Replacing Diesel with Solar

A comprehensive guide from
Energy Alternatives India
Preview of September 2013 report
Objectives
Energy Alternatives India (EAI) prepared the Replacing Diesel with Solar
report based on our extensive interact...
Why replace Diesel with Solar ?
Because not only is it clean energy, it is also much cheaper
Captive solar power costs jus...
What are the issues to be considered when
substituting Diesel with Solar?
While solar energy can replace diesel, there are...
Will solar energy generate power
during power cuts?
Not all solar PV plants generate power during power cuts –
a fact that...
Can I replace my entire diesel consumption
with solar power?
Whether your entire diesel consumption or only a part of
it c...
Are there any issues in using solar power that
I should be aware of?
Solar power is an intermittent source of power as
the...
What incentives are available for setting up
captive solar PV plants?
There are several incentives available to those
sett...
What are the costs and financial returns
that I can expect from
replacing diesel with solar?
The Replacing Diesel With Sol...
Who are the key vendors providing captive
solar PV plants in India?
Due to the complexities in designing and installing
a ...
Do I need to have my own PV plant? Can I just
buy solar power the way I
buy power from my utility?
To avoid the initial in...
How will the Replacing Diesel with Solar
report help me ?

This report answers the most critical questions that EAI has co...
Summary of Benefits
If you are looking to save on diesel by moving to captive solar
power, EAI’s Replacing Diesel with Sol...
Free Report Preview

Click the image for detailed contents
and a free preview of the
Replacing Diesel with Solar report
Why EAI?

Focus

Network

We do ONLY
Renewable Energy
and
Cleantech, nothing
else

Intersection of
domain knowledge
and ma...
Our Clients – Domestic
Reliance Industries
Limited, India

Indian Railways

Accenture, India

Sterlite Technologies
(Vedan...
Our Clients – International
Exxon Mobil,
USA

Total, France

Saudi Aramco

Shell, Nethe
rlands

Mitsubishi, Japan

Maruben...
Connect with Us

Energy Alternatives India
A5C Anugraha Apartments
41, Nungambakkam High Road
Chennai – 600034
Tamil Nadu
...
Appendix

Report Contents
by Chapter
List of Contents – Chapter 1
Captive Power in India
Key Sections
1.1
1.2
1.3
1.4
1.4.1
1.5
1.5.1
1.5.2
1.5.3
1.5.4
1.5.5
1...
List of Contents – Chapter 2
Technology Options
Key Sections
2.1
2.2
2.3
2.3.1
2.3.2
2.4
2.4.1
2.4.2
2.5

Introduction
Sta...
List of Contents – Chapter 3
Setting up Solar CPP in India
Key Sections
3.1
3.2
3.3
3.3.1
3.3.2
3.4
3.5

Steps Involved in...
List of Contents – Chapter 4
Policies, Regulations & Incentives
Key Sections
4.1
4.2
4.2.1

4.2.2
4.3

Introduction
Govern...
List of Contents – Chapter 5
Economics of Captive Power Plants
Key Sections
5.1

5.2
5.2.1
5.2.2
5.3

5.4

Introduction
• ...
List of Contents – Chapter 6
Financing of Solar CPPs
Key Sections
6.1
6.2
6.3
6.4
6.5
6.6
6.6.1
6.6.2
6.7

Introduction
Pr...
List of Contents – Chapter 7
Next Steps to be taken by a Solar PV Captive Power
Developer
Key Sections
7.1
7.2
7.3
7.3.1
7...
List of Contents – Chapter 8
Solar PV in India – Industry Status and Trends
Key Sections
8.1
8.1.1
8.2
8.2.1
8.2.2
8.2.3
8...
List of Contents – Chapter 9
Case studies of Indian Use of Captive Solar PV
Key Sections
9.1
9.2
9.3
9.4
9.5
9.6

Captive ...
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  1. 1. Replacing Diesel with Solar A comprehensive guide from Energy Alternatives India Preview of September 2013 report
  2. 2. Objectives Energy Alternatives India (EAI) prepared the Replacing Diesel with Solar report based on our extensive interaction with clients who require an objective assessment of what solar energy can do for them in their quest to reduce diesel consumption. The report has several objectives For Energy Consumers A clear conceptual overview that allows your strategy team to decide on including captive solar power in your energy mix by analysing  The business case – price movement in diesel power vs. solar  The benefits of, and challenges in, integrating solar power in your operations  Detailed financial analysis of returns from replacing diesel with solar under different scenarios  Favourable policies that incentivise your adoption of solar energy  Case studies – others’ experience in using solar energy For solution providers A study of the market for diesel-to-solar solutions, including  Current installed captive power capacity  Demand for diesel power  Attractive market segments  Economics of captive solar  PV industry status and trends
  3. 3. Why replace Diesel with Solar ? Because not only is it clean energy, it is also much cheaper Captive solar power costs just Rs. 7-8.5/kWh Power from Diesel generators costs Rs. 16/kWh • The cost goes even higher once losses from pilferage, evaporation, etc., are taken into account. • In some applications, such as rural telecom towers, diesel power can cost as much as Rs. 40/kWh! The cost of diesel fuel keeps on increasing • The price has increased 300% since 2002 and 46% since 2010 • If the price increases by 10% a year (which has been the trend), diesel would cost about Rs. 68/litre in 2015 and the cost of power from diesel would be close to Rs. 20/kWh! Bottom line: Captive solar power is much cheaper than diesel, and once the plant is installed the cost of power is fixed for the next 25 years, unlike diesel where the cost keeps increasing
  4. 4. What are the issues to be considered when substituting Diesel with Solar? While solar energy can replace diesel, there are several critical aspects of using solar power in India that need to be examined carefully when framing your solar strategy, such as      Will solar energy generate power during power cuts? Can I replace my entire diesel consumption with solar power? Are there any issues in using solar power that I should be aware of? What incentives are available for setting up captive solar PV plants? What are the costs involved and financial returns that I can expect from replacing diesel with solar?  Who are the key vendors providing captive solar PV plants in India?  Do I need to have my own PV plant? Can I just buy solar power the way I buy power from my utility? Each of these, and many other such questions, are discussed in the Replacing Diesel with Solar report
  5. 5. Will solar energy generate power during power cuts? Not all solar PV plants generate power during power cuts – a fact that comes as a surprise to many of our clients. There are three kinds of PV plants  Grid-tied  Grid-interactive  Off-grid The Replacing Diesel With Solar report discusses each type of plant with respect to how they function and the applications they are best suited to, including providing power during power cuts. We also examine the use of batteries to provide backup power when solar power isn’t available
  6. 6. Can I replace my entire diesel consumption with solar power? Whether your entire diesel consumption or only a part of it can be replaced with solar power depends on several factors, such as  The extent of rooftop space available  The nature and schedule of the load  The timing of power cuts The Replacing Diesel With Solar report examines the impact of each of these factors on substituting diesel with solar, and critically analyses integration of solar power with diesel generators where sufficient solar power cannot be generated to support the entire load. We also discuss the timing of power cuts and the financial impact of using solar power partially to offset utility power and partially offset diesel consumption.
  7. 7. Are there any issues in using solar power that I should be aware of? Solar power is an intermittent source of power as the sun isn’t always shining to the same extent on the panels. These may create issues, particularly when integrating solar power with diesel, such as  Frequency synchronisation  Reverse current flows  Efficiency losses in the DG set The Replacing Diesel With Solar report discusses these and other issues experienced when implementing a solar solution. The solutions and workarounds to these issues are also presented, as well as our recommendations for integrating solar with diesel
  8. 8. What incentives are available for setting up captive solar PV plants? There are several incentives available to those setting up captive solar PV systems, including  Accelerated depreciation  Subsidies  Renewable Energy Certificates The Replacing Diesel With Solar report discusses these in detail, including eligibility criteria and amount of subsidy for different categories of consumers and different kinds of installations. We also illustrate other policy initiatives such as group captive provisions that allow several consumers to come together and setup a common power plant
  9. 9. What are the costs and financial returns that I can expect from replacing diesel with solar? The Replacing Diesel With Solar report gives detailed breakup of cost involved in setting up a solar PV plant, such as Cost break up of a 100 kW solar captive system – without batteries Cost range Item PV modules Inverters (grid tie) Balance of System (transformers, cables and wires, tracking devices, etc.) Installation (civil & general works) Total (Rs. Lakhs) 31.5 - 33.8 7.7 - 8.3 23.8 - 25.5 6.3 - 6.8 70.0 – 75.0 The report also analyses financial parameters such as IRR and payback when replacing diesel with solar under 3 scenarios (pessimistic, likely, and optimistic) that vary the capital cost of the system, the escalation in price of diesel, and the extent of diesel substitution.
  10. 10. Who are the key vendors providing captive solar PV plants in India? Due to the complexities in designing and installing a captive solar PV plant, we recommend utilising the services of a qualified vendor who can provide you with turnkey solutions that are best suited to your needs The Replacing Diesel With Solar report provides you with a list of 35 vendors in India with details on solutions offered. We have included both  Companies that manufacture the solar power system and also provide turnkey solutions in integrating the system for the developers and  Companies/consultancies that merely provide integration services
  11. 11. Do I need to have my own PV plant? Can I just buy solar power the way I buy power from my utility? To avoid the initial investment required by solar PV plants some organisations prefer to buy only the power generated from a captive PV plant, just like they buy power from a utility. This is known as the Build Own Operate (Transfer) – BOO(T) model The Replacing Diesel With Solar report discusses the characteristics, features, and challenges in implementing a BOO(T) solution, as well as a list of 10 vendors offering this solution in India.
  12. 12. How will the Replacing Diesel with Solar report help me ? This report answers the most critical questions that EAI has come across in advising our clients                 Why should I go for solar based captive power? How much solar PV capacity do I need? How much will it cost to install a solar PV captive system? How much maintenance does a solar PV system require? What are the key things I should look out for before installing a solar PV system? What are the mistakes I should avoid? How much space will I need for the captive PV installation? Should I use solar as a backup power or as a mainstream power source? Will I be able to depend completely on solar energy for my day time operations? If I operate night shifts, will I need a storage system (battery) for my energy needs? Can I sell my excess energy to the grid? What are the components of the solar PV system? What is the lifetime of the system? Am I eligible for availing government incentives? Can I install a hybrid captive system (mix of solar and wind OR solar and diesel)? When should I consider using a generator with my solar PV system?
  13. 13. Summary of Benefits If you are looking to save on diesel by moving to captive solar power, EAI’s Replacing Diesel with Solar report is a one-stop resource for all the information you will need to assess, implement, and profit from substituting diesel with solar Within this report you will find 186 pages that discuss         Captive solar PV technology and components Constraints in replacing diesel with solar Government incentives and regulations Inputs on capital and operational costs and financial scenario analysis Case studies of businesses that already use solar for captive power Financing options Vendors, component suppliers, and system integrators List of solar PV captive power plant systems all over India
  14. 14. Free Report Preview Click the image for detailed contents and a free preview of the Replacing Diesel with Solar report
  15. 15. Why EAI? Focus Network We do ONLY Renewable Energy and Cleantech, nothing else Intersection of domain knowledge and marketing expertise Deep relationships across the Renewable Energy value chain, particularly in Solar and Wind Professionals from IIT and IIM; biotechnology, energy engineering, economics, and finance specialists Expertise Team
  16. 16. Our Clients – Domestic Reliance Industries Limited, India Indian Railways Accenture, India Sterlite Technologies (Vedanta Group) Minda Group Low Carbon Expert Committee Planning Commission Government of India Agrawal Group Bhavik India Group Bosch, India GE, India Schneider Electric, India
  17. 17. Our Clients – International Exxon Mobil, USA Total, France Saudi Aramco Shell, Nethe rlands Mitsubishi, Japan Marubeni, Japan US Army Ministry of Foreign Affairs of Denmark National Renewable Energy Laboratory, USA Boston Consulting Group, Germany A.T. Kearney, Germany Mott MacDonald Bill & Melinda Gates Foundation, USA World Bank Procter & Gamble
  18. 18. Connect with Us Energy Alternatives India A5C Anugraha Apartments 41, Nungambakkam High Road Chennai – 600034 Tamil Nadu India www.eai.in www.eai.in/club www.eai.in/360 www.eai.in/newsletter www.linkedin.com/company/energy-alternatives-india www.facebook.com/IndiaEnergy www.twitter.com/energyindia
  19. 19. Appendix Report Contents by Chapter
  20. 20. List of Contents – Chapter 1 Captive Power in India Key Sections 1.1 1.2 1.3 1.4 1.4.1 1.5 1.5.1 1.5.2 1.5.3 1.5.4 1.5.5 1.5.6 1.5.7 1.5.8 1.5.9 1.5.10 1.6 1.7 Introduction Captive Power Plants in India Diesel in India Why Solar for Captive Power The Business Case for Captive Power Plant (CPP) Using Solar PV (SPV) Attractive Market Segments Large Industrial Facilities Large Commercial Buildings/Facilities Communication Sector Water Pumping On-shore and Off-shore Oil & Gas Desalination Remote Monitoring Stations Warning Signals Lighting Refrigeration Solar Power vs. Diesel Generator Key Bottlenecks
  21. 21. List of Contents – Chapter 2 Technology Options Key Sections 2.1 2.2 2.3 2.3.1 2.3.2 2.4 2.4.1 2.4.2 2.5 Introduction Stand Alone PV Systems Grid-tied Captive Power Plant Grid-tied Systems With No Battery Backup Grid-Interactive With Battery Backup Hybrid Systems Solar Photovoltaic-Diesel Generator Hybrid System Solar Photovoltaic-Wind Hybrid System Summary of Solar PV Technology Options
  22. 22. List of Contents – Chapter 3 Setting up Solar CPP in India Key Sections 3.1 3.2 3.3 3.3.1 3.3.2 3.4 3.5 Steps Involved in Setting Up a Captive PV Power Plant Steps Involved in Setting up a Hybrid System Key Requirements to Set Up a Captive Power Plant (CPP) Essential Components Optional Components Setting up PV Captive Power Plants - Key Factors to Consider Indian Companies and Entities Involved in Setting up of a Captive Power Plant
  23. 23. List of Contents – Chapter 4 Policies, Regulations & Incentives Key Sections 4.1 4.2 4.2.1 4.2.2 4.3 Introduction Government Incentives and Policies Captive SPV and the NSM • Guidelines for Off-grid and Decentralized Solar Applications • Central Financial Assistance & Eligibility • How to Apply Commissioning of the Projects Electricity Act Frequently Asked Questions
  24. 24. List of Contents – Chapter 5 Economics of Captive Power Plants Key Sections 5.1 5.2 5.2.1 5.2.2 5.3 5.4 Introduction • Solar PV and Grid Parity • Solar PV’s Diesel Parity Capital Costs and Breakups Inputs Used in the Financial Model Performance of Solar PV System Results of the Financial Model • Pessimistic Scenario • Likely Scenario • Optimistic Scenario The BOO(T) Model
  25. 25. List of Contents – Chapter 6 Financing of Solar CPPs Key Sections 6.1 6.2 6.3 6.4 6.5 6.6 6.6.1 6.6.2 6.7 Introduction Project Finance Characteristics Asset Finance Characteristics Corporate Finance Most Likely Routes for Financing of Solar PV CPP Nodal Agencies that Support Renewable Energy Financing in India IREDA Power Finance Corporation Ltd Financial Institutions that Fund RE Projects in India
  26. 26. List of Contents – Chapter 7 Next Steps to be taken by a Solar PV Captive Power Developer Key Sections 7.1 7.2 7.3 7.3.1 7.3.2 7.4 Introduction Preparing Prefeasibility and Detailed Project Reports Meeting Government Departments List and Contact Details of State Nodal Agencies (SNA) in Various States Central Government Relevant Department Details and Contacts List of System Integrators of Solar PV Captive Power System
  27. 27. List of Contents – Chapter 8 Solar PV in India – Industry Status and Trends Key Sections 8.1 8.1.1 8.2 8.2.1 8.2.2 8.2.3 8.2.4 8.3 8.3.1 8.3.2 8.4 8.4.1 8.4.2 8.4.3 8.4.4 8.5 8.5.1 8.5.2 8.6 8.6.1 8.6.2 8.6.3 8.7 Introduction Introduction to Alternative Energy Sources Solar PV Technology Solar PV – Crystalline Solar Cells Solar PV – Thin Film Solar Cells Solar PV - Concentrating Photovoltaic Photo-electrochemical, Polymer, Nano-crystal and Hybrid cells Solar PV Market Status and Trends Market Share of Thin Film Photovoltaics Solar Photovoltaic in India – A Snapshot Solar Energy Potential in India Regional Potential for Solar Power Current Solar PV Scenario in India Future Solar PV Scenario Solar PV Future Contribution in Indian Electricity Supply Status of Solar PV Technology in India Solar Cells and Solar PV Production Foreign Trade of Solar PV Prominent Solar PV Power Projects & Companies in India Solar PV Power Projects Installed Solar PV Power Projects Approved by the Central Government under Phase I of JNNSM Scheme Solar PV State Projects Key challenges to growth of Solar PV in India
  28. 28. List of Contents – Chapter 9 Case studies of Indian Use of Captive Solar PV Key Sections 9.1 9.2 9.3 9.4 9.5 9.6 Captive Solar PV Systems – Experience of L&T, Chennai Captive Solar PV Systems – Experience of SSN Research Center, Chennai 1 MW Hybrid Energy Supply for a Cotton Mill, Tirupur, TN, India Captive Solar PV Systems – Experience of Omax Auto Ltd, Gurgaon, Haryana Captive Solar PV Systems at Daimler India, Chennai Solar PV Captive Power Installations in India

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