The document discusses the commercial viability of solar thermal power generation systems in India under new market and regulatory developments. It provides background on solar energy potential in India, reviews global and domestic experience with solar thermal power projects, and analyzes key Indian project proposals. Technical issues around cost projections, economic challenges related to capital costs and incentives are also examined. The document recommends a holistic approach considering reliability, storage and accurate cost assessments to set viable tariffs for utility-scale solar thermal power in India.

1. Commercial Viability Analysis for Solar thermal Power Generation Systems under New Market and Regulatory developments in India Final Semester Major Project Report Presented by – Anudeep Yadav Roll No 10

2. Content Solar Energy - A Promising Energy Source for India. Solar Thermal Power Generation-Global Achievements So Far. Solar Thermal Power Generation-India’s Experience. Jawaharlal Nehru National Solar Mission-Renewed focus. Concentrated Solar Power –Commercial Tech. Concentrated Solar Power -Indian Market & Regulatory Proposals. Concentrated Solar Power-Key Indian Project Proposals Technical Issues Economic Issues Recommendations Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI

3. Solar Energy - A Promising Energy Source for India Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI Annual global radiation varies from 1600 to 2200 kWh/m2 The direct normal insolation (DNI) over Rajasthan varies from 1800 kWh/m2 to 2600 kWh/m2 . 5 trillion kWh/year theoretical potential Sunny areas Most of the country receives more than 4kWh/m 2 /day Average of 300 sunny days in the most part of the country Theoretically If one percent of the land is used to harness solar energy for electricity generation at an overall efficiency of 10%; 492 x 10 6 MU/year electricity can be generated . * TERI Calculations

4. Solar Thermal Power Generation-Global Achievements So Far Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI *Courtesy DLR- IEA 2009 Report Total Installed Capacity ~ 600 MW Troughs- Most mature Tech. Towers Next in line Dish - Yet to be Demonstrated. USA and Spain are the key Markets to look forward to. *

5. Solar Thermal Power Generation-India’s Experience Indigenous Attempt By MNES ,parabolic trough collector technology (line focusing) at Gwalpahari, Gurgaon. 50kW capacity Commissioned in 1989 and operated till 1990 ;Shut down due to lack of spares Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI Integrated Solar Combined Cycle Power Plant ,140MW (Mathania) Raj. 35MW Solar Began the GEF work program in 1996. * GEF contribution of US$49 million; a total financing volume of US$245 million (GoI and KfW, and executed by KfW) Prequalification in 2001; 1 international, BHEL and L &T ( both with SOLEL). Only BHEL , L&T remained finally. Techno economic difficulty, none submitted. STATUS (as reported by Magazine “Project Monitor” on 3 r d April 2006) International Funds are transferred to some other project. Project needs revised techno-economic feasibility study. RRECL has not been able to sign Gas Supply Agreement with GAIL. *www.Solarpaces.org Shelved and now Reopened Again

6. Jawaharlal Nehru National Solar Mission-Renewed focus on solar 3-phase approach Up to 2012-13 as Phase 1. installed Cap - 1100 MW From 2013-17 as Phase 2. installed Cap - 4000 MW From 2017-22 as Phase 3. installed Cap -20000 MW Demonstration projects in Phase I 50-100 MW Solar thermal plant with 4-6 hours’ storage (plant load factor up to 40%). A 100-MW capacity parabolic trough technology based solar thermal plant. A 100-150 MW Solar hybrid plant with coal, gas or bio-mass to address variability and space-constraints. Promotion proposals. Local demand creation, right incentives & large government pilot/demonstration programs. Financing & Incentives , import duty, low rate loans, priority sector lending etc Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI

7. Concentrated Solar Power Commercial Tech CSP Trough Most mature commercial technology Latest Functional Plant Andasol (Spain) 3 x 49.9 Mwe Solar to Electrical Eff 16 % 7.5 full load hours Storage. Annual CUF – 40 % Investment ~ 750 million Euro ; 80 % debt financed Approx 32 crores/MW; Tariff ~Rs 17.5/unit 512000 m2 / 200 Ha of collectors /plant. 50 member permanent Staff. Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI *Solar Millennium LLC & Flagsol *

8. Concentrated Solar Power Commercial Tech- Contd Solar Tower –second most mature commercial Tech. Latest Functional Plants – PS 10, PS20 ( Spain) 11 MW Sat Steam Rx, 1 hour Storage, backup NG ( 15%) Solar resource- 2102 KWh/m2/yr ; Land 55 Ha Tariff – 27.12Euro cent/KWh , 25 yrs PPA. Solar to Elect Efficiency – 21.4%. Plant Cost – 33 Million Euro , Rs~ 19.5Crore /MW. Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI

9. Concentrated Solar Power -Indian Market & Regulatory Proposals Incentives are mutually exclusive between State policies and MNRE. MNRE , GBI Scheme Limited to total of 50 MW, 10 MW/state and 5 MW/ developer. Policy limited to 1 year with revision on annual basis. Not avail with Acc Depreciation. No backup fuel allowed. Max Period of 10 yr. Connected to PPA with Utility with cap of Rs 9.5/unit. State of Gujarat Not available for MNRE facilitated projects. Valid for 500MW of Capacity , min cap of 5 MW. Valid upto March 2014. No Fossil fuel allowed. No Electricity duty. Tariff of 9 Rs /unit for 12yrs. Specifies penalty for Discom to fail meet RPO @ Rs 12/unit. Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI State of Rajasthan Ten year Promotional Tariff ( incl. GBI) to be Rs 13.18/unit. Plans to establish a Solar Energy Enterprises Zone (SEEZ) in the districts of Barmer, Jaisalmer and Jodhpur by offering a package of incentives to private investors. Back

10. Concentrated Solar Power -Indian Market & Regulatory Proposals-contd. CERC Solar Thermal T &C for Tariff. Benchmark Capital Cost Norm Rs 1530 Lakhs/MW Tariff Period- 25 yrs. Land Costs- 0.18 crores/MW ( @ 6 Acre/MW,3L/Acre). Loan Tenure- 10 years. Normative CUF- 23 % Depreciation- 7 % ( 1 st 10 yrs) RoE – 19% and 24 % O & M Expenses 13Lakh/MW Aux Cons – 10 % Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI

11. Concentrated Solar Power-Indian Project Proposals 10 MW SOLAR THERMAL Tower Power Project Acme Telepower, (Bikaner )Rajasthan. Uses Esolar’s new technology. Not yet proved. Pilot Plant of 2.5 x2 ( 5 MW) Operational since last year. No Performance Data yet available. Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI

12. Concentrated Solar Power-Indian Project Proposals- Contd Solar Thermal Power Plant at Bap, Jodhpur, Rajasthan based on Parabolic dish-sterling technology. Modular 3kW 3340 systems Total Cap . 10 MW Land Requirement - 70 Acres. EPC Contractor - INFINIA Corp, USA back Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI

13. Technical Issues Major Cost Forecasts Base Sargent & Lundy Cost & Performance Forecast. Allocated cost reduction due to Volume production (learning and improvements in manufacturing) Plant scale-up (increasing size), and Technology advances (RD&D) Assumes cost in range of Rs 6/unit to Rs 4.5/unit. Tower Plants overtake the cheapest source from trough plants before 2010. Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI Problems Assumed increased deployment hasn’t been found to happen. Costs in regions of SW USA or Upper EGYPT inc by at least 30 % when in regions like India.* Technology cost forecasts for tower are proved mistaken. Major Costs of Tower Plants Tech – 23% Scale up & Volume Prod. *Greenpeace Solar Outlook

14. Technical Issues-Contd. Insolation Level Measurement of specific sites. Use of New Unproved Technologies in tower systems. Unviable small scale plants. ( 5 – 10 MW)* Extent of indigenization is not high. Structures (precision assembly) Power Block (specialized turbine) Receiver/ Receiver tubes(very specialized ) Mirror surfaces/heliostats- doubtful(specialized low thickness upto 2 mm,hi reflectivity 92%,light weight) Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI Unreliable Dish Stirling Systems No utility scale plant online yet. Highest Land requirements (10 – 20 acre/Mw) , even more than PV . Infinia corp. haven't yet delivered high efficiencies. Major issues with maintenance, mean time between failure is reported to be around 40 hrs in a testimony of expert before US Energy Commision. * Expert Opinion,Sandia Labs

15. Economic Issues Capital Costs Technology of proposed projects. 1 Capital costs – Min .15.9 Crores (w / capital subsidy)* O & M Costs – Conn. to Capacity^; Staff Training Capacity Utilization Actual values depend on Insolation Extent of Storage Backup Fuel Allowances Best Case Values are around 15 to 21 % Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI * Data on Executed Tower Project in Spain ,Aus Govt Report on HTSP Roadmap ^ based on Experiences in US SEGS plants. 8%-to- 2 % Points Loss

16. Economic Issues-Contd Hidden costs Land development. Slope of land is key issue. ( 1%) Continuous areas of sufficient solar field as per requirement should be available. Effect of Land level in design of PS 10 ,Spain Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI USA CSP Resource Potential before applying filters of Land slope Continuous Land availability. DNI value USA CSP Resource Potential After applying filters of Land slope <= 1% Continuous Land availability.- 10 Kms DNI value - 6.75 Kwh/m2/day

17. Economic Issues-Contd Incentives mismatch USA Renewable portfolio standards of 20 to 30 % Federal Cash Grant of 30 % of expenditures, eligible to commercial systems. Commercial/Residential Tax Credit- not avail. With grant, income tax liability net of local grants. Federal Corp. Depreciation :- Accelerated upto the level of 50 % in first year ,also called as Modified Accelerated Cost-Recovery System (MACRS), classifies several renewable projects as 5 year property. Federal Loan guarantee Program:- Allows guarantees for long term repayments upto 90 % useful life or 30 years. Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI Incentives mismatch Spain Solar thermal focused special regulations.attracted 800 Mwe Plants. Special mechanism of high feed in tariffs provided along with capital subsidies from state govt.s and EU Option 1 – fix tariff of 0.28 Euro/unit. Option 2 – combination of market price ~ 0.16euro +premium upto 0.26 euro /unit subject to min (0.26 euro) and max (0.35 euro), 25 yrs., then 80 % Allowance of Fossil Fuel backup upto 15 %. Incentives mismatch India

18. Recommendations The Actual Assumptions based on Study analysis gives the tariff in ranges of Rs 27 – 22/unit. Capital costs ranging 16 to 19 crores/MW. O &M Costs indexed to Capital costs. ( ~ 2 %). Lower CUFs ( 18 to 21 %). Motive to produce reliable and dispatch able capacities. Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI Key Parameters having effect on tariffs are CUF. Loan Interest Rates. Loan Tenure. Capital subsidy. Allow Fossil fuel back up with fixed percentages(10-15%). Provide for state support and incentives for larger scale plants for establishing utility scale plants. Small Scale demonstrator plants should be setup with state as minority stakeholder to establish Life Cycle Costs to set up accurate T & C of Tariff. Develop a holistic approach for development of reliable power source, providing scope for storage . Prepare detailed DNI database for prospective Solar thermal Sites.

19. Queries are welcome ! Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI Ministry of New and Renewable Energy sources, http://mnes.nic.in/pdf/mission-document-JNNSM.pdf Central electricity regulatory commission, www.cercind.gov.in Various status reports of previous developments in solar thermal power generation across the world; www.osti.gov/energycitations Communications with Dr. Tom Mancini, CSP program Director , Sandia Labs USA SOLARPACES website, for detailed study reports, http://www.solarpaces.org/CSP_Technology/docs Concentrating Solar Power Reports, http://ec.europa.eu/energy/res/publications/doc/ Esolar’s website; http://www.esolar.com/sierra_fact_sheet.pdf Estella Solar; http://www.estelasolar.eu/fileadmin/ESTELAdocs/documents Rajasthan Electricity regulatory commission ; http://www.rerc.gov.in/Order/Tariff_for_Solar_Power_Order2APR08.pdf Presentations by Rainer Aringhoff, President Solar Millenium LLC, Berkley; 10 /1/2008 Final Report on “ Technical data, costs, and life cycle inventories of solar thermal power plants&quot; by Peter Viebahn, Stefan Kronshage, Franz Trieb (DLR), Yolanda Lechon (CIEMAT) funded EU , release 2008. National Renewable Energy Labs online library for accessing various reports including Sargent and Lundy's analysis; http://www.nrel.gov/csp/troughnet/pdfs/2007 to 2009 . Green peace report on solar thermal http://www.greenpeace.org/raw/content/international/press/reports/concentrating-solar-power-2009.pdf IEA website reports on CSP; http://www.iea.org/papers/2009/CSP_Brochure.pdf World bank’s Global Environmental Facility Report on status of solar thermal plants, 2005. HIGH TEMPERATURE SOLAR THERMAL TECHNOLOGY ROADMAP for Australia, by Wyld Group Pty Ltd for Australian states of Victoria and New South wales; 2008 . European Commission (2007), Concentrating Solar Power: Main Projects document; Supported By The Commission , Brussels. References

20. Major Modified Assumptions according to Real project experiences .(Tower) Capital Costs- 15.9 Cr/MW and more. O &M Costs- 2% - 2.5% of Cap Costs. C U F 19 % back Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI