Solar, India satyen.kumar@lancogroup.com ASEAN-India Workshop on Cooperation in New and Renewable Energy 05-06 Nov., 2012 VigyanBhawan, New Delhi

2. Agenda Power Sector in India – Role Solar Can Play India’s Current Solar PV Installation Base SPV Technologies Lessons Learned Conclusions

3. India – Electricity Opportunity Source: World Bank, CEA Source: EIA, CEA Source: D&B Industrial Research Service India per capita Electricity Consumption is lagging well behind World Average and this would catch up fast owing to rising levels of Disposable Income An average of 16 GW of power generation capacity installations required each year till 2020 to meet fast growing demand for electricity power

4. India has huge potential for solar power deployment Solar Power Density in India Source: * MNRE - Development of Conceptual Framework for REC Mechanism Solar installed capacity – India • India receives on an average 4-7kWh/m2 of solar energy daily with an average of 250-300 sunny days in a year • Rajasthan and Gujarat receive maximum radiation in the range of 6–6.6 KWh per square meter • Cumulative grid connected Installed solar power capacity is quite low in India • Accounting for a negligible proportion of India’s power capacity • Capacity additions in Indian solar industry have been miniscule as compared to the additions globally • India yet to optimally utilize its solar potential Source: MNRE, Edelweiss Research (As at June30, 2012

5. India Poised to be a Major Global Contributor Global Solar Market Outlook • India, 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 future • India : • Rapid growth seen in high potential solar states of Rajasthan and Gujarat. Gujarat launches Asia's largest solar park of 600 MW • China : • Many large-scale plants commissioned. Hit by oversupply in the international export market • Italy, Spain, Germany : • Affected by the sovereign debt crisis and a weak future economic outlook of the Euro Source : Industry Research, Ernst & Young Report on Renewable Energy Country Attractiveness indices E&Y Solar energy attractiveness Index : India ranked 2nd in the world – only behind USA

6. Strong National Policy Initiatives at the Centre (JNNSM) Jawaharlal Nehru National Solar Mission (JNNSM) • Comprehensive framework for development of solar power in India • Covers both solar power generation as well as manufacturing • Incorporates specific fiscal / monetary incentives • Objectives • Installed solar power generation capacity of 20 GW by 2020; 100 GW by 2030 and 200 GW by 2050 • To achieve grid parity by 2020 • To achieve parity with coal-based thermal power generation by 2030 • 4-5 GW of installed solar manufacturing capacity by 2017 • 20 mn solar lighting systems for rural areas by 2022 Institutional Arrangement to support bundling of Solar Power Central Electricity Authority (Technical Support) State Government (Land, Water, Other Sanctions) CERC Determines Tariff Solar Power Developer 1 kWh Solar NTPC Vidyut Vyapar Nigam (NVVN) Buys → Bundles → Sells State Electricity Boards (Buyers of bundled power) 4 kWh Thermal National Thermal Power Corporation (NTPC) Bundled 5 kWh at INR 4.17/kWh Note : 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 2013 6

7. Among the states, Gujarat – Leading the Way • Gujarat • First 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 criteria • Projects of 690 MW commissioned till 30thJune, 2012. • Asia’s largest Solar Park – The Charaanka Solar park in Patan district of Gujarat inaugurated in April, 2012 • An energy surplus state. Does not need to allocate more projects to fulfill its RPO obligations • Gujarat Energy Development Authority (GEDA) provides assistance in identification of suitable locations, facilitation in arranging Right of Way & recommending the project • High investor confidence – • More than 1000MW of projects have pre-registered for future allocations • Applications worth 1715 MW received for allocation of 150MW Banaskantha Asia’s largest solar park Patan Surendra Nagar

8. …And other states following suit Source: MNRE, State Nodal Agencies, Research Reports

9. Solar RPOs Pushing the Frontiers Further • The solar power purchase obligation for the States start with 0.25% in phase 1 (FY2011-2013) and go up to 3% by FY 2022 • Installed solar capacity by FY 2022 estimated at 38 GW 38,290 MW

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

11. Solar – Knowledge base and Technology Solar Resource Assessment (GHI, DNI) : Satellite Based Estimates & Ground Measurements Risk Assessment and Insurance Financing Grid Extension, Availability and Stability

12. What are various SPV technologies ?

13. Global Production: Technology Mix

14. GOVT OF INDIA – DOMESTIC SOLAR MFG ASPIRATIONS Upstream Mid Stream Down Stream Polysilicon Ingot/ Wafer Cells Modules System Integration Decentralised Application Sand • Indian Solar Market demand is growing to be 1GW/yr by next year; and is set to increase further thereafter, due to Grid Parity achievement • To cater to the Indian market demand following manufacturing capacities are required:

15. PV Technology wise status (JNSM) c-Si cells and Module to be manufactured domestically c-Si Module to be manufactured domestically JNSM –Phase I (Batch-1): 150 MW Phase I (Batch-2): 350 MW (Anticipated) Cheaper Financing Options decide the technology options – Equipment comes with funding

16. Technology share in Gujarat & leading financiers Cheaper Financing Options decide the technology options – Equipment comes with funding

17. Technology 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 it

18. Who needs Solar ?

19. Who needs Solar ? For What?

20. A Systems Approach Top-down Approach – Grid Centric Bottoms-up Approach – Off Grid, Needs Specific Solutions

21. Photovoltaic Systems • PV Panels: high efficiency at low cost ! • Inverters: Long Life time ?, Higher efficiencies, Tropicalized, more intelligent • Variability of Solar Resource - Storage solutions: Batteries, Ultracapacitors,…. • Power electronics – Load Specific • Transport of power – Availability and Stability of Grid Frugal Engineering – Tata Nano

22. Lessons Learned : Lack of reliable radiation data Challenges Faced currently Move towards building Solar Radiation Atlas • 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 • MNRE has initiated a major project on Solar Radiation Resource Assessment (SRRA) • Centre for Wind Energy Technology (C‐WET) has installed a network of 51 Automatic Solar Radiation Monitoring Stations in different states Solar Monitoring Stations 22

23. Lessons Learned : Scale of Projects Challenges faced due to size of Projects Steps taken to address the issue • 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. • Solar 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 Maximum Cap allotted to a developer for Solar PV 23

24. SPV Challenge: The Grid Parity ?Or Grid Substitute / SupportSocket Parity

25. Road to Grid Parity is Blocked by the High Cost of Financing in India Source: World Bank Mode of Solar Financing in India * • Prohibitive cost of financing in India in terms of prevailing interest rates • Long-tenure loans not available (15 years and more) with Indian banks. Stretches cash-flows during debt service period * • * Includes Hedging Cost • NCDs = Non-convertible Debentures • ECAs= External Commercial Borrowings • ECA=Export credit agency • l 25

26. Roadmap to High Growth & Grid Parity Every MW of Solar Power Plant create direct / indirect jobs: Solar Mfg : 20 Solar Farm Project : 65 O&M : 15 During 2012-17 : Potential 1,00,000 jobs Grid Parity – Reliable & affordable power - Empowerment of rural population Rs.5 / unit

27. THANK YOU!