Solar Energy – Measures & Strategic

Implementation

Presented To:
Dated: August 25, 2019
IIFT, New Delhi
Concept of Solar Energy
Advantage of Solar Energy over Conventional
Resources

Number of years remaining

Advantages 120

• Quickly Replenished
50 55
• Combats Climate Change

• Can Decrease Pollution

• Reliable Source of Power COAL OIL GAS

Why not Nuclear Energy:

• Prices stable over Time • Proliferation in
Nuclear Weapons
• Nuclear Waste &
Pollution
• Accidents & Disasters
Advantage of Solar Energy over other Renewable
Resources
 Solar & India Unmet Demand by 2020
* 1TW-h = 1000 GW-h

By 2020, off grid and rooftop segment will grow

exponentially as price parity with consumer tariffs
makes solar power an economical viable alternative
1600 - 1650 1450

250 - 350 300 - 450

Tetra watt hours (TW-h)

85 - 95

30 - 100

30 - 40

25 - 35

Grid Grid Supply Grid Supply Grid Grid Gap Latent On Potential Total
Demand (Conventional) Renewable Connected 2020 Grid Off Grid Unmet
other than Solar Demand Demand Demand
solar
THE REAL PROBLEM
Y o Y increase in Solar Energy Share

 In Y o Y analysis, Market share of solar

energy is anticipated to increase.
 However, Share of Fossil Energy is not
reducing drastically
 Share of other renewable sources is
diminishing.
Challenges
 Fossil Fuel: Primary focus of major energy companies
 High initial cost & Transmission and Distribution losses up to 40%
 Land Scarcity: Per Capita Land availability is very low in India
 Inadequate Financing : Indian Government inadequate financing
 Demand Vs. Supply: Local manufacturers of Solar PV cells and modules are focused more
on export market for profit maximization resulting in reduced supplies for local demand
 Net metering implementation: Slow implementation due to poor financial condition of
distribution companies for developing rooftop solar market
 Training & Development: Requirement of T&D of human resource to drive industry
growth and PV adoption
 Awareness: Consumer awareness about the technology, its economics and right usage.
 Complexity in Subsidy: Involvement of too many agencies like MNRE, IREDA, SNA,
electricity board and electricity regulatory commission makes the development of solar
PV projects difficult.
INDIA – AN OPPORTUNITY
 Advantage India

ROBUST DEMAND

Forecasted Demand - 15,280 TW-h by 2040

Demand By Sectors – Infrastructure, Industries & Transportation

Rising Per capita Energy Consumption - 1,149 units in 2017-18

INCREASE IN INVESTMENT

FDI – Non Conventional Energy Sector has received USD 7.48 billion investment

Forecasted Investments – USD 550 billion

Lucrative market for Foreign Companies & Government ambitious

green energy targets

*source: Central Electricity Authority, Ministry of New and Renewable Energy, Mercom India, EY, News sources, BloombergNEF
 Advantage India

COMPETITIVE ADVANTAGE

300 Days of Sunlight in an year

Lowest capital costs per megawatt for photovoltaic plants

Ranked 4th fourth in EY Renewable Energy Country Attractive

Index 2018

GOVERNMENT AIMS

225 GW of renewable energy capacity by 2022

household electrification

India added record 11,788 MW of renewable energy capacity in

2017-18

*source: Central Electricity Authority, Ministry of New and Renewable Energy, Mercom India, EY, News sources, BloombergNEF
SOLAR GROWTH STORY
Two Chapters to the Growth Story

Seed Phase Growth Phase

10

Conventional
5 Power
Solar
Power
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Energy Cost (rupees/ kilowatt hours)

SEED GROWTH
PHASE PHASE

• Independent solar power • Investors confidence will rise

producers receive government • Relative decrease in Energy Cost
support • Entities putting their own
• Subsidy driven market captive capacity
• pricing of photovoltaic modules • Rise in prices of conventional
dropping and hence the energy power
cost
• Projects awarded through
competitive bidding

*source: A.T . Kearney Analysis

COST & BENEFIT ANALYSIS
 10 years Cost Benefit Scenario
Levelized Cost
of Generation
8.5 – 9.2
0.1 Levelized Cost
1.5 of Generation

2.5 5.3 – 6.6

0.1

5.5-6.0
1.0
Levelized Cost
of Generation 20 – 25 %
0.5
1.0 3.7 – 5.0 Reduction in
Installation 0.1
0.9
0.5
the Seed
Phase
Balance of
1.2
System

Inverters 0.4 15 – 20 %
Seed Growth
Power System 0.4 Reduction in
Phase Phase
the Growth
PV Module 2.8
Phase
Annualized O&M Interest Interest Capital O&M Interest Capital O&M Interest
Capital Cost Expense on Long on Cost Expense Cost Expense
Term Working
Debits Capital

0–5 5 – 10
Years Years

*source: A.T . Kearney Analysis

STRATEGIES
 Developments at international level
 India led International Solar Alliance:
Japan, US and Australia have signed. Alliance brings together developing/developed countries to expand
energy access, accelerate solar power deployment, and stimulate economic development

 Indo- German Cooperation:

This will deepen cooperation in matters such as energy efficiency, Grid improvement and promotion of
clean energy.

 US-India Cooperation:
Energy Dialogue took off in 2005 focused, among other thing, on low carbon energy.

 International Financing:
1. The U.S. Agency for International Development (USAID) and the Asian Development Bank (ADB) MoU
to provide $848 million of funding for the development of solar parks across India.
2. The New Development Bank (NDB) a multilateral lender with a focus on the Global South of the Brazil-
Russia-India-China-South Africa (BRICS) grouping is all set to fund more than a dozen projects this year,
which will focus on renewable energy.

 India’s active involvement through Paris Agreement:

India is now required to periodically report on its targets and performance. Active involvement required
of all States and wide consultations to achieve 175 GW renewables revolution, including 100 GW from
solar, to meet the 2022 target.
Indian Govt. Schemes & Project Initiatives
 Indian Renewable Energy Development Agency (IREDA): To promote, develop and extend financial
support for renewable energy and energy efficiency

 National Clean Energy Fund : A Non lapsable fund established in 2011 to promote research &
development in clean energy

 Renewable Energy Certificates (RECs): There is ‘renewable purchase obligation policy’ in place (
under electricity act 2003), under which Distribution companies ( DISCOMS) have obligation to
purchase certain amount of renewable energy (fixed %age of their total electricity supply).

 Green Energy Corridor: Project to facilitate the flow of renewable energy into the national grid.
With an objective is of Synchronizing electricity produced from renewable sources, such as solar and
wind, with conventional power stations in the grid.

 Jawaharlal Nehru Solar Mission: Launched in 2010 under ‘National Action Plan for Climate Change’
with an aim to deploy 20000 MW of ‘Grid connected’ solar power by 2022.

 National Wind-Solar Hybrid Policy: It aims at providing a framework to promote large grid
connected wind-solar PV system for optimal and efficient utilization of transmission infrastructure
among others.
Implementation Strategies (1/2)

 Micro Grids: Promote generation of electricity by combining different sources - like coupling
diesel and renewable sources, called as Micro Grids

 Smart Electrical Grid: Old, increasing unreliable power lines, transformers and control stations
should be replaced, in transit to clean energy

 Hybrid Plants: Hybrid Wind & Solar plants where both wind and solar assessment is positive (1st
Plant at Morni Hills, Haryana)

 Net Metering : Connect a house or business entity renewable energy excess power generated
back into the public utilities grid

 Renewable Energy Source Sharing: Mandatory for utility companies to obtain a certain
percentage of their electricity from renewable source

 Emission Regulations: Regulation on power plant & reformation in Vehicles emission norms

 Housing Regulations: Mandatory installation of Solar Panels in New Homes

 Coal Tax: Coal Cess can be converted to Coal Tax

Implementation Strategies (2/2)

 Elimination of Subsidies in Fossil Fuels: Disassociation of subsides with fuels, for households

 Interest Subsidy: Interest free loans for purchase of solar energy equipment

 Green Bonds: To raise debt capital through markets and utilizing exclusively for specific “green”
purposes, by providing long-term source of debt capital for renewable infrastructure projects

 Utility Programs: Voluntary programs should be implemented with all the proceeds going
towards the purchase of renewable energy. So as when signed up, a user is actually buying the
clean energy from a neighboring solar plant