Jawaharlal Nehru National Solar Mission - 2010, INDIA Wockhen&Co.
India – has been undertaking a country wide solar programme for more than two decades:
Remote village electrification – amongst the largest decentralised solar programmes globally
Approximately 95% of all remote villages electrification using SPV
Promotion of solar in Urban, Industrial & Commercial applications
Cumulative Capacity Added till upto 31.12.2009
Grid Based Solar Power - 6 MW
Decentralised Solar Power Projects & Street Lights – 2.39 MWp
Solar Home Lighting Systems - 5,10,877
Solar Lanterns - 7,67,350
Solar PV Street Lighting Systems - 82,384
Solar PV Pumps - 7,247
Solar Water Heating - 3.25 Million square metres (Collector Area)
Solar Cookers – 6,72,000
At 1900 kWh/sq M, India receives one of the highest levels of solar irradiance globally.
Most parts receive i rradiance of 5-7 kWh per sq meter per day - average power generation potential of 20 MW per square kilometer
Certain sites receive higher levels of insulation (Rajasthan, TN, AP, Ladakh, Gujarat) - average potential of 35 to 40MW/sq Km
High Solar Incidence Zones Status of Solar Energy Development in India
Objective of the National Solar Mission
To achieve volume production at a scale which leads to cost reduction and rapid diffusion and deployment of solar technologies across the country
For this purpose set up enabling policy environment and regulatory framework.
Road Map for the Solar Mission
National Solar Mission’s Strategy for Phase 1 & 2
Supporting Utility scale power generation
Expanding off-grid applications
Developing rooftop installations
Accelerating Research and Development
Enhancing the Domestic manufacturing base
Jawaharlal Nehru Solar Mission Roadmap S.no Application Segment Target for Phase 1 (2010-13) Target for Phase 2 (2013-17) Target for Phase 3 (2017-22) 1 Solar Collectors 7 Million Sq meters 8 Million Sq meters 5 Million Sq meters 2 Off Grid Solar applications 200 MW 800 MW 1000 MW 3 Utility grid power, including roof top 1000 MW 4000 MW 16000 MW The Jawaharlal Nehru National Solar Mission: Key Highlights
Off Grid Solar Applications
JNNSM proposed to add 200 MW capacity in I st phase for off grid applications like solar lighting, rural power supply, telecom towers etc
Soft loans up to 5% annual interest rate
30% subsidy for select applications
90% subsidy for niche applications in special category states and other remote areas.
JNNSM to identify new technology configurations not covered under 1,100 MW capacity target
Focus on large scale Solar Thermal projects and new solar thermal technologies
PFC to prepare bidding documents for these projects - tariff based bidding - initiated in 2010
Rooftop Based Solar Generation
JNNSM – targeting 100 MW of rooftop solar PV connected by 2022 to replace conventional power/ diesel-based generators.
Operators eligible to receive the feed-in tariff fixed by the SERC.
Generation Based Incentives payable to utility to cover difference between solar tariff less the base price of Rs. 5.50/kWh with 3% p.a. escalation.
Tariff to be fixed by concerned SERC & utility to pay a minimum of Rs. 5.50/unit - increasing annually @3%
Key Action Points under JNNSM – Off-Grid, Rooftop & Demonstration Projects under JNNSM
Under JNNSM, NVVN (NTPC Vidyut Vyapar Nigam) to be the nodal agency for the procurement and sale of solar power
NVVN to source and sell 1,000 MW solar power in Phase 1 based on
A Solar Tariff (to be paid to solar power project developers) fixed by Central Electricity Regulatory Commission (CERC)
Solar tariff for FY 2010-11 tariff as per CERC - Solar PV Rs. 18.44 per unit; CSP Rs. 13.45 per unit
NVVN to bundle an equal amount of conventional power with solar power
Bundled solar and conventional solar power to be sold to states by NVVN @ Rs 5.5/ unit
NVVN to sign a PPA (Power Purchase Agreement) with solar developers and NTPC as well as a PSA (Power Sale Agreement) with state utilities
PPA to remain valid for 25 years (in line with CERC regulations)
NVVN shall establish irrevocable revolving Letter of Credit (LCs) in favor of the Solar Power Developers
Distribution Utilities shall open irrevocable revolving Letter of Credit to ensure Payment Security.
CERC discussing SERCs to set committed RPO’s at state level for solar
Solar RPO to start with 0.25% in the phase-I, and increase gradually to 3% by 2022.
Key Action Points under JNNSM - Grid Connected Solar Power
New Projects - Requirements for Setting up of Solar Projects
Confirmation that Capacity shall be commissioned on or before 31st March 2013.
Net worth of the SPD for the past three years and turn-over of last three years
New Projects – Conditions for signing of MOU
Confirmation from STU regarding availability of evacuation infrastructure at >33 kV
Statutory (allotment of land) and other clearances as applicable & Bank Guarantee
Complete Detailed Project Report (DPR) & Letter of comfort from Promoter(s) /FI’s
Time-Frame for major activities
Necessary water linkages for solar thermal from the concerned State Authorities
Proposed Time Lines & Requirements for New Projects
CERC Solar Tariff
Duration of solar feed in tariff inadequate for developers to risk such high investment
1 year solar FIT – does not allow a developer enough time to develop projects
Financial closure for solar projects – solar feed in tariff window not large enough to accommodate project gestation period – 12 months for SPV and 28 months for CSP
Capital costs assumed for solar tariff design may not be appropriate
Solar tariff based on capital cost prevailing in market today – however project gestation period may move the capital costs higher – risk especially as MNRE expects a development guarantee while awarding projects
RoE for the first 10 years assumed at 17 % (provides an effective post tax return of 14.11 %) - on the lower side considering the risks associated with new technology
No or limited information on CUF’s achievable by solar power projects
CERC CUF (of 19% - SPV) might be difficult to achieve in most parts of India except Rajasthan & Gujarat – developers of the view that this should be in the range of 16‐19%.
Same case with CSP
Key Messages & Issues
Play to India’s strength – Shift focus to Solar (India has very high solar potential)
Address energy security & high cost of solar power through rapid scale-up & technological innovation for driving down solar power costs towards grid parity.
Mid-term appraisal (based on emerging cost & technology trends) to be undertaken
to evaluate progress & review capacity and targets for subsequent phases
protect Government from un-necessarily high subsidy exposure
Shift in focus of Renewable Energy Development from State to Federal Level:
JNNSM – Shifts focus in renewable energy development to the centre
MNRE & NVVN emerge as main players in RE promotion from states like in wind etc
Limited role of states – land, water allocation
However limited or no clarity on Solar RPO’s and REC’s and how these will function
A number of issues still to be addressed by JNNSM in conjunction with Central & State Governments, Regulators, Power utilities etc:
Availability of year on year funding for the JNNSM (solar tariff – 25 years – from which budgetary head)
Solar projects - connected at 33 kV & above grid substations & not discom substations - escalate project costs - longer evacuation networks
Project financial closure within 3 months from date of signing of PPA – highly ambitious - considering the Indian banking systems unfamiliarity with solar
Key Messages & Issues
Risk Mitigation for Key Stakeholders
Risk mitigation for solar power developers & NVVN in case of default or non purchase of power by state utilities
No clarity on ‘chain of events’ or liabilities in case a utility stops buying power from NVVN or is late in making payments to NVVN for the power – domino effect
MNRE & Multi/ Bi lateral institutions (WB & ADB) for development of appropriate ‘Risk Funds’ for NVVN and solar developers
No risk mitigation instruments for solar project developers
Need for a technology guarantee from solar technology providers
Development of Solar Parks
MNRE very keen to develop solar parks in states like Rajasthan and Gujarat
Gujarat already has a very ambitious solar policy in place and had already bid out projects with a cumulative capacity of 700 MW.
Promotion of Solar Manufacturing
An incentive package, similar to SIPS, to be considered for development of manufacturing for solar thermal systems and components.
SME’s to be supported through soft loans for expansion of facilities and technology
Technology transfer to be built into procurement from foreign sources
no clarity on this clause and whether projects under JNNSM would need to source all or part of their equipment from Indian suppliers