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Renewable Energy Sources

PNBV Chalapathi Rao, Scientist B Solar Thermal Division

About MNRE
The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry of the Government of India for

all matters relating to New and Renewable Energy.


The broad aim of the Ministry is to develop and deploy new and renewable energy for supplementing

the energy requirements of the country.


Development of Ministry:
1981-Commission for Additional Sources of Energy (CASE)
1982-Department of Non-Conventional Energy Sources (DNES)

1992-Ministry of Non-Conventional Energy Sources (MNES) Ministry of New and Renewable Energy (MNRE) in 2006.

About MNRE
The Mission of the Ministry is to ensure
Energy Security: Lesser dependence on oil imports through development and deployment of alternate fuels and their

applications to contribute towards bridging the gap between


domestic oil supply and demand; Increase in the share of clean power: Renewable electricity to supplement fossil fuel based electricity generation; Energy Availability and Access: Supplement energy needs of cooking, heating, motive power and captive generation in rural, urban, industrial and commercial sectors;

Energy Affordability: Cost-competitive, convenient, safe, and


reliable new and renewable energy supply options; and Energy Equity: Per-capita energy consumption at par with the global average level by 2050, through a sustainable and diverse fuel- mix.

About MNRE
Vision
To develop new and renewable energy technologies, processes, materials, components, sub-systems, products & services at par with international specifications, standards and performance parameters

in order to make the country a net foreign exchange


earner in the sector and deploy such indigenously developed and/or manufactured products and services

in furtherance of the national goal of energy security.

Power Installation Capacity in India (As on 31-10-11)


Source Thermal Hydro (>25MW) RE Nuclear Captive Total Capacity (MW) % 119041 59% 38706 20162 4780 19509 2,02,198 19% 10% 2% 10%
2% 10%

Total Capacity = 2,01,066 MW


10% Thermal Hydro (>25MW) RE 19% 59% Nuclear Captive

Per Capita Annual Electricity Consumption in the World


Country Canada USA Australia Japan France Germany Year 2008 17053 13647 11174 8072 7703 7148

Korea
UK Russia Italy

8853
6067 6443 5656

South Africa
Brazil China India World

4770
2232 2471 734 2782

Per Capita Annual Electricity Consumption in India

Power Generation Costs in India by (2006)

Renewable Energy Certificate (REC) Mechanism

National Load despatch Centre (NLDC) is the


Central Agency for registration
1 REC = 1 MWhr

Renewable Energy Certificate (REC) Mechanism


Broad categories
solar certificates
Generation of electricity based on solar energy (SPV/ST)

non-solar certificates
Generation of electricity based on other Renewable Energy

sources, like Wind, Bio, Hydel etc

CERC has determined the price for trading

Renewable Energy Certificate (REC) Mechanism


RECs will be issued to RE generators and valid for 365 days from the date of issuance
RECs will be purchased by obligated entities

to meet their respective RPOs

Existing Power Purchase Agreement RE

generators on preferential tariff are not


eligible for REC mechanism

Renewable purchase Obligation (RPO)

Renewable purchase Obligation (RPO)

Renewable Energy potential in India

Renewable Energy Achievement in India (Up to 31/08/2011)


Source Wind Power Small Hydro Power (<25MW) Biomass Power Waste to Power Solar Power Total (MW) 2862 74 46 21,125

Capacity (MW)
14989 3154

% 70.95% 14.93% 13.55% 0.35% 0.22%


0.35% 0.22%

13.55%

14.93% 70.95%

Wind Power Biomass Power Solar Power

Small Hydro Power Waste to Power

Renewable Energy Achievement in India (Up to 31/08/2011)


Renewable Energy Programme/ Systems A. Grid-interactive power Wind Power Small Hydro Power Biomass Power Bagasse Cogeneration Waste to Power Solar Power Total (MW) B. Off-grid/ Captive Power Waste to Energy -Urban -Industrial Biomass Cogeneration Biomass Gasifiers -Rural - Industrial Hybrid systems SPV Systems (>1kW) Total (MWEq) -Urban -Industrial 25 200 3435 2400 350 460 833.00 111.30 86.50 111.50 1.20 8.50 1152.00 10.18 31.99 1.20 4.50 0.12 3.50 51.49 14989.00 3153.93 1083.60 1779.03 20.20 53.46 46.16 21125.38 3.50 72.30 327.95 15.55 125.88 1.24 72.50 618.92 Target for 2011-12 Achievement during 2011-12 Cumulative up to 31.08.2011

15.00 80.00 3.00 10.00 0.50 20.00 128.50

Solar Energy

Solar Radiation Recourses

Solar Power Potential

Solar map of world

India has 500-900 w/m^2

Pune to Bangalore belt has 700 to 800


w/m^2 Coastal India has poor radiation has 600 w/m^2 Australia has highest solar irradiation has 1000 w/m^2

SOLAR ENERGY Is it Renewable?

Sun burns 5 million tons of Hydrogen/sec

by fusion

It will burn for another 4.5 billion years

It will deplete in 4.5 billion years


Strictly after 4.5 billion years, it is not renewable, but nobody knows

Solar Terminology
Beam Radiation or Direct Radiation (Ib):
Solar radiation received at earth surface without change of direction and in line with sun

Diffuse Radiation (Id):


Solar radiation received at earth surface from all parts of skys hemispheres.

Global Radiation (IG):


It is the sum of beam radiation and diffuse radiation. IG= Ib + Id

Solar Irradiance or Insolation (w/m2):


The rate at which solar energy reaches a unit area at the earth. It is instantaneous measure of rate and vary over time.

Solar Energy Technologies


Solar Energy is the ultraviolet radiations from sun
Can be Converted into either Heat or
Electricity

Broad categories
Solar Photovoltaic (SPV)
Power generation

Solar thermal (ST)


Heating
Power generation

SRRA Stations across India

SRRA Station

Solar Radiation Monitoring Station


Sl. No. 1 Parameter Global Radiation Instrument Pyranometer*

2
3

Diffused Radiation
Direct Normal Incidence (DNI)

Pyranometer with Shade*


Pyrheliometer*

4
5 6

Ambient Temperature
Atmospheric Pressure Wind Speed & direction

RH/T Sensor
Barometer Ultrasonic Wind Sensor

7
8

Rainfall

Tripping Bucket Rain Gauge

Aerosol Measurements** To be decided

*Installed on Solar Tracker **to be installed at 5 sites only

Solar Radiation Monitoring Station


Sl. No. Parameter Instrument

9 10

Data Logging Accessories :


Real time data Network Installation of Met Sensors Power

Data logger with IP-67 Enclosure


GPRS built in modem in the data logger 6 meter triangular mast Solar Panel Array and battery storage

Installation of Solar Tracker 1.5 meter Mast

Time & Sun Synchronization External GPS

SRRA Sites
Sl. No. 1 2 3 4 5 6 7 8 9 10 11 States No. of stations Andhra Pradesh 06 Chhattisgarh 01 Gujarat 11 Haryana 01 Jammu & Kashmir 01 Karnataka 05 Maharashtra 03 Madhya Pradesh 03 Pondicherry 01 Rajasthan 12 Tamil Nadu 07 Total 51

Solar Thermal Technologies


Sub categorized based on the heat O/P
Low temperature (upto 600C)
Water heating and other low grade applications
Flat plate collectors

Medium temperature (upto 1500C)


Steam generation, Air drying
Flat plate, concentrators (disc)

High temperature (upto 3000C)


Mostly for power generation
Parabolic trough, Compact Linear Fresnel Reflector (CLFR), Parabolic dishes, Solar power tower

Solar Thermal Low and Medium Temperatures Technologies


Solar Water Heating Systems

Solar Thermal High Temperature Technologies


Power generation technologies can be classified as follows
Standalone solar technology
Solar thermal or solar PV

Hybridization
Solar + gas / coal / oil / any other fuel

Storage
Solar + Thermal Storage

All combinations - Solar + Fuel + Storage

Solar Thermal Technologies


Parabolic trough
It is the most widely deployed and proven type of solar thermal power technology A parabolic trough consists of a linear parabolic reflector that concentrates light

onto a receiver positioned along the


reflector's focal line The receiver is a tube positioned directly

above the middle of the parabolic mirror


and is filled with a with working fluid

Solar Thermal Technologies

Solar Thermal Technologies


Parabolic trough
The reflector follows the Sun during the daylight hours by tracking along a single axis. A working fluid is heated upto 150350 C and is then used as a heat source for a power generation system

World figures
Under operational Under construction = = 1143 MW 1375 MW

Solar Thermal Technologies


Solar power tower
Consists of an array of dual-axis tracking reflectors

(heliostats) that concentrate light on a central receiver


atop a tower The receiver contains a fluid deposit, which can consist of

sea water.
The working fluid in the receiver is heated to 5001000 C and then used as a heat source for a power generation

Solar Thermal Technologies

Solar Thermal Technologies


Solar power tower
Power tower development is less advanced than trough systems, but they offer higher efficiency and better energy storage capability.

World status:
Under operational Under construction = = 37 MW 388 MW

Solar Thermal Technologies


Compact Linear Fresnel Reflector
Fresnel reflectors are made of many thin, flat mirror strips to concentrate sunlight onto tubes through which working fluid is pumped

Flat mirrors allow more reflective surface in


the same amount of space as a parabolic reflector, thus capturing more of the

available sunlight, and they are much


cheaper than parabolic reflectors.

Solar Thermal Technologies

Solar Thermal Technologies


Compact Linear Fresnel Reflector
World status
Under operational = 8.4 MW 1 MW Under construction =

Solar Thermal Technologies


Parabolic dishes
System consists of a stand-alone

parabolic reflector that concentrates


light onto a receiver positioned at the reflector's focal point.

The reflector tracks the Sun along two


axes. The working fluid in the receiver is heated to 250700 C and then used for

generate power.

Solar Thermal Technologies

Solar Thermal Technologies


Parabolic dishes
Parabolic dish systems provide the highest solar-toelectric efficiency among CSP technologies, and their modular nature provides scalability.

World status
Under operational Under construction = = 2 MW 1 MW

Solar Thermal Technologies


Integrated Solar Combined Cycle (ISCC)
An ISCC plant comprises a conventional combined cycle (CC) plant, consisting of a gas or coal fired turbine, a heat retriever and a steam turbine with a solar field bolted on. Steam generated in the solar field is fed into the watersteam cycle of the CC plant, thereby increasing the power of the steam turbine

Solar Thermal Technologies

Solar Thermal Technologies


Integrated Solar Combined Cycle (ISCC)
Both high temperature and medium temperature CSP technologies are well suited for ISCC All the ISCC plants under construction are using parabolic trough technology

World status
Under operational Under construction = = 75 MW 65 MW

Solar Thermal Technologies


Summary of Technologies usage globally Operational capacity (MW) Parabolic Trough ISCC 1143 75 Construction Capacity (MW) Parabolic Trough Solar Power Tower 1375 388.4

Solar Power Tower


Fresnel Reflector Dish Stirling Total

37.5
8.4 1.72 1265.62

ISCC
dish Fresnel Reflector Total

65
1 0 1829.4

Source: en.wikipedia.org/wiki/List_of_solar_thermal_power_stations

Solar Thermal Technologies


Thermal Storage
Required to operate CSP plants smoothly and continuously,

with out auxiliary firing


Excess solar heat will be collected during the day and can be stored efficiently in liquid or solid substances
Molten salts, ceramics, concrete, or other materials

The heat can then be extracted from these storage media at night or during cloudy periods to generate electricity

Solar Thermal Technologies

Photovoltaic System

Solar Photovoltaic Technologies


Solar Photovoltaic Technology converts solar energy into direct electricity. Its is clean, reliable and ideal for both grid, off grid, remote and stand alone applications The system can be custom designed to meet the specific requirements of the customer. It produces Direct Current (DC) and require

inverters to convert to AC and can be stored in


batteries for use in non sun shine hours

PV Technology Classification
Silicon based Crystalline
Mono Crystalline (Single-Crystal) PV Cells Multi Crystalline (Poly-Crystal) PV Cells Amorphous Silicon (Thin film) PV Cells

Non-Silicon based Crystalline


Poly Crystalline PV Cells

PV Technology
Mono Crystalline (Single-Crystal) PV Cells
These are extremely thin wafers of silicon, cut from a single silicon crystal. These are most efficient silicon cells (12 to 15%) and have a life of 25 years

The cells have a uniform color, usually blue or black

PV Technology
Multi Crystalline (Poly-Crystal) PV Cells
These are cut from multiple crystals grown together in an ingot. They are slightly less efficient (10 to 12%) and requires more surface area to produce a given amount of electricity
However, the overall cost benefits are attractive

PV Technology
Amorphous Silicon (Thin film) PV Cells
Amorphous silicon is sometimes abbreviated "aSi" and is also called thin film silicon. Amorphous silicon units are made by depositing very thin layers of vaporized silicon in a vacuum onto a support of

glass, plastic, or metal.


The most advanced of thin film technologies Operating efficiency ~6 to 8%

Makes up about 13% of PV market

PV Technology
Non-Silicon based Crystalline
Copper Indium Diselinide
CIS with band gap 1 eV, high absorption
coefficient 105 cm-1 High efficiency levels ~ 15 to 18%

Cadmium Telluride ( CdTe)


Unlike most other II/IV material CdTe exhibits direct band gap of 1.4 eV and high absorption coefficient

PV Technology
Emerging technologies
Ultra Thin Wafer Solar Cells
Thickness ~ 45m Cell Efficiency as high as 20.3%

Anti- Reflection Coating


Low cost deposition techniques use a
metalorganic titanium or tantanum mixed with suitable organic additives

Wind Energy

Wind Power Potential

Wind power density at 50m above the ground

Wind Power Potential


Wind Potential for Nine Indian States

Wind Energy Technologies Wind Energy is converting kinetic

energy of wind into useful form


Mechanical energy water pumping Electricity energy power generation

Broad categories
Horizontal Axis Wind Turbines (HAWT)

Vertical Axis Wind Turbines (VAWT)

Sizes and Applications

Wind Energy Technologies


Horizontal Axis Wind Turbines (HAWT)
These are the most common style of wind mill The main rotor shaft, electrical generator and other axillaries will be kept at the top of tower They must be pointed towards wind direction for max

energy utilization
Small turbines are pointed by a simple wind vane Medium turbines use wind sensor coupled with servo motor Large turbines will have a gearbox, which turns the slow rotation of the rotor into a faster rotation and is suitable to drive an electrical generator

Wind Energy Technologies


Advantages
For every 10 m height, wind speed increases by 20% and the power output by 34% High efficiency, since the blades always move perpendicularly to the wind direction

Disadvantages
Massive tower construction, structural failures due to turbulence and maintenance issues Require an additional yaw control mechanism to turn the

blades toward the wind direction


Braking or yawing device required to stop the turbine at high winds to prevent damage

Wind Energy Technologies


Vertical Axis wind turbines (VAWT)
Here main rotor shaft arranged vertically, not pointing towards wind direction
Useful where the wind direction is highly variable or has turbulent winds

The generator and other primary components can be placed near the ground
Easies the construct and maintenance

No yaw mechanisms is needed and can be

installed on a building rooftop


Less wind energy is available for a given size
Wind speed is slower at a lower altitude

Growth of installed wind power capacity in India

Small Hydro Power

Small Hydro Power

Small Hydro Power


Hydropower is the oldest renewable energy technique known to the mankind for mechanical energy application as well as for electricity generation

Hydropower uses water resources to generate


energy Hydro power contributes about 25% out of total

power installation in the country

Small Hydro Power


Hydropower projects are generally categorized into
Small hydro, upto 25 MW Large hydro > 25 MW

Small hydro power projects are further classified as

Bio Energy

Bio energy
Three types
Biomass (solid), Biofuel (liquid), Biogas (gaseous)

Biomass
Biomass refers to agriwaste and organic forest residue, which includes
Wood, wood waste, straw, sugar cane leftovers, garden waste
and crop residues like baggase, prosopys, cotton stalk, elephant grass, coconut shell etc.

Bio energy
Biofuel
Bio-Diesel is produced from oils or fats.
Feedstock for Bio-Diesel include animal fats, vegetable oils, soy,
rapeseed, jatropha, mahua, mustard, flax, sunflower, palm oil, hemp, field pennycress, pongamia pinnata and algae. Pure Bio-Diesel is the lowest emission diesel fuel.

Bio-Ethanol is the most common Bio-Fuel worldwide.


It is produced by fermentation of sugars derived from wheat, corn, sugar beets, sugar cane, molasses and any sugar or starch that alcoholic beverages can be made from. Ethanol can be used in petrol engines as a replacement for gasoline.

Bio energy
BioGas
It is produced by the process of anaerobic digestion of

organic material by anaerobes


The organic material is biodegradable waste materials

The solid byproduct can be used as a Bio-Fuel or a fertilizer

Jawaharlal Nehru National Solar Mission (JNNSM)

JNNSM- Mission Objectives


JNNSM has been launched under the National Action Plan on Climate Change (NAPCC) on January,

2009 with an objective:


To establish India as a global leader in solar energy, by creating policy conditions for its diffusion across the

country
Mission anticipates achieving grid parity by 2022 and parity will coal based thermal power by 2030.

Aim of the mission is to focus on setting up an enabling


environment for solar technology both at centralized and decentralized level.

Mission Targets
3- phase approach has been formulated
Application Segment Phase - I 2010-13 Utility grid power Off- grid Applications Solar Thermal Collectors Area Manufacturing Base Solar Lighting Systems 1,100 MW 200 MW 7 million Sqm --Phase-II 2013-17 4,000-10,000 MW 1,000 MW 15 million Sqm --Phase- III 2017-22 20,000 MW 2,000 MW 20 million Sqm 4,000-5,000 MW 20 million

Mission Strategy
Create necessary environment to attract industry and project developers for investment in power

generation, manufacturing. Work closely with State governments, regulators, power utilities and local self government bodies. Attract banks and financial institutions to provide necessary finance for setting up solar power projects for grid/ off-grid. Promote off-grid solar applications to meet light and power requirements by provision of low cost credit through re-finance facility from IREDA

Policy & Regulatory framework


Solar Power Purchase Obligation Solar specific RE Certificates Incentivizing through NTPC Vidyut Vyapar Nigam Ltd. (NVVN) for setting up of large solar

power plants.
Rooftop solar PV and other small power plants connected to LT/11 KV grid with a remunerative feed-in tariff ( routed through IREDA)

Fund Requirements
First stage
A Grid Connected 1,100 MW Approximately Rs. 16,500 crores 200 MW Rs. 5,000 crores C Solar Thermal collectors 7 million meter square Rs. 7,000 crores

Second Stage
20,000 MW Approximately Rs. 3,00,000 crores 2,000 MW Rs. 50,000 crores 20 million meter square Rs. 20,000 crores

Off-Grid Applications

Current Status of Solar Power Projects


1. MIGRATION SCHEME 84 MW (54 MW PV + 30 MW ST) capacity selected

under migration
PPAs signed with 16 developers on 15th October 2010 PSA signed with Distribution Utilities of Rajasthan (66 MW), Maharashtra (11 MW) and Punjab (7 MW) Cost of bundled power = Rs. 5.69/kWh, considering

CUF PV(19%), ST(23%), NTPC (85%)


CERC tariff PV (Rs 17.91/kWh), ST (Rs 15.31/kWh) NTPC Power Rs. 3.00/kWh

Current Status Solar Power Projects


2. NEW PROJECTS 620 MW capacity solar projects by 37 bidders

selected by NVVN on the basis of discounting offered


on CERC tariff through bidding.
This includes 470 MW capacity solar thermal and 150 MW

solar photovoltaic projects.

PPAs with 36 SPDs signed for 615 MW capacity upto 10th January 2011. PSAs signed with Andhra Pradesh, Karnataka, Orissa, Punjab, Rajasthan, West Bengal, Uttar Pradesh

Current Status Solar Power Projects


2. NEW PROJECTS (Cont)

Cost of bundled power = Rs. 4.78/kWh, considering


CUF PV(19%), ST(23%), NTPC (85%) Discounted CERC tariff PV (Rs 12.16/kWh), ST (Rs 11.48/kWh) NTPC Power Rs. 3.00/kWh

Proposed CUF by SPDs


For Solar Thermal between 25-40% For Solar PV between 21-24.5%

Current Status Solar Power Projects


2. NEW PROJECTS State wise capacity
S. No. State Solar PV Capacity (MW) Solar Thermal Total

1
2 3 4 5 6 7

Rajasthan
Gujarat Andhra Pradesh Karnataka Maharashtra Orissa Tamil Nadu

105
15 10 5 5 5

400
20 50

505
20 65 10 5 5 5

Uttar Pradesh
Total

5
150 470

5
620

Contract Structure PPA & PSA


NTPC & NVVN signs a PPA for X MW of coal power for a term of 25 years at a Tariff determined by CERC.

Contract Period: 25 years

from Date of Commissioning Back-to-back contracts: PPAs and PSA are on backto-back basis

PPA

X MW

X MW X+X MW

NVVN

PSA

Discom

SPD & NVVN signs a PPA for X MW of Solar power for a term of 25 years at a Tariff determined by CERC.

NVVN bundles X MW Solar Power with X MW unallocated coal power and come up with a bundled tariff PPAs and PSA are on back-to-back basis

NVVN & Discoms signs a PSA for 2X MW Bundled Power at the rate identified in the PSA.

Rooftop and other Small Solar PV Power Plants up to 2 MW


78 Projects of

capacity 98 MW
shortlisted.
PPAs where signed and registered with

IREDA

Current Capital Cost


Capacity Capital Expenditure

(MW)
1-5 5-10

(Rs Crores /MW)


17 16

10-50
50-100

15.5
15

STATUS OF GRID POWER PROJECTS


TOTAL INSTALLED CAPACITY = 146.5 MW
MNRE PROGRAMMES = 84.5 MW STATE PROGRAMMES= 62.0 MW

MAJOR STATES
GUJARAT RAJASTHAN TAMIL NADU KARNATAKA 51 MW 43.65 MW 7 MW 6 MW

MAHARASHTRA 18 MW

Policies for Renewable Power


The Electricity Act 2003, mandates to:
Create competition, protect consumers interest & power for all Facilitate private sector investments Permit stand-alone systems rural areas Provide open access Determination of preferential tariff Specify minimum percentages for purchase of

renewable power

Policies for Renewable Power

Policy Direction
Introduction of Generation Based Incentives. Introduction of Penal provisions for not meeting

RPOs.
Introduction

of Tradable Renewable Energy

Certificates.
Renewable Energy Law

Policy Framework for Renewable


Favorable fiscal/policy environment exists for development of RE sources economically supported by Government subsidies and fiscal incentives From central Government
Income Tax Holiday Accelerated Depreciation Concessional Custom Duty/ Duty Free Import Capital/ Interest Subsidy

Policy Framework for Renewable


From State Government
Energy buyback, power wheeling and banking facilities Sales Tax concession benefits Electricity Tax Consumption Demand cut concession offered to industrial consumers

who establish power generating units from RE sources.


Capital Subsidy

Regulatory Frame Work


Central Electricity Regulatory Commission set up to deal with licensing issue for power trading and interstate transmission and tariff related issues 24 States have constituted State Electricity regulatory Commissions to deal with tariff issues and licensing issues.

17 states have announced RE policy.

Other Policy Support


Industrial clearances is not required for setting-up of renewable energy industry.

No clearance is required from Central Electricity Authority for power


generation projects upto Rs. 1000 million. Facilitates for promotion of export oriented units are available for renewable energy industry also. Financial support is available to renewable energy industries for taking up R&D projects with technology institutions. Assistance for Export Promotion and Market Development

Blending of Ethanol is allowed upto 5% with Gasoline.


Concessional customs duty on imported items for power generation RE projects

Market Barrier

1. Solar Technology Low awareness Technology Input variation Output variation Yearly variation 2. Industrial Experience of Technology

3. Standards of technology not there Efficiency Output/ Input standard Component standard 4. Cost of the system Cost of System Availability hours

Integration with back up

Cost of back up

Research and Development


To set up a solar research council to guide the

overall technology development strategy


To establish a national centre of excellence to implement the plans formulated by the council.

Main tasks will be testing and certification,


developing standards and specifications, networking among different research institutions.

Status of Grid Solar Power-I Small Power Plants up to 2 MW


Projects for 120 MW shortlisted.

Projects up to 100 MW capacity where PPA


signed and registered with IREDA, are finalized. Compliance to technical standards mandatory. GBI will be given to DISCOMs on reimbursement basis.

Status of Grid Solar Power-II Power Plants above 5 MW capacity


1,000 MW Capacity allocation between SPV and ST

to be 50:50 by NVVN
84 MW capacity projects (54 PV & 30 Thermal) allocated under Migration Selection of PV projects to be done in two batches First Batch in 2010 and limited to 150 MWp Second batch next year of approximately 300 MWp Solar Thermal: selection for 470 MW to be done in 2010

Channelization of Funds for Off-grid Solar Applications


Funding under scheme Project mode. Directly by MNRE (approved by PAC) Scheduled commercial banks, NBFCs, FIs such as NABARD, NHB, SIDBI, IREDA etc.

Additional channels for supply and maintenance


(RESCOs, Financial Integrators, System Integrators, MFIs, Government agencies etc.)

Channelization of Funds for Off-grid Solar Applications


Accreditation

Performance Monitoring
Refinancing MoU signed by IREDA with NABARD, NHB and Central Bank of India.

Financing Schemes
Project Financing Schemes Equipment Financing Schemes Financing Through Intermediaries Quantum of Assistance - Upto 70% of Project Cost Rate of Interest - 11.25% to 12.75%

Repayment Period - Upto 13 Years

Resource Base
Authorized Share Capital :Rs 1000 Cr

Paid-up Capital
Net-worth

:Rs 520 Cr
:Rs 871 Cr :Rs 1115.69 Cr

Domestic Borrowings :Rs 773 Cr


International Borrowings

International Partners
Govt of Netherlands, 1991 World Bank (1st LoC), 1993 DANIDA, 1993 : 18 Million Dutch Guilders :$ 145 Million :$ 15 Million

Asian Development Bank, 1997 :$ 100 Million KfW, Germany (1st LoC), 1999 : 61.35 Million

World Bank (2nd LoC), 2001


KfW, Germany (2nd LoC), 2008 KfW, Germany (3rd LoC)

:$ 110 Million
: 50 Million : 19.9 Million

Lines of Credit in Pipeline


AFD (France) JICA (Japan) : 80 Million :$ 100 Million

Highlights
Dedicated FI for RE Financing Unique in the World Specialized knowledge of RE / EE sector

Recognized internationally High Brand Equity


All Multilaterals/ Bilateral prefer working with IREDA Perceived as a leader in the sector

Profit earning & dividend paying


Rated Excellent for FY 2008-09
Expected Rating Excellent for FY 2009-10

NBFC as per RBI Classification ISO 9001:2000 Certified Company

Role of IREDA under JNNSM


Type of system Grid connected projects Small solar power projects Role of IREDA Financing of Projects Financing of Projects

and roof top systems

Generation Based Incentive


Monitoring

Off- grid applications

Soft loans through banks by re-financing Monitoring of the systems

Solar thermal sectorSWHS

Administration of Interest subsidy scheme through banks / financial institutions Funding of projects Funding through intermediaries

Solar Manufacturing

Soft loans Working capital

Re-financing facility as per MNRE

Risk Factors in Funding Solar Projects

Risk Factors in Funding Solar Projects


Regulatory Risk Fixing of the tariff and assurance on the power sale agreement Technology Risk Implementation Risk Infrastructure Risk Repayment Risk Technology yet to be proven on the ground Uncertainties in the implementation of the project as per schedule Inadequate evacuation facility and clearances on land and other statutory clearances. Non assurance of repayment from the utilities may result in repayment risk to the developers/ FIs.

Risk Factors in Funding Solar Projects


Financial Risk In time financial closure by the project developer.

High cost so funding from single source is a risk.


Raising of equity Guarantee and Long term guarantee and warranty from the

Warranty Risk
Political Risk

technology providers for the new technology.


Changes in fixing of unallocated power with respect to change in political system.

Policy Risk

Assurance of long term policy with greater accuracy and uncertainties in development of the solar sector.

Suggestions for Risk Mitigation to finance Solar Projects

Suggestions for Risk Mitigation


Ad vocation for long term/stable/consistent policies at central / state level- to honor PPAs and MoUs

Frequent/close interaction with all stake holders including


regulatory commissions to stipulate appropriate GBI/PPA based on capital cost.

Proper Resource assessment studies. Provision of partial risk guarantee fund from Govt. Importance projects. To create special single window clearance cell at state level. of timely clearances/approvals for solar

Suggestions for Risk Mitigation


Promoters to take advance actions to avoid delay of deliveriesto meet targets under JNNSM. To encourage establishment of more manufacturing units/ suppliers in the country- to deliver indigenous cells and modules as per the requirement of JNNSM . To establish a mechanism to have information exchange between various FIs and banks-for co-financing or consortium financing. Detailed site survey reports to be undertaken through

professional bodies- to maximize performance efficiencies.


To establish more training institutions for producing skilled manpower-capacity building.

Suggestions for Risk Mitigation


To stipulate suitable conditions for recovery of loan from operations of solar projects in the event of failure of core business (for non IPP projects). Concurrent monitoring of projects by Fis by appointment of lenders engineers. Periodic inspection / monitoring of projects even after implementation. (TRA and Generation data)

Innovative financing models by accessing low cost


funds from international institutions.

Financial Incentives
Soft loan at @ 2 % for domestic sector @ 3% for non profit organizations and 5% for profit making

organizations
5 years loan repayment period 5 years Annual Maintenance Contract

85% of project cost as loan, availability for any capacity and for any end user
80% Depreciation for end user Custom and Excise Exemptions

GBI based incentives @ Rs 18.45 for SPV and Rs. 15.31 for solar thermal power

List of Project Developers Qualified for Migration to JNNSM

Name of applicant Acme Tele Power Ltd, Gurgaon Dalmia Solar Power Ltd, New Delhi Entegra Ltd, Ansal Bhawan, New Delhi

State Rajasthan Rajasthan

Capacity (MW) 10 10

Rajasthan

10

In the first phase 16 developers projects submitted based on SPV with an aggregate capacity 84 MW and Solar Thermal with an aggregate capacity 30 MW

Mission
The Ministry of New and Renewable Energy, Government of India have proposed to develop

solar PV capacity of 100 MW as follows:Sl. No Project Category


1 Projects connected at HT level of distribution network with installed 80 MW

Capacity limit

capacity of 1 MW and up to 3 MW
2 Projects connected at LT level of distribution network with installed 20 MW

capacity lower than 1 MW

Components Of Tariff
The following are the components of tariff for solar energy:
Capital Cost Capacity utilization factor De-rating Debt-equity ratio Term of loan

Rate of interest
Interest on Working Capital Return on equity Life of plant and machinery Rate of depreciation Operation and maintenance expenditure Auxiliary Consumption

Accelerated Depreciation Benefit

Capital Cost
The cost of a solar power project is mainly dependent on the cost of PV modules / plant and machinery, technology adopted, location of the site and capacity The Indian Renewable Energy Development Agency Limited (IREDA) has recommended a capital cost of Rs. 18 to 20 Crores per MW for Solar PV thin film technology and Rs. 22 to 25 Crores per MW for Solar PV single / multi crystalline technology The Commission decides that the Infrastructure Development Charges (IDC) of Rs. 25.75 lakhs per MW should be loaded to the capital cost. Accordingly, the capital cost is refixed as Rs. 17.1575 crores per MW.

Solar PV has one of the highest capital costs of all renewable energy sources, but it has relatively low

operational costs, owing to the low maintenance


and repair needs. For a solar PV power plant, the approximate

capital cost per MW is approximately Rs. 16 crores


the precise cost depends on scale. This includes the cost of panels, the balance of systems, the cost of land and other support infrastructures.

Component Solar panel arrays Inverter Balance of System Installation

Amount

% of

(in Rs crores)
8 2 2 2

Total
50 12 13 10

Others (Infrastructure,
Margins)

15

Capacity Utilization Factor (CUF)


CUF is the ratio of actual energy generated by the Solar PV project over the year to the equivalent energy output at its

rated capacity over the yearly period. CUF for Solar PV project
depends on solar radiation and number of clear sunny days. The Indian Renewable Energy Development Agency Limited

(IREDA) has recommended a CUF of 15 to 20%.


The maximum solar radiation in Tamil Nadu is 5.8 kWh/Sq.mtr/day in the Solar Radiation Handbook, 2008 of MNRE has projected annual solar insolation in Chennai as 5.37. Considering the above, the Commission adopts a CUF of 19% in this order as adopted by the CERC

De-rating
De-rating factor has not been foreseen by other
State Commissions / CERC. It is natural that any material used in the PV module for energy conversion, loses its efficiency due to Aging Being a new area without information on past

performance parameters, fixation of de-rating


factor for a Solar PV Plant can only be an approximation. IREDA has recommended a de-

rating factor of 0.5 to 1% per annum

Term of Loan
The Commission fixed a tenure of ten years
with moratorium of one year in its Tariff Order based on the consideration that term loans sanctioned by IREDA stipulated this tenure. The Commission decides to retain the same tenure in this order.

Rate of interest
CERC has considered the long-term PLR of State Bank of India plus 150 basis points

as adequate. TEDA has recommended


interest rate of 12% with repayment

period of 7-8 years.


The Commission considers that interest rate of 12% is reasonable

Interest on Working Capital


The CERC has included the following components in working capital in their Regulations, 2009:
Operation and Maintenance expenses for one month; Maintenance spares @ 15% of the O&M expenses, Receivables equivalent to 2 months of energy charges for sale of electricity calculated on the normative CUF;

Commission has decided to adopt an interest rate of 12% on


working capital as considered in order of 2009 along with the following working capital component :
Operation and Maintenance expenses for one month; Maintenance spares @ 1% of the O&M expenses and Receivables equivalent to 1 month of energy charges for sale of electricity calculated on the normative CUF.

Return on Equity
CERC has adopted RoE of 19% pre tax for the first ten years and 24% for the remaining 15 years for solar PV projects The Commission decides to adopt 19.85%

pre-tax return on equity for this order.

Life of plant and machinery


The Commission decides to consider the

solar

PV

plant

life

of

25

years

as

considered by CERC in their Terms and

Conditions for Tariff determination from


Renewable Energy Sources Regulations, 2009.

Rate of Depreciation
CERCs recommended Differential Depreciation Approach over loan tenure and period beyond loan tenure over useful life computed on Straight Line Method. It is proposed to adopt the rate prescribed in the CERCs regulation, i.e. depreciation rate of 7% for

the initial 10 years and 1.33% for the remaining


years.

Operation and Maintenance expenses


O&M expense includes expenditure on manpower,

repairs,
cost.

spares,

consumables,

insurance

and

overheads and has suggested 0.5% of the capital

Commission decides to adopt the rates prescribed


in the CERC regulation.
i.e. Rs. 9.515 Lakhs per MW for the first year of the Control period (2010-11) and shall be escalated at the rate of 5.72% per annum for the remaining periods.

Auxiliary Consumption
Auxiliary consumption is the auxiliary power

requirement for equipments / devices for cooling of

the

power

conditioning

units,

lighting

of

office/station yard, water sprinklers, monitoring and control units, communication services etc. Commission considers 2% of auxiliary consumption is reasonable for solar PV power plants.

Accelerated Depreciation Benefit


For the projects availing the benefit of accelerated depreciation as per applicable income tax rate @ 33.99% (30% IT rate+ 10% surcharge +3% Education cess) has been considered.

Generation Based Incentives


The key attributes of the GBI Scheme are:
Any Project that is commissioned after 31st December, 2009

A maximum incentive with a 5% reduction and ceiling of Rs. 11.40


per KWh. The generation based incentive will continue to decrease as and when the utility signs a PPA for power purchase at a higher rate. Solar PV power generation plants of a minimum installed capacity of 1MWp per plant, either a single unit or modular units at a single location will be eligible for generation based incentive.

However, 1 MWp capacity may be setup through modular units at a


single location.

Contacts
www.mnre.gov.in, www.ireda.in Dr Ashviki Kumar, Director, Solar Thermal, Power Projects,

ashvinikr@nic.in, 24363546
Dr. Sant Ram, Director, Solar Thermal (off-grid), santrammnes@nic.in, 24361920 Dr B. Bhargava, Director, Solar PV (Grid), bhargava@nic.in, 24361891 Dr G. Prasad, Director, SPV (off-grid), g.prasad@nic.in Dr. A. R. Shukla, Advisor, Bio-Gas, shuklaar@nic.in, 24361604 Dr. D.K. Khare, Director, Bio-Mass, dkkhare@nic.in, 24363402

Mr A.K. Dhussa, Director, Waste to Energy, akdhussa@nic.in, 24364188


Mr Dilip Nigam, Director, Wind Energy, dilipnigam@nic.in, 24368911 B.V. Rao, GM, IREDA, b.v.rao@ireda.in,

THANK YOU