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The Prospects of Non Conventional Source Of Energy in India

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India’s estimated potential for electricity generation from renewables is 900 GW. The target set by the
Government of India for capacity addition from RE-based electricity generation is 175 GW by 2022.
This comprises 100 GW from solar (60 GW from ground-mounted and 40 GW from rooftop), 60 GW
from wind, 10 GW from biomass and 5 GW from small hydro. If this target is realized, the 327
billion units (BU) of electricity thus generated will cover 20% of total demand by 2022.

India’s estimated potential for electricity generation from renewables is 900 GW. The target set by
the Government of India for capacity addition from RE-based electricity generation is 175 GW by
2022. This comprises 100 GW from solar (60 GW from ground-mounted and 40 GW from rooftop),
60 GW from wind, 10 GW from biomass and 5 GW from small hydro. If this target is realized, the
327 billion units (BU) of electricity thus generated will cover 20% of total demand by 2022.

ELECTRICITY GENERATION

As of 31 January 2018, the installed power generation capacity

from renewables in India was 107.81GW (1,07,814 MW).
This comprised 32.85 GW (32,854 MW) of wind,
17.05 GW (17,059MW) of solar , 4.42 GW (4,425 MW) of
small hydro, 8.53 GW (8,531 MW) of bio-power and
44.96 GW (44,964 MW) of Hydro.

The capacity added during 2017-18 cumulatively for the

first three months of the current financial year
(2017-2018) grew 27 per cent to 25.39 BU as compared
to the corresponding period a year ago.
MNRE has revised and
raised the renewable
energy potential for India
to an estimated 900 GW.
Solaris seen to have the
largest potential, with a
revised estimate of 750
GW (considering use of
3%
wasteland for solar
installations) followed by wind with 102 GW (at 80-meter mast height). The
National Institute of Wind Energy (NIWE) has revised the estimate for wind power to 302 GW at
100m mast height. Potential for small hydro and bio energy is 20 GW and 25 GW respectively.
In the 2015 union budget, the Government of India set the target of achieving 175 GW by
2022. The target comprises 60 GW from wind, 100 GW from solar, 10 GW from biomass, and 5 GW
from small hydro. Out of 100 GW solar, 40 GW is estimated from rooftop solar while remaining 60
GW is from ground-mounted, grid-connected medium and large solar projects. Fig 1.2 gives the
potential for renewable energy vis-à-vis the RE target. Region-wise targets have also been detailed as
shown in Fig. 1.3. Similarly, Table 1.3. shows the annual capacity addition targets from 2014-15 to
2021-22.
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Figure 1.2: Renewable Energy Potential vs 2022 Target (GW)

Source: WISE, 2017 (compiled from MNRE Annual Report 2017)

Figure 1.3: Region-wise Targets to Achieve 175 GW by 2022

Source: WISE, 2017 (compiled from MNRE data)

Table 1.3: Year-wise and Technology-wise Capacity Addition Targets to 2022

(Grid-connected RE only)

Rooftop Ground-Mounted Small

Year Solar Solar Solar Wind Hydro Biomass Total
(GW) (GW) (GW) (GW) (GW) (GW) (GW)

Cumulative
installed
capacity
by 2014-15 3 24 4.1 4.4 35.5

2015-16 0.2 1.8 2 3.2 0.14 0 5.3

2016-17 4.8 7.2 12 3.6 0.14 0.9 16.7

2017-18 5 10 15 4.1 0.14 0.9 20.2

2018-19 6 10 16 4.7 0.14 0.9 21.8

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2019-20 7 10 17 5.4 0.14 0.9 23.5

2020-21 8 9.5 17.5 6.1 0.14 0.9 24.7

2021-22 9 8.5 17.5 8.9 0.14 0.9 27.5

Total 40 60 100 60 5.08 9.98 175

Source: Report on 175 GW RE by 2022, NITI Aayog, 2015

If the target of 175 GW by 2022 is achieved, it would contribute to achieving 19.44% of the total RE potential of 900 GW and
about 20.3% of electricity in the total demand. This would mean generation of around 327 BU of electricity (162 BU from solar,
112 BU from wind, 38 BU from biomass, 15 BU from SHP).[3]
Southern, western, and northern regions of India are expected to install more than 91% of the total target while remaining is
expected to be contributed by north-eastern and eastern regions. Maharashtra has the highest target of 22 GW followed by Tamil
Nadu with 21.5 GW (Fig 1.3).

Renewable energy installed capacity in India (as of 30 January, 2018)

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Solar States in India

 Gujarat and Rajasthan have been pioneers in India’s solar power sector as they were
among the first states to host utility-scale solar power projects. Solar power plants in
these two states predate even the National Solar Mission which now targets having
100 gigawatts of solar power capacity by March 2022.

 Despite being the first to set up utility-scale solar power projects, neither Gujarat nor
Rajasthan is the leader in terms of installed capacity. Southern states — Tamil Nadu,
Telangana, and Andhra Pradesh — aggressively implemented their ambitious solar
power policies. Tamil Nadu now leads all Indian states in terms of operational solar
power capacity.

 Apart from the availability of surplus land and ample solar radiation resources,
another possible factor that led to the domination of south Indian states in solar power
sector is the lack of adequate fuel to power gas-based power plants in the region.
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State-wise, Tamil Nadu topped the list with 10.6 GW (10,625 MW) RE installed
capacity, followed by Maharashtra with 7.6 GW (7,647.60 MW) and Karnataka 7.4 GW
(7,457.97 MW). List of state-wise/UT-wise installed capacity is provided in Table 1.5.
Table.1.5: State & U.T. Wise Targets and Installed Capacity
(As of 31 March 2017)
Installed Capacity by March 2017 (MW)
RE Target 2022
State Sector Private Sector Total
1 Delhi 2,762 - 56.27 56.3

2 Haryana 4,376 59.30 192.00 251.3

3 Himachal Pradesh 2,276 256.61 575.93 832.5

4 Jammu & Kashmir 1,305 108.03 51.36 159.4

5 Punjab 5,066 127.80 1,025.30 1,153.1

6 Rajasthan 14,362 23.85 6,213.95 6,237.8

7 Uttar Pradesh 14,221 25.10 2,274.73 2,299.8

8 Uttarakhand 1,797 62.87 452.94 515.8

9 Chandigarh 153 - 17.32 17.3

Northern Region Total 46,318 663.56 10,859.80 11,523.4

10 Goa 358 0.05 0.71 0.8

11 Gujarat 17,133 8.00 6,663.89 6,671.9

12 Chhattisgarh 1,808 11.05 421.81 432.9

13 Madhya Pradesh 12,018 83.96 3,453.93 3,537.9

14 Maharashtra 22,045 208.13 7,439.47 7,647.6

15 D&N Haveli 449 - 2.97 3.0

16 Daman & Diu 199 - 10.46 10.5

Western Region Total 54,010 311.19 17,993.24 18,304.4

17 Andhra Pradesh 18,477 89.50 6,074.92 6,164.4
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18 Telangana 2,000 - 1,545.88 1,545.9

19 Karnataka 14,817 155.33 7,302.64 7,458.0

20 Kerala 1,970 145.02 193.70 338.7

21 Tamil Nadu 21,508 122.70 10,502.30 10,625.0

22 Puducherry 246 - 0.08 0.1

Southern Region Total 59,018 512.55 25,619.52 26,132.1

23 Bihar 2,762 70.70 221.52 292.2

24 Jharkhand 2,005 4.05 23.27 27.3

25 Odisha 2,377 6.30 188.15 194.5

26 West Bengal 5,386 91.95 332.69 424.6

27 Sikkim 86 52.11 - 52.1

Eastern Region Total 12,616 225.11 765.63 991.7

28 Assam 688 30.01 15.88 45.9

29 Manipur 105 5.45 0.03 5.5

30 Meghalaya 211 31.03 0.01 31.0

31 Nagaland 76 30.67 0.50 31.2

32 Tripura 105 16.01 5.09 21.1

33 Arunachal 539 104.61 0.27 104.9

34 Mizoram 97 41.47 0.10 41.6

North Eastern Region Total 1,821 259.25 21.88 281.1

35 Andaman & Nicobar 27 5.25 6.56 11.8

36 Lakshadweep 4 - 0.7 0.7

Islands Total 31.0 5.25 6.73 12.5

37 Others 720

All India Total 174,534.0 1,976.91 55,267.33 57,244.24

Source: CEA, Installed Capacity, March 2017

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Key Points -:

 The growth in solar power installed capacity is expected to surpass the installed capacity of wind
power, reaching 100 GW by 2022 from its current levels of 17.05 GW as of January 2018.
 Three new solar parks was approved in 2017-18 with a total capacity of 1,523 MW.
 Rapidly falling costs has made Solar PV the largest market for new investment.
 Further, the scaling up of the target of National Solar Mission to 100 GW from 20 GW of grid
connected solar power by 2022, creates a positive environment for investors those who are keen
to tap into India’s renewable energy potential.
 In November 2017, Government of India signed a US$ 100 million agreement with the World
Bank for ‘Shared Infrastructure for Solar Parks Project’.
 Due to its favourable location in the solar belt (400 S to 400 N), India is one of the best recipients
of solar energy with relatively abundant availability.
 India has a vast potential for solar power generation with about 58 per cent of the total land area
(1.89 million km2 ) receiving above 5 kWh/m2/day annual average global insolation
 This coupled with its highest global warming mitigation potential makes it a viable alternative for
power generation among the available clean energy sources.
 Under Union Budget 2018-19, zero import duty on components used in making solar panel was
announced to give a boost to domestic solar panel manufacturers.

1.) How much land is required to set up a 1MW solar power generation unit?
= 4.5 acres for crystalline technology and around 6.5-7.5 acres for Thin-Film technology.
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2.)What permissions/clearances are required to setup a solar PV plant?

Industry clearance
 Land conversion (agricultural to Non – agricultural )
 Environmental Clearance Certificate from APPCB
 Contract labor license from state labor department
 Fire safety certificate from state Fire department
 Latest tax receipt from the municipal/Gram Panchayat for the factory land.
 Auditor compliance certificate regarding fossil fuel utilization.
 Approval from chief Electrical Inspector
 Clearance from forest Department

3.) Can solar power developers avail loan from loans for solar power plant setup? What is the
loan % and what criteria does a bank/lending institution look for?
= There are 2 kinds of Financing mechanisms that are usually discussed- Recourse financing and
Non-Recourse Financing.
Recourse financing requires collaterals and other extensive guarantees from the solar developer who
wishes to avail loan.
Non-Recourse Financing does not require any additional collaterals as the asset or power plant itself
is the collateral in this case.

4.) What is the life time of a typical Solar power plant?

= The useful life of a typical solar plant is considered to be 25 years. This is the duration for which
PPAs* are signed and financial models are built. However, solar plants can run beyond 25 years
while producing a lower output. Even many solar panel manufacturer guarantee an output of 90% at
the end of 10 years and 80% at the end of 25 years.
5.) What can be the annual energy generated from a 1 MW solar power plant?
= The annual energy can be approx. 1.5 Million units depending upon external and internal factors.

Solar Power Plant ( 2017-18)

 Capacity of Power plant = 1 MW

 Generation Per year = 17.50 lakhs
 Degradation 1st to 10 years = 0.05% approx
 Degradation 11 to 25 years = 0.67% approx
 Debt- Equity Ratio = 70:30
 Cost of Project Per MW = 450 Lacs
 O&M cost per MW = 8 Lacs/year
 Depreciation = 5.28%
 Corporate Tax = 30.28%
 Sale Of Electricity = Rs 6.49
 PAT ( 10 years) = Rs 3,07,70,000

Solar Power Plant Cost

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Criteria for determining the best solar states

Three vital factors are considered in basing this evaluation -:
 Solar Irradiation Irradiance, which is a measure of solar energy falling on the earth’s surface
per unit area over a period, is a decisive factor in the selection. It is measured in kWh/day. Some
states have higher radiation compared to others. For example, Rajasthan, Gujarat and Madhya
Pradesh have a higher irradiation level, with some parts receiving even up to 6.5 kWh/day.
 Policies/ Regulations For the next few years at least, policies will be the most important driver of
investments into the solar sector. States with more friendly and transparent policies will take the
lion’s share of solar power investments. Although most states have or are in the process of
framing a solar policy, some states have solar-specific schemes and incentives which attract the
common public to go solar. For example, Karnataka recently introduced the Land Owning
Farmer’s Scheme for which the tariff rate is Rs 8.4/kWh and is considered very lucrative. Many
states are currently easing regulations for setting up solar plants.
 Power Evacuation Infrastructure Sometimes, due to ineffective system operation and grid
management, there are significant losses during transmission and this problem is amplified in
certain states resulting in the poor health of discoms.

Now let us look at top 5 states for solar energy investments, based on the above parameters among
others.
1.Karnataka
Karnataka has gained a lot of attention recently, mainly due to some of the attractive solar schemes
the government has come up with. As mentioned before, the Karnataka Land Owning Farmer’s
Scheme offers developers an opportunity to sell power at Rs 8.4/unit. There is also a rooftop scheme
under BESCOM in Karnataka where solar power can be sold at a lucrative rate of Rs 9.56/unit on a
net-metering basis. On top of all this, things are getting in action for a 2000 MW solar park at
Pavagada Taluk in Tumkur District. In fact, NTPC has already invited bids for construction of 750
MW in late Jan followed by a bid for 250 MW in early Feb.

2.Madhya Pradesh
Madhya Pradesh, being the 2nd largest state and having large tracts of unused, undeveloped land, has
seen growing interest in the solar sector. The Welspun Solar MP Project of 151 MW is one of the
largest solar projects in the country. Recently, they even inked an agreement with IFC to build a 750
MW solar plant in Rewa. While MP has not exactly been hitting the headlines as much as states such
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as Karnataka or AP, it has been making steady progress, and investors are more comfortable with the
overall transparency of this state government, much more than they have been with state
governments such as TN.

3.Andhra Pradesh
Under the JNNSM, NTPC has successfully allocated hundreds of megawatts of projects in several
large solar parks. SunEdison was allocated 500 MW under a historic low tariff of Rs 4.63/unit. This
was followed by SB Energy (a JV between SoftBank, Foxconn and Bharthi Enterprises), surprisingly
securing a tender for 350 MW for the same Rs 4.63/unit. Since the new government (TDP) took over
about 2 years back, things have been happening faster in this state. Most of the happenings so far
have been through NTPC tenders for large scale power plants (and this is the state in which we heard
about the hair raising Rs 4.63/kWh not once, but twice)

4.Gujarat
Without doubt, as in many other areas, Gujarat is a pioneer for solar energy in India. Their solar
model is what other states look up to. Gujarat is to India what Germany is to the world. Not only does
Gujarat have the first and largest solar park in India, the Charanka Solar Park, but they have also set
examples with innovative endeavors like solar canal projects. With regard to installed capacity, they
are slightly behind Rajasthan with close to 1 GW of installations. Gujarat were the pioneers in solar,
having a head start in 2011. But since then, they have lagged. They have a recent (2015) ambitious
solar policy, but little really is happening on the ground. Being a power surplus state does not help
much either in this context.

5. Rajasthan
Being the largest state in the country, there is a huge availability of unused land with the added appeal
of irradiation levels. This was a key factor in the state receiving the maximum share of the JNNSM
Phase-1 allocations with 873 MW out of 1100 MW. And under the second phase of JNNSM, 355
MW was allotted to Rajasthan out of 750 MW. In 2015, it was the first state to cross 1 GW solar
capacity surpassing Gujarat as the new leader in solar power with approximately 1.2 GW capacity.
One of their highlights is the Bhadla solar park at Jodhpur being developed by Rajasthan Renewable
Energy Corporation Limited (RREC). Big players like Adani Enterprises, Essel Infra Projects Ltd,
Azure Power and Reliance Power have already committed to commissioning solar parks in the state.
Rajasthan has many things going for it, but it gets the fifth place in the ranking owing to the policy
uncertainty. I have not seen effective, consistence and transparent policies in the state. Sure, central
government (NTpC and SECI) allotments have happened and will continue to happen, but most of
these allotments do not benefit the small-scale business investors. The state government keeps
making announcements that are big and bold, but so far I have not seen much of these state
government announcements actually convert into action on the field.
A state with good solar potential, but needs a better policy and implementation ecosystem.
Although, currently the above states seem to be attractive in general for solar in India, there are states
like Punjab, Telangana and Maharashtra which are not far behind. In fact, these dynamics will keep
changing over the next couple of years and will depend mostly on solar policies implemented by state
governments.
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The Cost Of Renewable Energy In India

In some important ways, India has a cost advantage in renewable energy. Labor and construction
costs, for instance, are significantly lower in India than in countries like the U.S. or Germany.
Furthermore, India is blessed with renewable resources like wind and sun that are comparable to
good locations in other countries. Yet, despite these advantages, the cost of renewable energy can be
as high in India as in the U.S. or even significantly higher. The difference is often due to financing
costs.
In comparison to conventional power generation sources such as coal or gas, renewable energy is
characterized by a relatively high initial investment, followed by low variable costs. Since a much
greater share of the cost of energy is determined by the initial investment, higher financing costs have
a disproportionate impact on renewable energy. This puts renewable energy at a relative disadvantage
in India.
Figure 2-5 compares two typical large-scale installations in the U.S. against similar projects in India
to quantify the sources of differences in the levelized cost of electricity (LCOE), defined as the
average cost of electricity over the life of a project factoring in the return required on investments.

In the case of solar, capital costs in India were 25% lower than those in the U.S. However, most of
this cost advantage was eliminated by the lower expected output per MW, which was likely the result
of lower insolation and higher levels of dust in Rajasthan, where the Indian plant was built, or,
possibly the use of less expensive, but less reliable, equipment. With these two factors offsetting each
other, the Indian solar PV facility was nevertheless 26% more expensive due entirely to the higher
return requirements for investors in India, that is, the more expensive cost of financing the project.

The two wind projects depict a similar story, although the wind project in India is still cheaper,
despite the higher financing costs. While these projects do not rep-resent all U.S. or Indian renewable
projects, and rapid changes to cost and performance lead to constantly changing figures, the
comparison itself is indicative of the substantial impact of financing costs on renewable energy in
India.
The key takeaway is that the renewable projects could be much less expensive if not for the higher
financing costs.
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There are basically 3 types of Solar Power Plant :

1.) Off-grid Solar Power Plants
2.) On-grid Solar Power Plants
3.) Hybrid Solar Power Plants

Solar Power Technologies are -:

1.) Photovoltaic cells
a.) Crystalline Silicon PV cells
b.) Thinfilm Silicon
2.) Concentrating Solar Power
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Major Initiatives taken by Ministry Solar Power

 Under National Solar Mission, the target for setting up solar capacity increased from
20 GW to 100 GW by 202122. Target of 10,000 MW, set for 201718 which will take the cumulative
capacity over 20GW till 31st March 2018.
 As on date,23656 MW has been tendered out, of which LOI issued for 19340
MW.
 Capacity of the scheme for “Development of Solar Parks and Ultra Mega Solar
Power Projects” has been enhanced from 20,000 MW to 40, 000 MW.35 solar parks of
aggregate capacity 20,514 MW have been approved in 21 States.
 Kurnool Solar Park in Andhra Pradesh with 1000 MW capacity has already been
commissioned and is operational. With commissioning of1000 MW capacity at single
location, Kurnool Solar Park has emerged as the World’s Largest Solar Park.
 650 MWcapacity commissioned in Bhadla PhaseII Solar Park in Rajasthan.
 250 MWcapacity commissioned in Phase –I of Neemuch Mandsaur Solar Park
(500 MW) in Madhya Pradesh.
 3 new solar parks have been approvedin this year at Rajasthan (1000 MW), Gujarat (500 MW) and
Mizoram (23 MW) after issue of Guidelines for Enhancement of capacity from 20, 000 MW to 40, 000
MW under Solar Park Scheme.

Solar tariff has declined to lowest level of Rs 2.44 /kWh. The chronology of down ward trend in Solar tariff during
recent times is as given below:

Lowest
S. No Period Capacity Scheme State
Tariff (Rs./KWh)

1 February2017 750 MW 3.30 State Scheme Madhya Pradesh (REWA Solar park)

Rajasthan
2 May2017 250 MW 2.62 VGF Scheme
(Bhadla IV Solar park)
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Rajasthan
3 May2017 500 MW 2.44 VGF Scheme
(Bhadla III Solar park)

Gujarat (NonSolar
4 Aug17 500 MW 2.65 State Scheme
Park)

 As on 30.11.2017 over41.80 lakh Solar Lighting Systems, 1.42 lakh Solar Pumps, and power packs of
181.52 MWeq have been installed in the country. Major achievements of 18.47 lakh Solar Lighting Systems,
1.31 lakh. Solar Pumps, Power Packs of 96.39 MWeq have been reported during last three and half years.

 Several schemes namely (i) Defence scheme (ii) Central Public Sector Undertakings (CPSUs) scheme (iii)
Bundling scheme (iv) Canal Bank/ Canal Top scheme (v) VGF Scheme (vi) Solar Park scheme (vii) Solar
rooftops, have been initiated/launched by the Ministry under National Solar Mission which are under
implementation.

 Under Defence scheme against a target of 300 MW, 357.50 MW has been sanctioned; under Central Public
Sector Undertakings (CPSUs) scheme against a target of 1000 MW, entire capacity sanctioned; under 3000 MW
Bundling scheme, TranchI: 3000 MW has been tendered; under 100 MW Canal Bank/ Canal Top scheme, all
capacity sanctioned; under 2000 MW & 5000 MW VGF Scheme; and under 20,000 MW Solar Park
scheme, 35 Solar parks have been approved in 21 States with aggregate capacity of 20,514 MW.

Solar Rooftop

Ministry is implementing Grid Connected Rooftop and Small Solar Power Plants Programme which provides for
installation of 2100 MW capacity through CFA/ incentive in the residential, social, Government/PSU and
Institutional sectors.

Under the programme, central financial assistance upto 30% of bench mark is being provided for such projects in
Residential, Institutional and Social sectors in General Category States and upto 70% of the benchmark cost in
Special Category States. For Government sector, achievement linked incentives are being provided. Subsidy/CFA
is not applicable for commercial and industrial establishments in private sector.

 So far sanctions for 1767 MWp capacity solar rooftop projects has been issued and around 863.92 MWp
capacity has been installed.
 All the 36 State / UT ERCs have now notified net/gross metering regulations and/or tariff orders for rooftop
solar projects
 Concessional loans of around 1375 million US dollarsfrom World Bank (WB), Asian Development Bank (ADB)
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and New Development Bank (NDB) have been made available to State Bank of India (SBI), Punjab National Bank (PNB)
and Canara Bank for solar rooftop projects.
 Suryamitra programmehas been launched for creation of a qualified technical workforce and over11 thousand persons
have been trained under the programme.
 An online platform for expediting project, approval, report submission, and monitoring of RTS projects has
been created.
 Initiated geotagging of RTS projects, in coordination with ISRO, for traceability and transparency.
 Launched mobile app ARUN (Atal Rooftop Solar User Navigator) for ease of access of beneficiaries for request
submission and awareness.
 MNRE has allocated Ministry wise expert PSUs for implementation of RTS projects in various
Ministries/Departments.
 Published best practices guide and compendium of policies, regulations, technical standards and financing
norms for solar power projects.
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