Renewable Watch August 2018 by Mohit Shrimal

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Volume 8 z No. 10 z August 2018

Technology Focus

Solar-wind hybrids 54

Trends & Developments

Perspective

Spotlight

Plus

From biogas to

Interview with Himachal

EPC for

Forecasting and scheduling to ensure grid stability . . . . 24

bio-CNG

Pradeshâ&#x20AC;&#x2122;s Tarun Kapoor

renewables

Powergrid focuses on renewable power transmission . . 48 Maharashtra moves in the green direction . . . . . . . . . . . 70

Winners of solar capacity auctions in July 2018 . . . . . . 90

Volume No. 8 Issue No. 10

EDITORIAL

EDITORIAL PUBLISHING Alok Brara

EDITOR-IN-CHIEF

Overshadowed by the safeguard duty row and the sharp depreciation in the rupee, India’s solar energy segment is staring at a period of policy and legal uncertainty, and possible tariff hikes.

Nandita S. Kochhar

EDITORIAL OPERATIONS Mudita Mehta (Senior Director) Devangshu Datta (Consultant) Shyama Warner (Consultant)

EDITORIAL Rama Sudhakar Patnaik (Consultant) Sayantanee Ghosh (Sr. Subeditor) Sugandha Khurana (Sr. Subeditor)

The debate over the imposition of safeguard duty on solar cells has been going on for over a year, with the initial proposal recommending a 70 per cent duty for a period of 200 days. After months of debate and speculation, the Directorate General of Trade Remedies submitted its final recommendation, proposing a 25 per cent duty. The Ministry of Finance notified this recommendation, levying a 25 per cent duty on solar cells imported from China and Malaysia. The duty came into effect on July 30, 2018, when there was an ongoing case with the Orissa High Court, which had directed the government not to issue any notification regarding the safeguard duty until August 20, 2018. The petitioners - Hero Future Energies, ACME and Vikram Solar - again approached the high court, which then directed the ministry to withdraw the notification for the time being.

RESEARCH Associate Director: Dolly Khattar Associate Director: Ashay Abbhi Research Analysts: Anukriti, Khushboo Goyal

BUSINESS DEVELOPMENT Raman Dev Narang (Deputy CEO) Mohit Shrimal (Manager)

DESIGN Joybroto Dass (Art Director) Jaison Jose (Sr. Graphic Designer)

ADMINISTRATION Jose James

In another development, the rupee has depreciated sharply in the past few months, affecting both domestic solar developers and project component suppliers. The rupee dropped to a record low of Rs 70 per US dollar. These developments will not only have an adverse impact on solar tariffs but will also slow down capacity addition in the sector. Most of the solar project tenders stand cancelled today or are facing bid submission deadline extensions due to the looming uncertainty over the duty structure. Against this backdrop, it has become difficult to ascertain if the government will go ahead and push the case for imposing safeguard duties, driving up the cost of solar power projects and, hence, tariffs. If it decides to impose these duties on the ongoing and upcoming projects, an even bigger challenge will be to convince the already struggling discoms to procure solar power at higher tariffs.

CIRCULATION Sumita Kanjilal

PHOTOGRAPHY Pallee

PRINTING/PROCESSING IPP Ltd

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July 2018 ● Renewable Watch ● 3

CONTENTS

Technology Focus

Environment of uncertainty

Solar-wind hybrids

Safeguard duty row adversely impacts solar power development

From biogas to bio-CNG

Spotlight EPC for renewables

Growing interest in new environment-friendly fuel alternative

CONTENTS NEWS BRIEFS

TRENDS AND DEVELOPMENTS Environment of uncertainty: Safeguard duty row adversely 20 impacts solar power development

Reducing deviations: Strict forecasting and scheduling of renewables to ensure grid stability Discom ratings: Gujarat leads for the sixth consecutive year Green buildings: Towards a more energy efficient future From biogas to bio-CNG: Growing interest in new environment-friendly fuel alternative Call for attention: SHIP holds immense potential but lacks policy push COMPANIES MGVCL: Aiming for greater grid reliability through

technology “India is a key upcoming market”: Interview with Jinko Solar’s Donald Leo 4 ● Renewable Watch ● July 2018

PERSPECTIVE

“Our main focus will be on small-hydro”: Interview with Tarun Kapoor Infrastructure revamp: Powergrid focuses on improving renewable power transmission “POSOCO is focused on making a self-healing grid”: Interview with POSOCO’s K.V.S. Baba

46 48 50

28 32 36 40

42 44

FINANCE Mixed results: Performance of key solar and wind power companies

TECHNOLOGY FOCUS: SOLAR-WIND HYBRIDS Creating synergies: Solar-wind hybrids could be the answer to India’s power problems

Setting a trend: SECI tenders India’s first large-scale 56 wind-solar hybrid capacity Early mover: Gujarat launches its wind-solar hybrid policy 60 Bridging the gap: Case for solar-wind hybrids with storage 61 solutions

CONTENTS

Interview with Tarun Kapoor “Our main focus will be on small-hydro”

State Focus Himachal Pradesh and Maharashtra

CONTENTS SPOTLIGHT: EPC FOR RENEWABLES Solar EPC trends: Emergence of end-to-end players in the segment

Changing business models: Competitive bidding regime disrupts the wind EPC market

WORLD VIEW Wind rich: Offshore power hub to help meet Paris Agreement goals

PRODUCT RELEASE Products in the market

EVENT WATCH

DATA AND STATISTICS

Solar statistics: State-wise achievements Tender update: Recent issues and bid extensions Tender results: Winners of solar capacity auctions in July 2018

86 88 90

UP AND COMING A promising start

PHOTOGALLERY Sector snapshots

6 ● Renewable Watch ● July 2018

82 Raju Naidu, Juwi India Renewable Energies Private Limited 82

STATE FOCUS: HIMACHAL PRADESH AND MAHARASHTRA Fresh fillip: Himachal Pradesh focuses on promoting SHP 68 and solar projects

Green outlook: Maharashtra moves in the right direction in the renewables space

PEOPLE M.M. Nayak, APSPDCL

FORM IV Publisher: Alok Brara Printer: Alok Brara Owner: India Infrastructure Publishing Private Limited Editor: Alok Brara Printing Press: International Print-o-Pac Limited, C-4 to C-11, Hosiery Complex, Phase-II Extension, Noida 201305 Place of Publication: B-17, Qutab Institutional Area, New Delhi 110 016

NEWS BRIEFS

National News Policies and Programmes

he government is drafting a Rs 80 billion scheme to promote 12 GW of local solar cells and panel manufacturing without violating the World Trade Organisation (WTO) guidelines. The PSUs will now issue tenders for setting up solar power projects using locally manufactured equipment. The electricity generated from these plants will then be used for their own consumption, in accordance with the WTO rules. The scheme will be implemented over a period of four years, and ensure a minimum manufacturing capacity of 3 GW of solar cells per year.

he government has approved the launch of the Scale-up of Access to Clean Energy programme for financial years 2018-19 and 2019-20. The programme is based on the ongoing Scaleup of Access to Clean Energy for Rural Productive and Domestic Use project at UNDP. It aims to develop the market for renewable energy technology packages for rural livelihoods in Assam, Madhya Pradesh and Odisha. The overall cost of the programme is Rs 700 million. State nodal agencies will issue tenders for the implementation of the project. The MNRE will provide 30 per cent of the benchmark or the tender cost, whichever is lower, as subsidy the eligible beneficiaries. An additional subsidy will be provided for new, complex and noncommercialised technology systems. The project commissioning time frame is 12 months for general category states and 15 months for north-eastern states.

he Ministry of New and Renewable Energy (MNRE) has approved the Energy from Urban, Industrial and Agricultural Waste/Residue programme for the plan period 2017-20. Under the programme, the government will provide a central financial assistance (CFA) of Rs 780 million for biogas, bio-CNG, enriched biogas and biomass gasifier projects up to 2019-20. The amount of capital subsidy per project will be capped at Rs 100 million. The state nodal agencies will receive 1 per cent of the eligible CFA (capped at Rs 500,000) for developing and monitoring the project even after its commissioning. In addition, financial support will be provided for research and development projects, setting up of test centres, technology upgradation, and performance evaluation of institutions and industries. To avoid project cancel-

8 ● Renewable Watch ● August 2018

lation and claim the CFA, the waste-to-energy and biomass gasifier projects must be commissioned within a period of 24 months and 12 months respectively.

he MNRE has launched Phase III of the Off-grid and Decentralized Solar Photovoltaic [PV] Applications Programme for 2018-19 and 2019-20. For 2018-19, the project development target has been set at 50 MW with a proposed outlay of Rs 2,760 million. For 2019-20, this target will increase to 68 MW with a proposed outlay of Rs 3,800 million. The programme aims to install 300,000 solar street lights and 100 MW of solar projects in areas where grid power is unavailable, with a special focus on the Northeast and Left Wing Extremism-affected districts. In addition, the programme will provide 2,500,000 solar-powered study lamps to schoolgoing children in these regions.

he Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) will provide subsidy to the tune of Rs 15,000 per KW to residential consumers for the installation of rooftop solar PV systems in the state. However, the maximum subsidy limit for any project is Rs 30,000. The government aims to increase the affordability of solar PV systems for residential consumers through this initiative. The state subsidy will be provided in addition to the 30 per cent CFA given by the the MNRE.

he Delhi government is planning to launch a Solar Rooftop Demand Aggregation Programme for domestic customers, with an expected aggregate demand of 40 MW using the renewable energy service company (RESCO) model. With low upfront capital expenditure, the RESCO model will incentivise home owners and resident welfare associations to adopt rooftop solar. The Delhi government aims to set up 1 GW of generation capacity by 2020 and 2 GW by 2025 through rooftop solar installations. In line with the state’s targets, BSES Rajdhani Power Limited recently launched the solar city initiative as a solar rooftop consumer aggregation programme for residential buildings.

he Delhi government has approved the Mukhyanmantri Kisan Aaye Badhotri Solar Yojna for farmers in the state. This programme is only applicable for farms in the city’s green belt area. Under the scheme, a maximum of one-third of the agricultural land’s surface area can be used for the installation of solar panels. The minimum height of the solar PV panels has been set at 3.5 metres. The projects are to be developed using a RESCO model and the Delhi government’s departments such as the health department, the PWD and Delhi Jal Board will sign power purchase agreements (PPAs) with the developers for the procurement of power. Farmers are estimated to receive about 1,000 kWh of free power per acre from the solar project every year.

Regulations

he Ministry of Finance (MoF) has issued a notification to defer the 25 per cent safeguard duty imposed on solar cells and modules

NEWS BRIEFS following a directive from the Odisha High Court. This decision is in compliance with the interim directions issued by the Odisha High Court. As per the MoF, there would be no insistence on the payment of safeguard duty for the time being. Earlier, in July 2018, the ministry had imposed a 25 per cent safeguard duty on solar panel imports from China and Malaysia for a year, followed by 20 per cent duty for the next six months, and 15 per cent duty for another six months.

he Andhra Pradesh Electricity Regulatory Commission (APERC) has withdrawn the generation-based incentive (GBI) offered to wind energy generators in the state. This is a result of the curtailment of the enforcement period of the wind tariff order, 2015. The order will be ineffective from April 1, 2017. According to the APERC, the discoms can now procure wind power through competitive bidding.

he Maharashtra Electricity Regulatory Commission (MERC) has approved a tariff of Rs 2.52 per kWh proposed by Maharashtra State Electricity Distribution Company Limited (MSEDCL) for procuring 250 MW of wind power on a short-term basis to fulfil its non-solar renewable purchase obligation (RPO). MERC has also approved changes suggested by MSEDCL in line with the wind bidding guidelines issued by the MoP in December 2017. As per the revised guidelines, all intra-state wind power projects with a minimum capacity of 1 MW and to be commissioned on or before March 31, 2019 will be eligible to participate in MSEDCL’s proposed tender. The selected projects will need to maintain a minimum capacity utilisation factor of 17 per cent. MSEDCL will sign PPAs for an eight-year period. The repowering of wind turbines will be allowed with due approvals from MSEDCL after a period of six months from the execution of the PPA.

ERC has issued a clarification on the terms of granting open access for solar power projects in the state. According to MERC, the nodal agency will grant medium-term open access or shortterm open access only if the resultant power flow can be accommodated in the existing distribution system. The clarification came in response to a petition filed by Roha Dyechem Private Limited seeking MERC’s directions to MSEDCL for clarifying the terms of open-access permissions.

ERC has reviewed the RPO compliance deadline for MSEDCL for 2016-17. MERC noted that MSEDCL had fallen short of its stand-alone solar RPO target by 690 MUs for the period, adding to the existing shortfall of 1,360 MUs. Thus, the cumulative shortfall in RPO compliance now stands at 2,050 MUs. In response, MSEDCL cited the inability to trade in solar renewable energy certificates (RECs), owing to the Supreme Court judgment, as the primary reason for the shortfall. MSEDCL also stated that it had floated tenders of 1,000 MW and 300 MW for long-term and short-term procurement of power respectively. In addition, PPAs for a total capacity of 1,327 MW have been executed. In light of the above developments, MSEDCL requested MERC to allow it 10 ● Renewable Watch ● August 2018

to fulfil the shortfall by March 2020. The appeal was denied by MERC, which has set March 2019 as the deadline for MSEDCL to meet its total RPO targets. These targets can be met either through the purchase of solar power or solar RECs.

PNEDA has issued the draft guidelines for setting up private solar parks in Uttar Pradesh. As per the draft guidelines, private players can develop a solar park either by utilising the MNRE grant or through their own finances. Uttar Pradesh Power Corporation Limited will offer to purchase 100 per cent of the power generated from the solar park. The state will also allow the sale of the entire energy generated to any third party through open access. The draft regulation provides for different clauses for each type of solar park.

he Haryana Electricity Regulatory Commission (HERC) has issued an order amending its terms and conditions for the determination of tariff from Renewable Energy Sources, Renewable Purchase Obligation and Renewable Energy Certificate Regulations, 2010. According to the order, the capacity utilisation factor for solar PV and wind projects will be 19 and 35 per cent respectively. The operation and maintenance (O&M) expenses for solar projects would be based on the market conditions; this has not yet been decided for wind projects. The revised minimum RPO from solar projects for financial years 2018-19, 2019-20, 2020-21 and 2021-22 is now 4, 5.5, 7 and 8 per cent respectively, whereas for non-solar projects (excluding hydro) it is 3 per cent for the same time period.

Projects

he Solar Energy Corporation of India (SECI) has tendered 750 MW of grid-connected PV projects to be developed on a build-ownoperate (BOO) basis across Rajasthan. A bidder can bid either for a single project with a minimum capacity of 10 MW or for the entire tendered capacity. The upper tariff ceiling for the tender has been set at Rs 2.93 per kWh. The successful bidder will be responsible for the development and maintenance of the transmission system that connects the project with the nearest substation at a voltage level of 33 kV or above. In addition, the successful bidder will have to ensure financial closure and land acquisition within 12 months from the effective date of the PPA. The developers will sign 25-year PPAs with SECI. The deadline for bid submission is September 14, 2018.

ECI has retendered 1.2 GW of the cancelled 2 GW Tranche V interstate transmission system (ISTS)-connected wind capacity. The new tender has a bid submission deadline of August 24, 2018. The projects will be developed on a build-own-operate (BOO) basis. A single bidder can bid for a minimum capacity of 50 MW and a maximum of 600 MW. The successful bidders will enter into PPAs with SECI for a period of 25 years. The scope of work includes the setting up of the wind power projects as well as the transmission network up to the delivery point. The 2 GW Tranche V tender was first issued in May 2018, but was can-

NEWS BRIEFS celled as it was undersubscribed by 800 MW. For the tender, ReNew Power, Adani Green, Sprng Energy, and Alfanar had submitted bids for 300 MW each.

ECI has issued a domestic tender on behalf of Singareni Collieries Company Limited (SCCL), a government-owned coal mining company, for the engineering, procurement and construction (EPC) of solar PV projects aggregating 150 MW. The projects will be set up on SCCL’s premises. The tender is part of SCCL’s vision to develop 300 MW of solar PV projects in captive mode at its sites. The development of the entire 300 MW of capacity is expected to cost Rs 13,615 million with a debt-equity ratio of 70:30. Banks and foreign investors will provide Rs 9,530 million as debt while the remaining Rs 4,085 million will be raised through internal resources. SCCL has invited expressions of interest from interested parties for funding individual projects. The scope of work includes design, engineering, supply, construction, erection, testing and commissioning of grid-connected solar PV projects. The successful bidders will also be responsible for plant O&M.

ndian Railways has announced a plan to install solar panels on the rooftops of 78 railway stations across Kerala. One such 100 kW solar project is under way at Kannur. It has provided solar panels on a trial basis for the rooftops of 19 narrow gauge and three broad gauge non air-conditioned coaches in service. Solar panels are also going to be installed on half the Northern Railways’ narrow gauge coaches, as well as two intercity trains for Northern and Southern Railway to conduct trials in all weather conditions.

3 HP, 5 HP or 7.5 HP. To be eligible to participate in this tender, bidders must be registered as manufacturers of solar PV cells, modules, motor pump sets, or solar pump inverters. In addition, solar PV system integrators registered with TSREDCO for the year 2018-19 are eligible to submit bids for the tender. The bidders should also have an average turnover of at least Rs 10 million in the past three years and experience of supplying, installing, testing and commissioning at least five solar pump sets under any government programme in the country.

he New and Renewable Energy Development Corporation of Andhra Pradesh has released the results of its 15 MW solar rooftop tender that was rolled out in June 2018. The state agency had set an upper tariff ceiling of Rs 5 per kWh for the tender. CleanMax Enviro Energy Solutions Private Limited has emerged as the lowest (L1) bidder, quoting a tariff of Rs 3.64 per kWh for setting up 3 MW of capacity. Azure Power quoted a tariff of Rs 3.69 per kWh to develop 5 MW of capacity, Rich Phytocare Private Limited quoted Rs 3.98 per kWh to set up 3 MW capacity and TEPSOL Solar Resco Private Limited quoted Rs 3.99 per kWh to develop 4 MW capacity. NREDCAP has asked the other bidders to match the L1 price.

arnataka Renewable Energy Development Limited (KREDL) has issued a tender for the development of 150 MW of grid-connected solar projects at the Pavagada solar park, in Tumkur district of Karnataka. The project will be developed in three blocks of 50 MW each on a BOO basis. The power generated will be procured by Bangalore Electricity Supply Company Limited for a period of 25 years. The upper limit of the tariff has been fixed at Rs 2.93 per kWh and the successful bidder will get 12 months to complete the project. This is part of KREDL’S plan to develop a combined capacity of 2 GW at the Pavagada solar park.

he Punjab government has approved a pilot solar PV project to be developed on agricultural land in the state. While the project will be developed on agricultural land on a rental basis, the farmers will be allowed to cultivate fruits and vegetables on the land. According to the Confederation of Indian Industry (CII), several private solar power developers have expressed interest in setting up projects on farmlands for a minimum lease period of 25 years. Reportedly, the government is hoping to replicate a similar project in the Kandi area and southwest Punjab, particularly in the citrus orchards and vegetable-growing belt near Ludhiana and Malerkotla. Punjab has also approved a green building pilot project on CII’s recommendations, and is planning to implement this concept at the Government Medical College and Hospital in Mohali.

REDL has tendered 200 MW of grid-connected solar PV projects to be developed across 10 talukas of the state. The selected talukas are Mundargi, Gajendragad, Lakshmeshwar, Savanur, Haveri, Kushtagi, Maski, Kuragodu, Gurmatkal and Hanur. Projects of 20 MW capacities will be developed in each taluka on a BOO basis in the open category. A bidder can bid for a minimum and maximum capacity of 20 MW and 200 MW respectively. The project must be commissioned within 18 months of the PPA approval. Bangalore Electricity Supply Company Limited will sign a 25-year PPA with the developers. The bid submission deadline for the projects is September 7, 2018.

elangana State Renewable Energy Development Corporation (TSREDCO) has rolled out a tender for the design, supply, installation and commissioning of solar PV water pumping systems across the state. The tender, supported by the MNRE, has been announced under the Jawaharlal Nehru National Solar Mission off-grid and decentralised solar applications programme. According to TSREDCO, the solar water pumping system can be 12 ● Renewable Watch ● August 2018

PNEDA has retendered 500 MW of grid-connected solar PV projects to be developed in Uttar Pradesh. In January 2018, UPNEDA had tendered projects aggregating 1 GW. However, the tender was cancelled due to high L1 tariff (Rs 3.48 per kWh) quoted by the developers. The ceiling tariff for the new 500 MW tender has been fixed at Rs 3.10 per kWh. The minimum and maximum capacity that a single bidder can bid for has been

NEWS BRIEFS fixed at 5 MW and 500 MW respectively. Further, a single bidder can submit multiple bids for different locations. The project commissioning time frame 21 months for a project with less than 250 MW of capacity, and 24 months for a project more than 250 MW. Of this, the developers will have to achieve financial closure, acquire land and secure connectivity agreements within 12 months. The last date for submitting the bid is August 28, 2018.

a rooftop space of 10,000 square feet will be eligible for this project. The company will provide rooftop systems along with free EV charging facilities for a period of three years. The company has secured several green funds for this project. As per RT Koytango, the EVs can be fully charged within two hours and the initiative could reduce consumers’ electricity bills by about 20 per cent.

adhya Pradesh Urja Vikas Nigam Limited (MPUVNL) has tendered 33 MW of grid-connected rooftop solar PV projects to be developed at 567 sites across the state. The projects, being implemented in partnership with the World Bank, will be developed under Category I and/or III of the Madhya Pradesh Policy for Decentralized Renewable Energy Systems, 2016. Category I of this policy pertains to grid-connected solar PV systems developed on a net metering basis and Category III consists of captive projects with no provision for power export. MPUVNL has conducted pre-identification of suitable locations to reduce project risk. Project developers will be entitled to the subsidy provided by the state and the central government. MPUVNL will compensate the developer in case of a default (either by the developer or a procurer) that could lead to a premature project termination. The successful bidder will be responsible for the O&M services of the projects that will be developed under the RESCO model for a period of 25 years.

SES Yamuna Power Limited (BYPL), a Delhi-based power discom, has signed an agreement with SECI to procure 100 MW of wind power in order to meet its RPO. The power is expected to be available to the discom from the third week of November 2019 for a 25-year period at a tariff of Rs 2.52 per unit. BSES Rajdhani Power Limited and BYPL already have agreements to procure 250 MW and 50 MW of wind power, respectively. With this agreement, the two BSES discoms will receive a total of 400 MW of wind power. The discoms will start receiving 100 MW from November 2018, and the remaining 300 MW will be available from November 2019.

ungrow, a global supplier of inverters and energy storage system solutions, has inaugurated its 3 GW solar inverter manufacturing unit in Bengaluru. The company has invested Rs 360 million in the manufacturing unit, which is spread over an area of 3 acres. The facility was commissioned in six months and will produce string and central inverters of 1 GW and 2 GW capacities respectively. Initially, the facility will only produce the former and then scale up the capacity to 3 GW by manufacturing central inverters and turnkey solutions as well.

T Koytango Private Limited, a subsidiary of Hriman Motors LLP, is planning to set up free electric vehicle (EV) charging stations in New Delhi. Any business, school, college, commercial building, office and factory with a minimum load of 100 kW and

14 ● Renewable Watch ● August 2018

Finance ccording to the World Energy Investment 2018 report by the International Energy Agency, investments in India’s renewable energy sector exceeded those made in fossil-fuel based power projects in 2017. The total investment in renewables accounted for more than one-third of the total power sector investment of $20 billion. As per the report, solar PV investment was more than doubled and onshore wind projects witnessed record spending during the year. The total amount invested in power projects based on coal, gas and oil stood at $16 billion. Reportedly, the investment in new coal power plants fell to its lowest level in 15 years, as the number of financially stressed thermal assets continued to rise. Investment in despatchable renewable power plants based on hydropower, bioenergy and gas remained relatively low and stable. The spending on electricity networks at over 35 per cent of power sector investment continued to remain high.

ES Bank has launched its cleantech accelerator platform “Yes Scale” in association with the MNRE. The accelerator aims to assist start-ups in the fields of energy efficiency, waste management and water management. Yes Scale will provide all affiliated start-ups with access to technology, mentorship, funding and market entry. The affiliated start-ups will also be eligible to receive a pilot grant of up to Rs 2 million. The programme will focus on smart cities, clean energy technologies, agricultural technologies, life sciences and educational technologies, etc.

n its annual general meeting, Tata Power has received approval from its shareholders to raise up to Rs 55 billion by issuing nonconvertible debentures on a private placement basis. Reportedly, the company is planning to borrow this amount over a period of 12 months. The company also announced that its long-term borrowings stood at about Rs 123 billion as of March 31, 2018. During the quarter, the company added 100 MW of renewable capacity and won project bids worth 400 MW.

uzlon has reported a net loss of Rs 5.75 billion in the first quarter of 192018-19, ended June. A shortfall in the working capital facilities, a high interest burden and notional forex losses (due to the depreciating rupee) of approximately Rs 2 billion have been cited as some of the major reasons for the net loss. However, Suzlon has stated that it had delivered 155 MW of wind projects in the same quarter and has a backlog of 1,134 MW worth of projects. ■

NEWS BRIEFS

International News T

he Bangladesh Power Development Board (BPDB) has issued tenders for the development of 200 MW of solar photovoltaic (PV) projects in the country. The capacity will be divided into four packages of 50 MW each and will be set up at the 132/33 kV substations near Chuadanga, Netrokona, Baraiyarhat and Bhaluka districts. The projects will be developed on a build-own operate basis. A single bidder is eligible to bid for all the four packages. BPDB will enter into power purchase agreements (PPAs) with the successful bidders for 20 years. Bidders have been directed to deposit a security amount of $250,000 with the board. The bid submission deadline is August 28, 2018.

he UAE-based clean energy engineering, procurement and construction (EPC) company Enviromena Power Systems has started the construction of solar PV projects in Egypt, Jordan and the UAE with a combined capacity of 509 MW. In Egypt, a PV project of 256 MW capacity is being developed in the Benban area, which will provide clean energy to about 370,000 households and is expected to displace 454,000 tonnes of carbon dioxide annually. After the completion of this project, the Benban area will have 32 power projects with an installed capacity of 1,650 MW.

he Ministry of Environment in South Korea has issued guidelines for solar power installations after the damage caused by a landslide in North Gyeongsang province. Solar panels installed on the mountain slope of the region had slid down due to heavy rainfall caused by typhoon Prapiroon. The new guidelines, which came into effect on August 1, 2018, will prohibit the construction of solar projects in areas that are environmentally protected or prone to natural disasters. The increase in subsidies for renewable energy projects and the South Korean government’s plan to gradually phase out all nuclear power plants have led to an increase in solar power plants in the country. Reportedly, trees are being cut down by negligent developers to install projects, making the ground vulnerable to rainfall. The government has now asked around 28,600 operators to submit status reports of their facilities after thorough inspection.

A Solar Vietnam, a wholly owned subsidiary of Chinese solar manufacturer JA Solar, will receive a long-term buyer credit loan of $68.4 million from China Minsheng Bank Corporation Limited. The 16 ● Renewable Watch ● August 2018

funds will be used to procure equipment for JA Solar Vietnam’s 1.5 GW solar wafer manufacturing facility. The loan will have a sevenyear term and a corporate guarantee has been signed with JA Solar against the loan.

pple is planning to invest $300 million in the China Clean Energy Fund for developing 1 GW of renewable energy capacity over a four-year period. The company has partnered with 10 suppliers: Catcher Technology, Compal Electronics, Corning Incorporated, Golden Arrow, Jabil, Luxshare-ICT, Pegatron, Solvay, Sunway Communication and Wistron to achieve this target. The DSW Group will manage as well as invest in this fund. In addition, Apple is working with its partners to develop new materials and technologies to reduce greenhouse gas emissions.

iemens Gamesa will supply 109 units of its SWT-2.3-108 (2.3 MW each) onshore wind turbines totalling 250 MW to two farms in South Africa. Of this, 140 MW and 110 MW turbines will be supplied to the Kangnas wind farm and Perdekraal East wind farm respectively. The company will provide operations and maintenance (O&M) services for both the projects for 10 years. It will begin supply in 2019 and the project is expected to be commissioned in 2020.

he Korea Power Electric Corporation (KEPKO) has signed a memorandum of cooperation with Power Grid Corporation of India Limited during a bilateral business forum held in New Delhi. The two power utilities will develop energy storage systems, smart grids and electric vehicle charging systems. KEPKO will also help reduce India’s high electric power transmission and distribution losses by employing advanced inspection systems.

lackRock Real Assets’ Global Energy & Power Infrastructure Fund III (GEPIF III) has raised $1.5 billion in commitments from institutional investors in North America, the Middle East, Europe and Asia, subject to certain post-closing conditions. The GEPIF III provides equity investments to develop the energy and power infrastructure value chain in developed countries. The funds will be used for energy infrastructure projects, which would generate current income and long-term capital appreciation, thereby enhancing the organisation’s long-term returns.

aisse de dépôt et placement du Québec (CDPQ), a Canadian long-term institutional investor, will provide CAD 150 million ($114 million) in debt financing to ContourGlobal. The funds will be used to acquire Acciona Energía’s 250 MW portfolio of five 50 MW concentrating solar power (CSP) plants in southwest Spain.

he CDC Group, a development finance institution of the UK government, has partnered with Globeleq to provide $66 million debt investment to the Malindi Solar Group. Financing will be provided over a period of 16 years and will be utilised for the development of a 52 MW solar PV project in southeast Kenya. Globeleq and the Africa Energy Development Corporation will have a 90 per

NEWS BRIEFS cent and 10 per cent share in the project respectively.

he International Company for Water and Power Projects (ACWA Power) has signed an agreement with the Central Energy Fund of South Africa to co-invest in the construction of a 100 MW Redstone CSP project in South Africa’s Northern Cape province. The project will use central salt receiver technology with 12 hours of thermal storage to cumulatively despatch 480 GWh of electrical energy per year and provide power supply to 210,000 households.

he New Development Bank (NDB), an initiative by the BRICS countries, has approved a $300 million loan for sustainable development and clean energy projects in South Africa. The loan will be provided to the Development Bank of Southern Africa without sovereign guarantee and will fund South Africa’s transition from coal-based to clean energy sources. In 2017, NDB had provided a $76 million loan with a maturity period of 17 years to the 100 MW Shanghai Lingang Distributed solar power project.

he Lebanese Centre for Energy Conservation’s (LCEC) expression of interest (EoI) invitation for the development of 300 MW gridconnected solar PV capacity with battery energy storage systems (BESS) has been oversubscribed by 25 times. A total of 75 EoIs have been received from interested developers. Reportedly, almost all submitted EoIs have proposed installing a minimum capacity of 100 MW of solar plus 75 MW of BESS. A detailed discussion will take place at the International Beirut Energy Forum, 2018 to develop the request for proposal documents, followingwhich a detailed call for proposals will be sent to the developers that had submitted EoIs.

öyry, an international consulting and engineering company, has signed a contract with UITM Solar Power Dua Sdn Bhd, a subsidiary of the Universiti Teknologi MARA, to develop a 25 MW solar PV project in Malaysia. The project has been awarded through competitive bidding; however, the value of the order has not yet been disclosed. The project is a part of UITM Solar Power’s endeavour to develop large-scale solar PV plants throughout the ASEAN region.

frican renewable energy company ZOLA Electric has secured a total debt financing of $20 million from SunFunder. A lender of solar-based projects, SunFunder has been supporting Zola Electric’s projects since 2014. It has provided financing to the company twice earlier. This time, SunFunder has provided $5 million to the company and the loan will mature in mid-2021. The amount will be utilised to support ZOLA Electric’s expansion across Africa. Reportedly, through these additional funds, ZOLA could help bring reliable and clean solar power to about 25,000 African citizens.

rax Power has awarded a contract to Siemens for the upgradation of turbines on the former’s three biomass units in the UK. Siemens will upgrade one biomass unit each year and will com-

18 ● Renewable Watch ● August 2018

plete the total work over a three-year period (2019-22) at an estimated cost of £40 million. The upgrades will help improve plant efficiencies, reduce maintenance and cut generation costs.

he Zambian government has launched the country’s renewable energy feed-in-tariff (REFiT) strategy to support sustainable and climate-friendly energy sector development in the country. The REFiT strategy provides a framework for the development of small-and medium-scale renewable energy projects of up to 20 MW capacity with private sector involvement. The strategy is aimed at setting up a cumulative renewable energy capacity of 200 MW over a period of three to five years. This will be divided into 100 MW of solar PV and 100 MW of small hydro capacity.

he French government has approved 103 solar power projects with a total capacity of 720 MW to be set up across the country. The projects will be ground mounted and provide clean electricity to about 100,000 homes annually. The average tariff proposed by the winners in the tender process was Euro 58.2 per MWh, down by 5 per cent compared to the previous tender round in July 2017. The approval comes on the back of France’s plan to add 3,000 MW of solar capacity to the country’s energy mix by 2020. Further, two other tender rounds, each with 850 MW capacity, are expected to be announced soon.

lbania’s Ministry of Infrastructure and Energy has rolled out a competitive bidding tender for the development of a 50 MW solar PV power project in the country. The project will be set up in Akernia, Vlora municipality, which receives high solar irradiation. The selected developers will sign PPAs with the government for a 30-year period, with a provision for extension. Post the PPA signing, the winners will have 18 months for commissioning. Successful developers may also be allowed to increase their plant capacity by 20-50 MW. The last date for bid submission is September 17, 2018.

ngie Fabricom has announced plans to start construction on the 99 MW Kristal solar park in the Flanders region in Belgium in October 2018. The project is expected to be completed within nine months and will start generating power from mid-2019. On its completion, the Kristal solar park will be the largest in the Benelux region, a political-economic union of Belgium, the Netherlands and Luxembourg. The project was awarded through competitive bidding to Engie Fabricom, which will also maintain the park.

iemens Gamesa, a Spain-based wind turbine maker, and Van Oord, Dutch marine contractor, have won a contract worth over Euro 500 million to set up a 380 MW wind farm in the Netherlands. The wind farm will be located near IJsselmeer lake and is expected to power around 380,000 households from mid-2021. Siemens Gamesa will be responsible for the design and supply of 89 wind turbines and O&M of the wind farm for 16 years, whereas Van Oord will deliver foundations and cables for the project. ■

T R E N D S & D E V E LO P M E N T S

Environment of Uncertainty Safeguard duty row adversely impacts solar power development By Dollay Khattar

n July 30, 2018, the Ministry of Finance (MoF) announced the levy of a 25 per cent safeguard duty on solar cells imported from China and Malaysia for the next two years. These duties were imposed to safeguard the interests of domestic manufacturing firms, which lag behind their foreign counterparts offering cheaper products. The decision, which came after a series of consultations, court cases and a detailed submission by the Directorate General of Trade Remedies (DGTR) to the board of secretaries, was challenged in the Orissa High Court, which has put a stay on the ministry’s order. The petition against the imposition of the safeguard duty was filed by Hero Future Energies, ACME Solar, and Vikram Solar. “It has been decided not to insist on the payment of safeguard duty, for the time being,” the Department of Revenue, MoF, said in the notification, citing the stay order. “Till further directions from the board, the said goods, namely solar cells whether or not assembled in modules or panels, would in respect of the said safeguard duty, be assessed provisionally on furnishing of a simple letter of undertaking by the concerned person.” This implies that the latest duty relief is contingent on importers issuing a bond or a letter of undertaking, that is, they will have to pay the import duty if the courts permit. But this is akin to a tax as developers would include the import duty in their tariff calculations if they had to bid for a project today. Following the Orissa High Court order, the Madras High Court has instructed customs officials at the Chennai port to provi20 ● Renewable Watch ● August 2018

sionally release the module shipment of Shapoorji Pallonji Infrastructure Capital without payment of the safeguard duty. However, the court has asked the customs authorities to make a provisional assessment of the safeguard duty payable in the event of the notification being upheld and to ensure that the company furnishes a bond. The Madras High Court was responding to a petition filed by Shapoorji Pallonji to clear its goods without requiring it to pay the safeguard duty. Separately, the Ministry of New and Renewable Energy (MNRE) has written to the MoF requesting that any project already under construction be exempted from the safeguard duty. The ministry has not yet issued any notifications in response to this request. The prolonged indecisiveness on the part of the government has only increased the uncertainty in the solar power segment, which is highly dependent on imported equipment. While the

government is trying to address the industry’s concerns by advising a pass-through of taxation changes in tariffs, this is easier said than done. State and central government entities are highly reluctant to accept higher tariffs. Meanwhile, the sharp depreciation in the rupee has cast a cloud over the Indian solar energy segment. On August 15, 2018, the rupee hit a record low of Rs 70 to the US dollar. In a segment where the difference of just one paise results in winning or losing a project, this sudden currency depreciation is a cause for concern. The items most vulnerable to exchange rate risks are the cells and modules that account for 50-55 per cent of the project cost. For projects that have already been bid out, this implies a negative impact on their estimated costs. It would also adversely impact developers that did not factor in currency risks while calculating tariffs. The import duty ambiguity and the sharp

T R E N D S & D E V E LO P M E N T S depreciation in the rupee could lead to a slowdown in capacity addition. If the current situation continues, the segment’s capacity addition estimates for the next two years will see downward revisions. Already, a majority of the auctions have been cancelled citing higher tariffs, while others are facing delays in the signing of power purchase agreements (PPAs). In light of these developments, it would be interesting to revisit the submissions made by the industry to the DGTR, most of which seem to not be in favour of such duties.

Recap of the industry submissions to the DGTR The DGTR’s recommendation was based on the findings of the safeguard investigation concerning imports of “solar cells whether or not assembled in modules or panels” under the Customs Tariff Act, 1975 and the Custom Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997. However, it became a source of concern for solar power developers, which expect a steep hike in solar power costs if these duties are imposed. This possibility led to discord between domestic manufacturers and developers in the past few months. Various contrasting viewpoints were presented to the DGTR by the relevant industry stakeholders (about 205 parties) prior to and at a public hearing held by the DGTR in June 2018. The domestic manufacturers, represented by the Indian Solar Manufacturers’ Association (ISMA), noted, “India has seen a massive surge in solar imports during the period of investigation. The product under consideration is being imported into India from various countries including China, Malaysia, Singapore and Taiwan. Imports of the product concerned increased from 1,275 MW in 2014-15 to 9,474 MW in 2017-18 (annualised), an increase of over 643 per cent during the last three years. The surge in imports has been at extremely cheap prices, causing serious injury to the domestic industry and threatening its very existence.” The developers’ arguments were com-

pletely different from those of the domestic manufacturers. The Solar Power Developers’ Association (SPDA) submitted, “Discoms who are the ultimate purchasers of solar power have indicated that they would purchase solar power only if the cost is under Rs 3 per kWh. In light of the impending safeguard duties, it will not be commercially feasible for the developers to offer tariffs that are under Rs 3 per kWh, which is ultimately going to affect future bids.” Companies like ACME Solar expressed concern about the domestic manufacturing capabilities and submitted that “domestic manufacturing capabilities of solar photovoltaic modules are very low, around 10 per cent of the total requirement. The remaining can only be met by imports, which lead to developers’ predominant reliance on imports for sourcing solar cells”. Vikram Solar also expressed similar concerns in its submission. “There is a huge gap in the demand and supply of solar modules manufactured by domestic producers. The imposition of a safeguard duty would not only adversely affect developers but also make it impossible to attain the national target as large parts of the 100 GW target have to be catered to through imports. The imposition of the safeguard duty is, therefore, clearly against public interest, which is the guiding principle for imposing safeguard duties. Elaborating on the other adverse effects of safeguard duties, Amplus Solar noted that the “imposition of this duty will make it impossible for the company to supply at the tariff contracted in PPAs with leading global companies. This will shake the investors’ confidence in the Indian policy and regulatory regime and hinder further expansion. The company’s financial distress will result in the loss of jobs for 2,700 people, which is higher than the employment in the domestic cell industry. The impact on employment will be worse in large solar development firms and the engineering, procurement and construction (EPC) industry. Therefore, duties shall be imposed only after the provision of an adequate grace period for domestic solar

State-wise solar capacity for which LoIs have been issued State/Union territory

Capacity (MW)

Andhra Pradesh

750

Gujarat

500

Haryana

165

Jharkhand

1,101

Karnataka

2,010

Madhya Pradesh

899

Maharashtra

660

Odisha

240

Punjab

100

Rajasthan

1,500

Tamil Nadu

1,700

Uttar Pradesh West Bengal CPSUs - Multiple states Total

235 25 103 9,988

EPC industries.”

Findings of the DGTR investigation The various submissions made by industry stakeholders were considered by the DGTR for its assessment. The final findings of the DGTR’s safeguard investigation concerning solar cell imports identified a significant increase in imports over the entire period of investigation. As per the DGTR report, the market share and profitability of the domestic industry have suffered serious impairment due to the increased market share of imports over the period 201415 to 2017-18 (annualised). In fact, 2014-15 saw total imports of 1,275 MW against 170 MW of domestic production. This has risen to 9,833 MW against 842 MW of domestic production as of 2017-18 (annualised). Hence, when imports are calculated as a percentage of domestic production, an increase from 750 per cent in 2014-15 to 1,169 per cent in 2017-18 can be seen. The impact on the domestic industry has been more severe due to the continued low import price of solar cells, which makes imported cells the preferred choice of module suppliers and developers. The DGTR also admitted that the safeguard duty may have an adverse effect on solar power developers and conAugust 2018 ● Renewable Watch ● 21

T R E N D S & D E V E LO P M E N T S

Key events in the safeguard duty investigation December 2017

A petition is filed by the Indian Solar Manufacturers' Association (ISMA) on behalf of domestic manufacturers Mundra Solar PV Limited, Indosolar Limited, Jupiter Solar Power Limited, Websol Energy Systems Limited and Helios Photovoltaic Limited. The petition is filed with the Directorate General of Safeguards seeking the imposition of a safeguard duty on solar cells imported from China, Malaysia, Singapore and Taiwan. These five companies claim that they collectively manufacture more than 50 per cent of the solar cells produced in India.

January 2018

The Directorate General of Safeguards Customs and Central Excise recommends a 70 per cent safeguard duty to be imposed on solar cells imported from China and Malaysia for a period of 200 days.

May 2018

A petition filed by ACME Solar against the levy of 70 per cent provisional safeguard duty is disposed of by the Delhi High Court due to the Standing Committee’s decision to not levy the provisional duty till the investigation is done again for a longer time-frame.

June 2018

A public hearing is held by the DGTR where both manufacturers and developers present their viewpoints in trying to prove their respective cases.

July 2018

After the DGTR’s recommendation for a 25 per cent safeguard duty on imports from China and Malaysia, the SPDA writes to the commerce ministry seeking complete exemption of the safeguard duty for projects currently under development.

August 2018

Orissa High Court puts a stay on the order while Madras High Court instructs custom officials to release shipment without developers paying safeguard duty.

sumers. The duty may lead to an escalation in solar power tariffs, ultimately impacting the attainment of the targeted 100 GW of solar capacity by 2022. However, the DGTR believed that this duty would be in the public interest. In view of these findings, the DGTR recommended a 25 per cent safeguard duty on solar cell imports from China and Malaysia for the first year, followed by a 20 per cent safeguard duty for the first six months of the second year and a 15 per cent duty for the remaining six months of the second year. It also recommended that no safeguard duties be levied on imports from other developing countries as, individually and collectively, they do not account for more than 3 per cent and more than 9 per cent respectively of solar cell imports.

The spillover effect The solar equipment trade dispute is no longer restricted to imported solar cells, but has spilled over to other sub-segments as well. A new dispute seems to be cropping up in the solar glass and ethylene vinyl acetate (EVA) sheet segments, anti-dumping cases for both of which are currently pending. Until the cases are finalised, there will continue to be uncertainty in the market. The anti-dumping petition regarding solar glass was filed by Gujarat Borosil, which claims to be the only producer of solar glass in the country. Meanwhile, in April 2018, the Directorate General of Anti-Dumping and Allied Duties 22 ● Renewable Watch ● August 2018

initiated an investigation into the import of EVA sheets for solar modules imported from China, Malaysia, Saudi Arabia, South Korea and Thailand. This was done in response to a petition filed by Renewsys India Private Limited, which sought the imposition of anti-dumping duty on EVA imports. An oral hearing was scheduled on July 19, 2018, and there has been no further development in this case.

A tough call The back and forth on the safeguard duty on solar cells and the spillover of the trade dispute to other equipment have left the segment in a state of flux. There are over 10 GW of solar projects for which letters of intent (LoIs) have been issued or signed as of July 2018. The ambiguity surrounding the import duty structure will impact the cost of these projects. In a recent report, credit rating and research agency ICRA said that this 25 per cent duty would result in an increase in the capital cost of solar power projects by 15 per cent, which, in turn, would result in an increase in tariff by 30-35 paise per unit to maintain a similar level of return for project developers. The imposition of duties will also delay the construction and commissioning of existing projects. As far as the ongoing tenders are concerned, most of them are already stranded. The need of the hour is a holistic policy, wherein capacity addition measures and domestic manufacturing promotion go hand in hand. Many industry

analysts doubt if the proposed safeguard duty will actually help in achieving the objective of promoting domestic manufacturers as it is also applicable on manufacturing facilities in special economic zones, where a majority of the local capacities are situated. Further, the two-year duration of the safeguard duty is seen to be too short a time for the local manufacturing sector to gain a firm foothold. Indian solar manufacturing has been plagued by a lack of scale, outdated machinery and the lack of depth in terms of backward integration. Overcoming these challenges within two years seems unlikely and will only adversely impact costs and capacity addition. When making a final decision, the government will have to assess external factors as well, the key among these being a slowdown in capacity additions in China, which is expected to drive down the prices of solar modules. With large capacity addition targets, India can be a key beneficiary of this fall. As a percentage of EPC costs, module costs in India are one of the highest in the world. But the safeguard duty will temper the benefit of the steep drop in global module prices in the country. In light of the national solar target being impacted by the safeguard duty, it will be a tough call for the government to go ahead with its decision to impose the proposed safeguard duty. On the other hand, if it withdraws the duty, it will mean walking away from the Make in India mission. ■

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T R E N D S & D E V E LO P M E N T S

Reducing Deviations Strict forecasting and scheduling of renewables to ensure grid stability By Anukriti

ith the large-scale integration of wind-and solar-based generating stations, managing the national and regional grids could be a daunting task for the state load despatch centres (SLDCs). Unless steps for managing variable renewable integration into the grid are initiated, issues such as poor grid management, inefficient load generation balancing, lack of grid security and instability are likely to persist across all renewable-rich states. Effective management of renewable energy is only possible when grid operators have visibility into the amount of renewable energy expected to be injected into the grid on a day-to-day basis. To this end, the forecasting and scheduling of renewable energy is critical to anticipate the balancing requirements and procure adequate reserves for maintaining grid reliability. Special provisions also need to be in place to ensure that renewable energy generators are not unduly penalised for an unexpected loss in generation due to fluctuating weather conditions. To this end, most states have acknowledged the need to frame regulations on forecasting, scheduling and deviation settlement for grid-connected solar and wind power projects.

Scheduling generation Since renewable energy power purchase agreements (PPAs) have a single-part tariff structure, there is no incentive for generators to invest in forecasting and scheduling. Moreover, renewable energy has a “must-run” status, which prevents discoms from curtailing energy generated from renewable sources. This is why solar and wind project developers have not been 24 ● Renewable Watch ● August 2018

Deviation Settlement for ISTS Connected Projects Under -injection

30% Rs 1.5/kWh

20% Rs 1/kWh

Over-injection

10% Rs 0.5/kWh

No Charge

10% Rs 0.5/kWh

20% Rs 1/kWh

30% Rs 1.5/kWh

The charges fixed here are linked to the tariffs set by CERC in the framework as Rs 5/kWh for solar and Rs 7/kWh for wind energy projects .

forthcoming in adopting accurate forecasting technologies. As a result, SLDCs continue to face problems in scheduling power and accordingly, balancing the generation with load. To resolve this issue, in October 2015, the Forum of Regulators (FoR) published model regulations regarding the deviation settlement mechanism (DSM) to be adopted by states for renewable energy plants. The regulations recommend that all renewable energy generators should forecast and submit their generation schedule on a day-ahead basis, either independently or through a qualified coordinating agency, which will form the basis for commercial settlement. As per the FoR, the fixed deviation rates should be based on error percentages. The DSM regulations define “absolute error” as the difference between the actual injection of wind and solar energy with reference to the scheduled generation and the available capacity. This error is calculated over a 15-minute time block. Different tolerance bands for errors or deviations have been provided in the model regulations for existing and new renewable energy generators. For interstate transmission system-connected projects, the Central Electricity Regulatory Commission (CERC) has allowed a 15 per cent tolerance band (positive and negative) wherein no charges will be

levied for renewable energy developers. The deviation charges would be 10 per cent, 20 per cent and 30 per cent of the PPA rate for absolute errors of 15-25 per cent, 25-35 per cent, and more than 35 per cent respectively.

State initiatives The guidelines and regulations issued by the CERC have helped increase awareness among the states on the grid balancing challenges arising from renewables’ integration, and played a major role in guiding state agencies to introduce their own regulations. The first DSM regulation announced by the CERC in 2014 was instrumental in defining a market mechanism to hold generation companies accountable for their power supply commitments. Since then, the CERC has brought in three amendments and a fourth draft amendment. States that already have significant wind and solar installations, such as Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Rajasthan, Gujarat and Madhya Pradesh, have released DSM regulations. Emerging solar states such as Uttar Pradesh, Punjab, Haryana, Assam, Chhattisgarh, Jharkhand, Uttarakhand, Odisha and Manipur have also rolled out their regulations. These largely follow the CERC guidelines, with some minor changes. The primary objective of all the regulations remains the same – mandating the forecasting of renewable energy by genera-

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T R E N D S & D E V E LO P M E N T S

Deviation charges for under or over injection of wind and solar power, and selling of power within the state Assam, Tamil Nadu, Haryana, Punjab Absolute error in the 15-minute time block <= 10% >10% but <=20% >20% but <=30%

Deviation charges payable to the state DSM pool None At Re 0.50 per unit for shortfall or excess energy for absolute error beyond 10% and up to 20% At Re 0.50 per unit for shortfall or excess energy beyond 10% and up to 20% + Re 1 per unit for balance energy beyond 20% and up to 30% >30% At Re 0.50 per unit for shortfall or excess energy beyond 10% and up to 20% + Re 1 per unit for shortfall or excess energy beyond 20% and up to 30% + Rs 1.50 per unit for balance energy beyond 30% Andhra Pradesh, Maharashtra, Telangana, Rajasthan, Uttar Pradesh, Jharkhand Absolute error in the 15-minute time block Deviation charges payable to the state DSM pool <=15% None >15% but =<25% At Re 0.50 per unit for shortfall or excess energy for absolute error beyond 15% and up to 25% >25% but =<35% At Re 0.50 per unit for shortfall or excess energy beyond 15% and up to 25% + Re 1 per unit for balance energy beyond 25% and up to 35% >35% At Re 0.50 per unit for shortfall or excess energy beyond 15% and up to 25% + Re 1 per unit for the shortfall or excess energy beyond 25% and up to 35% + Rs 1.50 per unit for balance energy beyond 35% Gujarat Absolute error in the 15-minute time block Deviation charges payable to the state DSM pool Wind power projects commissioned prior to January 30, 2010 <= 12% None >12% but <=20% At Re 0.35 per unit for shortfall or excess energy for absolute error beyond 12% and up to 20% >20% but <=28% At Re 0.35 per unit for shortfall or excess energy beyond 12% and upto 20% + Re 0.70 per unit for balance energy beyond 20% and up to 28% >28% At Re 0.35 per unit for the shortfall or excess energy beyond 12% and up to 20% + Re 0.70 per unit for shortfall or excess energy beyond 20% and up to 28% + Re 1.05 per unit for balance energy beyond 28% Wind power projects commissioned on or after January 30, 2010 <= 8% None >8% but <=16% At Re 0.35 per unit for the shortfall or excess energy for absolute error beyond 8% and up to 16% >16% but <=24% At Re 0.35 per unit for shortfall or excess energy beyond 8% and up to 16% + Re 0.70 per unit for balance energy beyond 16% and up to 24% >24% At Re 0.35 per unit for shortfall or excess energy beyond 8% and up to 16% + Re 0.70 per unit for shortfall or excess energy beyond 16% and up to 24% + Rs 1.05 per unit for balance energy beyond 24% Solar power projects <=7% None >7% but <=15% At Re 0.60 per unit for shortfall or excess energy for absolute error beyond 7% and up to 15% >15% but <=23% At Re 0.60 per unit for shortfall or excess energy beyond 7% and up to 15% + Rs 1.20 per unit for balance energy beyond 15% and up to 23% >23% At Re 0.60 per unit for shortfall or excess energy beyond 7% and up to 15% + Rs 1.20 per unit for shortfall or excess energy beyond 15% and up to 23% + Rs 1.80 per unit for balance energy beyond 23% Source: Renewable Watch Research, State Electricity Regulatory Commissions

tors and penalising them for any deviations from the promised schedules.

Conclusion The objective of the DSM is to facilitate large-scale grid integration of solar and wind generating stations while maintaining grid stability and security through strict forecasting and scheduling, with minimum deviation. With renewables becoming a mainstream source of generation, the central and state governments are 26 ● Renewable Watch ● August 2018

making concerted efforts to ensure parity between conventional and renewable energy generators in terms of accountability. This is supported by the CERC’s fourth amendment (draft) for DSM regulations, which suggests significant changes to the current penalty mechanism. The operational frequency band for all generators has been narrowed to 49.85-50.05 Hz from the earlier band of 49.70-50.10 Hz. The CERC has also linked the deviation penalties to the day-ahead market

prices. Further, in January 2018, the FoR suggested implementing a shorter despatch and settlement period of five minutes instead of the current time block of 15 minutes. Going forward, advanced methods of forecasting and scheduling of renewables will become essential for reducing the requirement of reserves, improving price discovery and increasing flexibility in electricity generation and transmission. ■

T R E N D S & D E V E LO P M E N T S

Discom Ratings Gujarat leads for the sixth consecutive year By Swarna Kesavan

ower distribution remains a weak link in the sector’s value chain. This is evident from the latest discom ratings released in July 2018 by the Ministry of Power (MoP) and the Power Finance Corporation in collaboration with ICRA and CARE. Under the latest exercise, eight discoms witnessed a decline in their ratings from the previous edition while only seven discoms saw an improvement. This is despite the support extended to the sector under various government schemes, such as the Ujwal Discom Assurance Yojana (UDAY) the Deendayal Upadhyaya Gram Jyoti Yojana, the Integrated Power Development Scheme and the Pradhan Mantri Sahaj Bijli Har Ghar Yojana, for bringing about improvement in the technical, operational, financial and managerial areas of utilities. The MoP comes out with discom ratings to incentivise discoms to improve their operational and financial performance, facilitate realistic assessment by banks and financial institutions (FIs) of the risks associated with lending exposure to various discoms, and serve as a basis to provide central government assistance to them.

The State Distribution Utilities Sixth Annual Integrated Rating report excludes power departments and private discoms. Renewable Watch presents the key highlights of the recent rating report…

Key features z

The latest ratings are for financial year 2016-17 and cover 41 distribution utilities. Based on its review of the integrated rating methodology, the MoP approved certain modifications in November 2017, and a revised method was developed for the calculation of aggregate technical and commercial (AT&C)

28 ● Renewable Watch ● August 2018

losses, and parameters such as digital payments and access to supply. The latest ratings have been carried out as per the revised methodology. The key parameters based on which ratings have been assigned include operational and reform parameters, financial performance, and external factors like regulatory environment and government support. The operational and reform parameters carry the maximum weightage of 52 per cent. These include AT&C losses, power purchase, cost efficiency, service quality and digital payment facility, access to supply, and renewable purchase obligation compliance. These are followed by financial parameters (33 per cent), such as cost coverage ratio, payables, receivables and timely submission of audited accounts, and external parameters (15 per cent). Non-compliance with certain parameters carried negative scores. These include unavailability of audited accounts (up to minus 12 per cent), non-filing of the tariff petition (up to minus 5 per cent), untreated revenue gap (up to minus 5 per cent), increase in AT&C losses (up to minus 4 per cent), non-formation of state transcos (minus 3 per cent), presence of regulatory assets for over three years and non-allowance of carrying costs by the regulator (up to minus 3 per cent), lack of true-up order, non-implementation of automatic pass-through of fuel costs and return on equity norms prescribed by the Central Electricity Regulatory Commission (each up to minus 1 per cent), default to banks/FIs (up to minus 2 per cent) and non-provision of employee-related liabilities or statutory dues in the accounts (up to minus 1 per cent). Based on the above parameters, ratings

have been categorised into six grades ranging from A+ to C. The top five utilities with a rating of A+ are the four Gujarat discoms – Uttar Gujarat Vij Company Limited, Dakshin Gujarat Vij Company Limited, Madhya Gujarat Vij Company Limited and Paschim Gujarat Vij Company Limited (PGVCL) – and Uttarakhand Power Corporation Limited. Significantly, Gujarat discoms have retained their leadership position for the sixth consecutive year. The two discoms with a rating of A are Eastern Power Distribution Company of Andhra Pradesh Limited and Bangalore Electricity Supply Company Limited. Meanwhile, 13 discoms have been assigned a rating of B+, which indicates moderate financial and operational capability. Notably, the ratings of Maharashtra State Electricity Distribution Company Limited and Punjab State Power Corporation Limited slid from A to B+. The remaining 21 discoms have received a rating of either B (11 discoms), C+ (2 discoms) or C (8 discoms). Thus, half the discoms under study have either below average or low operational and financial capability. The discoms with the lowest rating are Jharkhand Bijli Vitran Nigam Limited, the four discoms of Uttar Pradesh, and the discoms of Meghalaya, Manipur and Tripura.

Key findings z

Most discoms were not able to recover costs owing to non-cost-reflective tariffs and a substantial increase in expenses. This is indicated by the cost coverage ratio, which remained below 0.9 for most entities (25 out of 41 rated discoms, or 61 per cent). The median cost coverage during 201617 improved marginally to 0.89 from 0.87 in 2015-16 and 0.85 in 2014-15. Gujarat discoms and Kanpur Electricity Supply Company Limited (KESCO) were the best performers in terms of cost coverage. Overall, only 13 of the 39 discoms (for which data was available for median calculation) showed improvement in their cost ratios, with six of them witness-

T R E N D S & D E V E LO P M E N T S

Grades assigned to discoms Discom Uttar Gujarat Vij Company Limited Dakshin Gujarat Vij Company Limited Madhya Gujarat Vij Company Limited Uttarakhand Power Corporation Limited Paschim Gujarat Vij Company Limited Eastern Power Distribution Company of AP Limited Bangalore Electricity Supply Company Limited Himachal Pradesh State Electricity Board Limited Southern Power Distribution Company of AP Limited Uttar Haryana Bijli Vitran Nigam Limited Punjab State Power Corporation Limited Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited Dakshin Haryana Bijli Vitran Nigam Limited Mangalore Electricity Supply Company Limited Southern Power Distribution Company of Telangana Limited Northern Power Distribution Company of Telangana Limited Gulbarga Electricity Supply Company Limited North Bihar Power Distribution Company Limited West Bengal State Electricity Distribution Company Limited Maharashtra State Electricity Distribution Company Limited Chamundeshwari Electricity Supply Corporation Limited Assam Power Distribution Company Limited Kerala State Electricity Board Limited Kanpur Electricity Supply Company Limited Ajmer Vidyut Vitran Nigam Limited Jodhpur Vidyut Vitran Nigam Limited Jaipur Vidyut Vitran Nigam Limited Tamil Nadu Generation and Distribution Corporation Limited Hubli Electricity Supply Company Limited South Bihar Power Distribution Company Limited Chhattisgarh State Power Distribution Company Limited Madhya Pradesh Poorv Kshetra Vidyut Vitran Company Limited Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Limited Jharkhand State Electricity Board Paschimanchal Vidyut Vitran Nigam Limited Meghalaya Power Distribution Corporation Limited Madhyanchal Vidyut Vitran Nigam Limited Purvanchal Vidyut Vitran Nigam Limited Dakshinanchal Vidyut Vitran Nigam Limited Manipur State Power Distribution Company Limited Tripura State Electricity Corporation Limited

Rating agency ICRA ICRA ICRA CARE ICRA CARE ICRA CARE CARE CARE CARE CARE CARE

Grade A+ A+ A+ A+ A+ A A B+ B+ B+ B+ B+ B+

ICRA CARE CARE ICRA ICRA ICRA ICRA ICRA ICRA CARE ICRA CARE CARE CARE ICRA ICRA ICRA CARE CARE CARE CARE ICRA CARE ICRA ICRA ICRA CARE CARE

B+ B+ B+ B+ B+ B+ B+ B B B B B B B B B B B C+ C+ C C C C C C C C

Source: State Power Distribution Utilities Sixth Integrated Rating report

ing an improvement of over 10 per cent. On the other hand, six witnessed a fall of over 10 per cent. Five discoms recorded an improvement of over 15 per cent – West Bengal State Electricity Distribution Company Limited, KESCO, Gulbarga Electric Supply Company Limited, Ajmer Vidyut Vitran

30 ● Renewable Watch ● August 2018

Nigam Limited and Jaipur Vidyut Vitran Nigam Limited (JVVNL). In terms of AT&C losses, 19 discoms or 46 per cent of the discoms showed an improvement during 2016-17 over 2015-16. The median loss level has declined consistently over the past six years to reach 21.8 per cent from 24.2

per cent, 24.82 per cent, 25.08 per cent, 26.19 per cent and 26.55 per cent in the previous five years. Overall, a dozen discoms (29 per cent) recorded AT&C losses of less than 15 per cent. The nine discoms that reduced AT&C losses by more than 10 per cent are Assam Power Distribution Company Limited, Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Limited, PGVCL, Hubli Electricity Supply Company Limited, Jodhpur Vidyut Vitran Nigam Limited, Dakshin Haryana Bijli Vitran Nigam Limited, Chhattisgarh State Power Distribution Company Limited, JVVNL and Meghalaya Power Distribution Corporation Limited. The six utilities that recorded a deterioration of over 10 per cent in this parameter are Southern Power Distribution Company of Andhra Pradesh Limited, Himachal Pradesh State Electricity Board Limited, Mangalore Electricity Supply Company Limited, Chamundeshwari Electricity Supply Corporation Limited, Maharashtra State Electricity Distribution Company Limited, Madhya Pradesh Poorv Kshetra Vidyut Vitran Company Limited. In terms of the regulatory environment, tariff orders were not issued for four utilities for 2017-18 (as compared to eight in the previous fiscal) across the states of West Bengal, Tamil Nadu, Jharkhand and Tripura. According to the previous edition, tariff orders were not issued for the utilities in Kerala, Rajasthan, Tamil Nadu, Assam, Jharkhand and Tripura. Only 13 utilities filed their tariff petition for 2018-19 in time during the current rating exercise. The corresponding numbers were 14, 12, 15, 21 and 7 in the previous rating exercises respectively.

The report notes that most of the utilities have shown greater cooperation in terms of submitting information and facilitating discussions. This indicates that the discoms are open to transparency. Like in the past, the latest discom ratings are a mixed bag with varied performances. While some discoms are making steady progress, there is much left to be achieved in terms of overall segment performance. ■

T R E N D S & D E V E LO P M E N T S

Green Buildings Towards a more energy efficient future By Anita Khuller

ndia is expected to add 40 billion m2 of new buildings by 2050. A third of the country’s total energy consumption comes from buildings, according to the 2016 annual energy statistics published by the Ministry of Statistics and Programme Implementation. NITI Aayog estimates that energy demand from India’s buildings will increase by more than 800 per cent in 2047, as compared to 2012. In the current scenario, the country will face higher energy costs and skyrocketing consumption for decades to come. Therefore, India needs better building efficiency policies and programmes in the present. India took an important step forward by launching the revised Energy Conservation Building Code (ECBC), 2017. Developed by the Ministry of Power and the Bureau of Energy Efficiency, the code prescribes energy performance standards for new commercial buildings to reduce energy consumption and promote low-carbon growth. It sets parameters for builders, designers and architects to integrate renewable sources into building design, with the goal of achieving a 50 per cent reduction in energy use by 2030. Without building energy policies, building energy use in the state of Gujarat would grow by 15 times in commercial buildings and four times in urban residential buildings between 2010 and 2050. The ECBC, however, improves energy efficiency in commercial buildings and has the potential to reduce building electricity use in Gujarat by 20 per cent by 2050. Besides, having energy codes for both commercial and residential buildings could result in an addi32 ● Renewable Watch ● August 2018

tional 10 per cent saving in electricity use.

Global scenario As per the World Business Council for Sustainable Development (WBCSD), globally, buildings consume more than a third of the total end-use energy and cause a fifth of the total greenhouse gas (GHG) emissions. To reduce energy use in buildings is a climate change imperative and also a sizeable business opportunity. The Energy Efficiency in Buildings (EEB) project by WBCSD was created with the hope that “projected energy use in buildings in 2030 can be reduced by 50 per cent using today’s best practices and technologies, through actions that offer favourable economic returns”. The EEB developed a vehicle for the private sector enabling it to engage with local governments to work together on ensuring that the right policies, funding mechanisms, capacity building programmes and public awareness are established to maximise the market growth of energy efficient buildings. Following active engagements in 12 cities (including Jaipur), from 2018 onwards, the WBCSD will work to provide other partners and stakeholders with the project’s methodology and lessons learnt, and will continue to support the local EEB platforms in their mission.

Infosys SDB 3, Mangalore

For example, Jaipur has significant energy saving potential. Its growing population will generate demand for approximately 650,000 new residential units. The EEB work in Jaipur focused on new construction in offices, malls, and the hospitality and residential sectors to create awareness on the benefits of EEB, workforce capacity, financing, and policy and regulation. The Jaipur Energy Efficiency Network was launched in June 2016 with a collective representation from over 40 companies.

Case study As part of the EEB project, an EEB toolkit was developed and launched in 2015 as a practical guide for organisations to plan and initiate energy efficiency programmes for their buildings. A case study is from Infosys. Ramadas Kamath, executive vice-president and head, administration, facilities, infrastructure and security and sustainability, describes the procedure followed by them: z The first and most important step was to meter the energy consumption in buildings across all the campuses. z Energy meters were installed in every building and every chiller plant and the energy team was able to monitor building-wise energy consumption. z The employee count was noted from the swipe data of employees when they entered the campus. z The per capita energy consumption for Infosys was then calculated. z At the same time, the energy data from the energy meters was matched with the energy bills paid monthly by Infosys. z A central energy dashboard was created to ensure the accuracy of the energy data, and consolidate energy and employee data for all locations. z In 2007-08, these numbers were the first calculation of normalised energy data for Infosys buildings, and became the baseline for comparison. z 2007-08: The per capita energy consumption of Infosys was 297 kWh per employee per month, and their office building energy consumption was an average of 200 kWh per square metre per year. z 2014-15: The per capita energy consum-

T R E N D S & D E V E LO P M E N T S data for buildings is a basic requirement for creating the necessary baselines.

New design and performance benchmarks Performance metric Total building energy consumption (EPI) Lighting design Air-conditioning design (reduction in heat load) Total building electrical design

Infosys design: 2007-08 200 kWh per m2 per year 1.2 W per sq ft 350 sq ft per TR

Infosys new design 80 kWh per m2 per year 0.48 W per sq ft 750 sq ft per TR

Per cent improvement 60 60 53

6.5 W per sq ft

3.5 W per sq ft

EPI: Energy Performance Index

ption of Infosys was 159 kWh per employee per month, and their office building energy consumption was an average of 80 kWh per square metre per year. Accurate metering helped them identify buildings with the highest energy consumption and the highest potential for energy savings. A detailed energy audit was conducted for a few buildings, which consisted of the assessment of air-conditioning systems – measuring efficiencies of chillers, pumps, cooling towers, air-handling units, and optimising operational and maintenance parameters. It also entailed a lighting system assessment. The audit highlighted a great potential for improvement by changing system design and replacing equipment like chillers, pumps and fans. An estimate of cost versus energy reduction was calculated and presented to the management. Once the verified savings were observed, it helped to make the senior management confident in investing in similar efficiency measures in all buildings across Infosys locations. Thus, they started one of the biggest retrofit programmes in the commercial building industry.

Infosys SDB 3, Mangalore All Infosys buildings built after 2007 are green buildings, with most of them being LEED platinum/GRIHA (the Indian building rating scheme) 5-star-rated buildings. All the new buildings have a low Energy Performance Index (EPI) due to highly efficient building design. This has been achieved through optimal building orientation; efficient building envelope; highly efficient lighting; heating and cooling systems; maximum daylight utilisation; using green innovative technologies; and more important34 ● Renewable Watch ● August 2018

ly, monitoring their energy consumption at a granular level, which helps eliminate wastage and reduce consumption. Today, Infosys has 14 buildings with LEED Platinum and four buildings with GRIHA 5-star rating. This covers a total of about 5.25 million square feet of built-up area with the highest level of green certification. Between 2008 and 2015, Infosys reduced the average per capita energy consumption across its campuses by 46 per cent, leading to $100 million worth of electricity bills being avoided. Besides drastically reducing per capita energy consumption and avoiding usage of about 890 million kWh, Infosys has reduced its average energy consumption in new buildings to 80 kWh per square metre of floor space per year. The construction cost for energy efficient new buildings was no higher than before and the average return on investment for retrofit projects was less than three years.

Issues and challenges Buildings that meet the requirements of the ECBC are between 17 and 42 per cent more efficient than conventional ones, offering enormous potential for energy savings. A parallel effort on a code for new residential construction is also under way. However, for maximum efficiency, the new code must be made mandatory and built into the by-laws of municipalities. But the code must first be adopted by the states, and then implemented by local bodies, which is an immensely slow process. The government also needs to incorporate efficiency considerations into construction and procurement guidelines and establish benchmarks for building energy use. To do that, it will need data. Transparent, accurate, reliable and accessible electricity use

Builders, buyers and investors in India often lack adequate access to information on energy performance data and certification. Developers are not always aware that energy performance-certified buildings enjoy higher property values and faster leasing, often at a premium, according to a report by the Natural Resources Defense Council. Similarly, buyers do not hear about benefits such as easier maintenance, lower energy costs, and better ventilation and insulation in hot climates. Certifying and labelling buildings based on their energy use would build trust in tenants and buyers, and stimulate the market for efficient buildings. India also currently lacks facilities for testing, standardising and certifying for efficient building materials, which discourages innovation and advances in the energy efficiency space. The lax enforcement of building codes combined with low demand for energy efficient building technology has also dampened India’s market for insulation products, wall materials, fenestration products and shading devices. At present, no more than 30 energy service companies exist to help implement energy efficiency projects, and access to financing is a major challenge for them. Creating lending priorities and financing instruments that encourage energy efficient construction can address this problem. Furthermore, building energy efficient structures requires skilled craftspeople; unfortunately most companies have little incentive to train such workers.

Conclusion As per the Indian Green Building Council, from 20,000 sq. ft of green space in 2003, India has crossed the 5 billion square feet mark of green building footprint in 2018. This proves that by focusing on the opportunities at hand, India can significantly transform the building efficiency landscape and meet its emission reduction goals. ■ With inputs from the World Resources Institute and WBCSD

T R E N D S & D E V E LO P M E N T S

From Biogas to Bio-CNG Growing interest in new environment-friendly fuel alternative By Khushboo Goyal

iogas is a mixture of different gases produced by the breakdown of agricultural waste, manure, municipal waste, plant material, sewage, green waste, or food waste, in the absence of oxygen. When this mixture is further purified and processed, it is called bio-compressed natural gas (bio-CNG). It is similar to natural gas in terms of its composition and properties, and is a cleaner alternative to fuels such as petrol and diesel.

Apart from replacing CNG and LPG, bioCNG can be used in lieu of biogas, which has an estimated market potential of 1,281 MW. For instance, distilleries, and sugar and starch factories meet about 75 per cent of their energy needs through biogas, and thus could be the potential consumers of bio-CNG as well. Other industries like milk processing, pulp and paper, and slaughterhouses could also utilise bio-CNG to meet their energy needs.

Bio-CNG is produced from biogas, through a simple and convenient process involving desulphurisation, upgradation and compression. First, biogas is desulphurised if the hydrogen sulphide content is over 1,500 ppm. Then, the desulphurised biogas is upgraded to make its com36 â&#x2014;? Renewable Watch â&#x2014;? August 2018

Bio-CNG contains about 92-98 per cent methane and only 2-8 per cent carbon dioxide, while biogas contains 55-65 per cent methane with 35-45 per cent carbon dioxide. The calorific value of bio-CNG is about 52,000 kilojoules (kJ) per kg, which is nearly 167 per cent higher than that of

biogas at 19,500 kJ per kg. The high methane content and calorific value combined with the low quantity of moisture, hydrogen sulphide and impurities makes bio-CNG an ideal fuel for automobiles and power generation. The low emission levels of bio-CNG also make it a more environment-friendly fuel than biogas.

Bio-CNG uptake in India As per Renewable Watch Research, there

State-wise installed bio-CNG capacity (as of February 2018) 18,000 16,000

6 Capacity

No. of plants 5

14,000 12,000

4 3

10,000

3 8,000 2

2 6,000

2 1

4,000

1 1

2,000 0

16,659

12,538

5,460

4,024

2,050

2,000

1,847

1,200

400

Maharashtra

Gujarat

Uttarakhand

Rajasthan

Haryana

Uttar Pradesh

Punjab

Madhya Pradesh

Tamil Nadu

Sources: Lok Sabha question dated March 15, 2018, answered by the MNRE; Renewable Watch Research

No.

From biogas to bio-CNG

position similar to CNG, followed by the compression and bottling of the resulting bio-CNG.

Kg per day

In India, bio-CNG has immense scope, specifically as a replacement for the more widely used CNG and liquefied petroleum gas (LPG). Besides, bio-CNG can cater to diverse segments of the market with applications in commercial (hotels, canteens, bakeries and resorts), industrial (glass and ceramic, metal processes, cement and textiles) and automotive (public transport and private vehicles) processes.

T R E N D S & D E V E LO P M E N T S are 17 bio-CNG plants in the country, aggregating a capacity of 46,178 kg per day. Most of these plants are located in the western and northern regions of the country, which account for approximately 96.5 per cent of the bio-CNG capacity. These plants are spread over nine states, of which Maharashtra is in the lead in terms of the largest capacity as well as the highest number of plants. Gujarat comes second in terms of capacity, while Rajasthan ranks second in terms of the number of bio-CNG plants. In fact, Maharashtra and Gujarat together account for 63 per cent of the country’s total installed bioCNG capacity. In addition to these 17 plants, the National Agricultural Cooperative Marketing Federation of India is planning to develop a bio-CNG facility near Azad Mandi in New Delhi, with Indraprastha Gas Limited (IGL) poised to procure the bio-CNG produced at this plant. In January 2018, the Punjab Bureau of Industrial Promotion and Punjab Energy Development Agency signed an MoU with Indian Oil Corporation Limited (IOCL) for setting up biogas and bio-CNG projects in the state, at a total investment of Rs 50 billion. The state government plans to scale these up to 400 units over the course of the next few years. The Ministry of Petroleum and Natural Gas is also planning to set up bioCNG plants across the country at a cost of Rs 70 billion, through partnerships with IOCL, Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited and GAIL (India) Limited.

Key challenges and outlook The installation costs of bio-CNG plants, along with the segregation and processing costs of waste, are considerable, which can limit their adoption. The lack of skilled professionals is also a major constraint at the moment, which will get bigger in the future unless skill development in the country keeps pace with the technological advancements. Further, there are no set standards for the waste-to-energy (WtE) segment, which is also hindering the largescale uptake of bio-CNG in the country. 38 ● Renewable Watch ● August 2018

Key operational bio-CNG plants Developer

Location

Spectrum Renewable Energy Limited

Kodoli, Maharashtra

8,000

Green Elephant India Private Limited

Kissanveer Sahkari Sugar Mill, Satara, Maharashtra

7,290

Bharat Biogas Energy Limited

Ahmedabad, Gujarat

Amul

Vadodara, Gujarat

Brajdham Power Private Limited

Delawas, Rajasthan

3,000

Chennai, Tamil Nadu

400

Mahindra Research Valley and Mahindra World City Developers Limited

Capacity (kg/day)

6,538 ~6,000

Sources: MNRE; Renewable Watch Research

Case study: Mahindra World City, Chennai The Mahindra World City (MWC) bio-CNG plant located in Chennai is a joint initiative of Mahindra Research Valley and Mahindra World City Developers Limited. Set up to create a carbon-neutral ecosystem, MWC is India’s first food-waste-free city. Key features of the project: MWC’s bio-CNG plant was developed to power the Mahindra Group’s vehicles and meet the electrification needs of the city. Built at a cost of $16.9 billion in January 2016, the plant is spread across an area of 1,000 square metres, and has the capacity to convert 10 tonnes of food and kitchen waste generated daily into 1,000 cubic metres of raw biogas. This biogas can further yield 400 kg of purified bio-CNG per day, which is capable of running a Mahindra Tourister bus for 2,800 km. The plant also produces 4 tonnes of organic fertiliser as a by-product per day. Bio-CNG usage: Automobiles such as free shuttle service buses and tractors involved in the waste collection process are powered by the bio-CNG produced at the plant. These vehicles cumulatively cover an average distance of 5,400 km per month. Bio-CNG is also used as a fuel for heating and cooking purposes, even replacing LPG for cooking. Generators that run on biogas produced at the MWC plant are used to power street lights in the city and to operate the biogas plant equipment. Farmers use the organic fertiliser, a by-product of the bio-CNG generation process, to enhance soil fertility and improve crop yield. Source: MWC

However, in the near future, the large amounts of waste generated in the urban and rural areas, combined with government initiatives to tackle this waste, will drive the growth of bio-CNG in India. To this end, the Ministry of New and Renewable Energy (MNRE) is providing financial support for the research and development of all WtE plants, including bioCNG. A capital subsidy of Rs 10 million is offered per MW of power or per unit of

The MoPNG is also planning to set up bioCNG plants across the country at a cost of Rs 70 billion.

bio-CNG from 12,000 cubic metres of biogas in a day, with a maximum cap of Rs 50 million per project. In addition to this, the Galvanising Organic Bio-Agro Resources Dhan (GOBARDHAN) scheme, aimed at the management and conversion of cattle dung and solid waste into compost, fertiliser, biogas and bio-CNG, was announced in the Union Budget 2018-19 and is to be launched soon. From April 2020, stricter Bharat Stage-VI standards will also be rolled out to scale down sulphur emissions. These standards will increase the costs of petrol and diesel, thereby making CNG more cost efficient for trucks and buses. Given the huge amounts of waste generated in the country, bio-CNG will certainly emerge as a more feasible option than CNG. ■

T R E N D S & D E V E LO P M E N T S

Call for Attention SHIP holds immense potential but lacks policy push By Ashay Abbhi

he growth of solar thermal has been restricted as compared to the solar photovoltaic (PV) technology due to factors such as low off-take, no incentives and lack of a policy push. Despite the odds, India has maintained its lead in the global solar heat for industrial processes (SHIP) market. According to the Renewable Global Market Status (REN21) 2018 report, the country accounted for 1.5 per cent of all solar water heat collectors in the world in 2016, securing the sixth position. In 2017, it ranked second in solar water heat collector additions, an increase of 26 per cent over the previous year. Further, it became the fourth largest country by size in concentrating solar thermal technology in 2017, with 2.8 MW of installed capacity. The harnessing of solar power to generate thermal energy, especially for use in industrial applications, has a host of benefits for the country. A recent study by the Global Environment Facility-United Nations Indus40 ● Renewable Watch ● August 2018

trial Development Organization (GEFUNIDO) in India states that the energy demand from the industrial sector accounted for 42 per cent of the imported crude oil in 2014-15 (189.43 million tonnes), of which around 30 million tonnes provided thermal energy at temperatures below 250°C. Solar thermal technologies can produce a temperature range of 50°C to 400°C, which can be used in a variety of industrial heating applications and can replace up to 5 per cent of fuel oil. This can not only help in the demand side management of power, but also reduce the consumption of oil and diesel for heating purposes. This will, in turn, decrease the country’s dependence on oil imports.

Current status According to Jaideep Malaviya, secretary general, Solar Thermal Federation of India (STFI), the last decade witnessed the emergence of concentrating technologies

producing heat energy for community cooking and SHIP. The country has great potential for SHIP (due to the unending demand for heat and a high direct normal irradiance in many areas. As per the International Energy Agency, India and Mexico have the highest number of new solar heat in industry plants as of 2017. STFI had undertaken a study, in consultation with all stakeholders, to identify the potential industrial sectors requiring heat energy up to 150 °C. The GEF-United Nations Development Programme (ended in December 2016) and the GEF-UNIDO programme (ongoing) have made a huge impact on the Indian SHIP market. The installations in SHIP have crossed 35,000 m2. Globally, India holds the fourth place in the SHIP segment, after Oman, China and Italy, and is the only country in the world that has showcased SHIP applications across multiple industry segments unlike other

T R E N D S & D E V E LO P M E N T S countries, where the SHIP application is restricted to segments like dairy or mining.

Best practices India’s growing solar thermal market and leading position in the world is largely due to the best practices that it follows. Malaviya says, “The solar water heater market for domestic heating is matured. It is now an acceptable technology. But, in my opinion, the mandatory installation by electric utilities of Karnataka is a powerful driver. Subsequently, property tax concessions are also encouraging. India registered a 26 per cent year-on-year growth of solar water heaters in 2017 and notably, without any fiscal incentive, for which manufacturers must be credited.” If all electric utilities in the country realise the advantage of solar water heating systems by way of abating their peak demand, then it will push the market to grow further. A typical solar thermal system has about 65 per cent conversion efficiency and each square metre of collector area on a normal sunny day is equivalent to 2 kWh of power used for heating. Considering the long-term implications of the technology in saving power, STFI has now demanded that all future residential buildings, beginning with the ones in the designated solar cities, must have a mandatory clause for solar water heating. Malaviya says that quality, standardisation of technologies and best maintenance practices must be adhered to by manufacturers. The solar water heater installations must be made a part of the rooftop solar targets. The government must give equal space to the solar thermal segment and draft more stringent policies to help the market grow.

Challenges and opportunities The import of substandard, evacuated, tube-type solar thermal systems from China is one of the biggest trade barriers that makes domestic manufacturing unviable. There is a need to impose higher anti-dumping duties on them, akin to the PV module manufacturing segment. Also,

stricter implementation of the Bureau of Indian Standards (BIS) standards for evacuated tube systems will help keep the quality under check. Currently, only flat plate-type systems are subject to BIS accreditation. Other challenges include lack of volume demand, low awareness amongst bankers and financial institutions, policy vacuum for mandating industrial heat like solar purchase obligations, lack of technology knowledge with certified energy auditors and managers, and no mandatory enforcement of BIS standards. Malaviya believes that India has the potential to be the global leader in solar thermal as the business environment is conducive for meeting heating demands in domestic, industrial and commercial establishments. The attractiveness of solar PV with the coming of net metering is leading to a “battle of roofs” owing to space constraints in deploying both types of solar technologies, which is likely to challenge the domestic solar water heater industry. For encouraging SHIP systems, demand must be created by way of either obligation or attractive fiscal incentive to industries. Institutions like the Petroleum Conservation Research Association and the Bureau of Energy Efficiency must join forces and incorporate appropriate measures to implement solar thermal heating.

Future outlook According to a study, dairies, metal processing (automobile components), food processing, and chemicals and rubber processing units, breweries, pharmaceutical companies, textiles and desalination plants require heat energy up to 150 °C. The price uncertainty of fuel oil and life

India’s growing solar thermal market and leading position in the world is largely due to the best practices that it follows.

cycle benefits are attracting these industries to opt for SHIP. Meanwhile, the Ministry of New and Renewable Energy has set a target of 90,000 m2 area to be utilised for solar thermal technologies until the year 2022. Quality systems and the desire to do away with fuel oil heating can even raise the level to 100,000 m2 annually. More initiatives need to be introduced to drive growth in the SHIP market. One such initiative could be the introduction of renewable heat obligation in industries on the lines of renewable purchase obligations. Another initiative could be to encourage projects through renewable energy service companies (RESCOs). In the RESCO model, the beneficiary does not invest upfront, instead the RESCO commissions the project and also arranges for the finance. The invested money is recovered under an agreement against the savings provided. This would increase user confidence as qualitative systems would be offered for the deployment of solar thermal technology. Moreover, nearly 70 per cent of the components in a SHIP system are made domestically, save for the mirrors and reflectors. They require a special type of low iron glass, which is currently produced by a few global manufacturers. High volume production can, however, pave the way for indigenisation as economies of scale would help manufacturers achieve commercial viability, making SHIP a 100 per cent “Make in India” initiative. With solar PV gaining traction rapidly, there is still hope for solar thermal technologies, especially with the growth being witnessed in the industrial corridors of the country. A policy and regulatory push, however, is needed in order to create the right market for the technology. India’s leadership position in the global SHIP and solar thermal segments must be leveraged to help domestic manufacturers export technological best practices to emerging countries. However, concerted efforts by the government will be required in order to make SHIP a success story. ■ August 2018 ● Renewable Watch ● 41

COMPANIES

MGVCL Aiming for greater grid reliability through technology

ujarat’s state distribution licensee Madhya Gujarat Vij Company Limited (MGVCL) caters to power supply and distribution in the central part of the state – an area spanning 23,854 square km and covering almost 4,404 villages and 308 million consumers. Its network comprises 239 substations, 2,059 feeders at the 11 kV level, 58,697 ckt. km of high tension (HT) lines, and 69,269 ckt. km of low tension (LT) lines. MGVCL’s transmission and distribution (T&D) losses were over 11 per cent as of March 2017, and are currently 9.8 per cent. MGVCL has a 38 MW rooftop market and the number of such consumers, especially in city areas, is increasing each day. Such consumers have been provided with a net metering facility, which enables them to provide data on power import and export, utilisation, etc. They are also being given connections as early as possible.

Controlling losses Currently, aggregate technical and commercial (AT&C) losses are 12.38 per cent, with the target for 2018-19 set at around 8.5 per cent. However, meeting this target is expected to be a huge challenge for the discom, as areas where losses are still high require police protection, which is currently limited. Another challenge for the discom in controlling losses is that the discom’s area also includes scattered villages where consumers are prone to illegally tapping the distribution networks. Hence, in these parts, MGVCL has implemented the aerial bunched network for its LT distribution networks. Further, the removal of connections is being undertaken in areas where customers have accumulated arrears. In certain cases, lines are being disconnected so as to prevent 42 ● Renewable Watch ● August 2018

malafide use. Apart from these measures, the timely maintenance of distribution transformers is also being done to improve network reliability.

Dynamic reactive compensation One of the projects currently under way by MGVCL is a dynamic reactive compensation project for improving the voltage profile of the grid. For this, around 574 capacitors of 3x200 kVAR capacity are being installed on 11 kV feeders. So far, 100 capacitor banks have been installed at different locations and the installation of the remaining capacitors is in the pipeline. Once fully implemented, the project would enable compliance with the grid code. As per the Electricity Grid Code, 2013, distribution licensees are required to maintain a power factor of not less than 0.9 lag. The project would also eliminate manual intervention and all actions for controlling the power factor will be automated. The

Gujarat Energy Transmission Corporation is the other identified beneficiary of the project, along with MGVCL.

Smart grids and smart meters In the future, MGVCL is also planning to implement a pilot smart grid project. This would enable enable two-way communications and hence, be capable of monitoring and responding to everything from changes in power plants, customer preferences to even individual appliances. The key features of the envisaged smart grid would be smart meters; integration of solar, wind and other renewable sources; forecasting demand and supply; a selfhealing network; demand-side management; real-time balancing; etc. However, regulatory issues due to the high cost of smart meters (which would impact consumers) and cybersecurity issues need to be taken care of. Recently, MGVCL has communicated a

COMPANIES demand for 15 million smart meters to Uttar Gujarat Vij Company Limited, a tender for which has already been published. The installation of approximately 32.6 million smart meters is currently under progress. With this project, the discom expects AT&C losses to decrease to 5 per cent, and the transformer failure rate to reduce to about 8 per cent.

Issues and challenges One challenge the discom faces is that of agricultural loads impacting power quality. Gujarat has already separated agricultural load under the Jyotigram Yojana. However, agricultural load carries substantial induction. Further, about 21,100 new agricultural connections were released during 2014-15 and this inductive load of agriculture has a direct impact on voltage profile. Thus, to maintain a PF of even 0.9, the requirement of capacitors is huge (about 31,400 kVAR LT capacitors would have to be provided at load points considering an average load of just 7.5 HP for each agricultural connection). In addition, the inadequacy of reactive power compensation at load points has resulted in the drawal of reactive power from the upstream network, ultimately leading to poor voltage profile at the extra

high voltage (EHV) level. Although it is mandatory for consumers to provide capacitors on each agricultural pump load, it is either not provided, or if provided, not maintained by the consumers once it fails. There is no monitoring mechanism with the state utilities to monitor the functioning of these capacitors. The 11 kV feeders are also long, extending over 50 km in length. As a result, there are low voltage conditions on almost all long-length agricultural feeders. Low voltage conditions, coupled with a poor power factor, are leading to ampere loading on agricultural feeders crossing the design capacities. Hence, huge investments are required for the reduction of transmission losses (of 4 per cent) while technical losses on the distribution side (12 per cent) can be substantially reduced by the improvement of power factor.

Future plans A supervisory control and data acquisition upgradation project is currently being implemented at Vadodara by the discom, which is expected to be completed in the next three to four months. The project will enhance grid visibility and create robust distribution automation. The project is being implemented under the Integrated

MGVCL overview Description Geographical area Villages served (no.) Substations (no.) 11 kV feeders (no.)

Detail 23,854 sq. km 4,404 239 2,059

HT lines

58,697 ckt. km

LT lines

69,269 ckt. km

Distribution transformers (no.) Total consumers (no.) Annual revenue Maximum demand

132,540 308 million Rs 73.17 billion 1,866 MW

Source: MGVCL

Power Development Scheme for power supply improvement in the city areas. MGVCL is currently implementing the Suryashakti Kisan Yojana (SKY) as well. For this project, 11 of the discom’s feeders have been included as part of the pilot project under SKY . Meanwhile, regarding grid modernisation, the discom is looking at a number of other solutions along with an advanced distribution management system. This would allow higher reliability, improved voltage control and better distribution of resources. Another step required for improving reliability is fault location, isolation and service restoration, where automated circuit switching will identify and isolate faults, and restore power supply automatically. This will also improve customer experience and overall employee safety. Another initiative for grid modernisation is integrated volt-var optimisation, under which capacitors are installed for better power quality. MGVCL’s strategies and initiatives are evidently expected to support its transition to becoming a modern utility, with more responsive operational systems and customer-centric performance. ■ Based on inputs from a presentation by T.C. Choksi, Chief Engineer, MGVCL, at Power Line’s recent workshop on Grid Modernisation in Vadodara August 2018 ● Renewable Watch ● 43

COMPANIES

“India is a key upcoming market” Interview with Jinko Solar’s Donald Leo The solar power segment is facing new challenges with the possible levy of 25 per cent safeguard duty on imported solar cells. The step is likely to increase project costs, which may lead to a setback in achieving the 100 GW target on time. In an interview with Renewable Watch, Donald Leo, managing director, Asia South, Jinko Solar, shares his perspective on the likely impact of this levy, and Jinko’s plans to increase its market share in India... What is the company’s current scale of operations and what are its key offerings in India?

cant as compared to that in the US, Europe and Japan.

module sales due to Jinko’s strong brand positioning.

Jinko Solar is a leader in the solar module manufacturing industry, having shipped 9.8 GW of modules in 2017. The company has witnessed a strong year-on-year growth over the past 12 years. Currently, we have over 12,000 employees across eight production facilities spread globally, and 16 overseas subsidiaries. Jinko’s most premium product is the Cheetah Series module, which can go up to the rating of 400 W. In India, Jinko offers the Eagle Series in both monocrystalline and polycrystalline variants. This product line is suitable for the country’s humid climate and ensures a high return on investment.

What are the key challenges in the Indian solar market?

Is the company planning to set up a manufacturing unit in India?

Jinko Solar has set up manufacturing units in strategic locations such as the US, China, Malaysia and Europe. These factories offer the latest module technology as well as high capacity run rates.

India crossed the 20 GW installed solar capacity benchmark in 2017 and is marching fast towards its 100 GW goal. However, there are certain roadblocks that need attention for the industry to maintain a high pace of growth. In 2017, low tariffs and the roll-out of the goods and services tax were the primary concerns. Today, the segment faces a key challenge pertaining to the implementation of 25 per cent safeguard duty amidst talks of anti-dumping duty as well, which is slowing down the market growth. Pricing is another factor that demands rectification to improve project returns. Developers continue to make aggressive bids on the presumption that module costs will decline further, while the government lauds low tariffs. This may not be the case going forward. Thus, the strategy for bid designing needs an overhaul.

How much share does India account for in the company’s total global revenues?

How will the proposed duty, if implemented, impact manufacturers including Jinko?

In 2017, Jinko accounted for 6.2 per cent market share in India alone. The company is confident of maintaining or exceeding this figure in the coming years, as India is a key upcoming market for module suppliers, in terms of shipment quantity. In terms of revenue, due to the reverse auction regime in the country’s solar industry, prices are being driven downwards. Hence, the company anticipates that the revenue per module sale in India may not be as signifi-

Any trade barrier is bound to slow down the pace of solar installations. In my opinion, imposition of the safeguard duty will hamper the stable industry growth. It will increase project costs, which, in turn, will impact the end consumers. So far, Jinko has seen a steady market growth in the country. Most developers would have a pass through clause for their current power purchase agreements, and thus, the duty is not expected to have a major impact on

In which countries does the company have its manufacturing facilities?

Jinko has enough production capacity to service module demand in large quantities. However, we are open and optimistic about engaging in manufacturing discussions with our partners and customers in India. How does Jinko plan to tap the rooftop solar segment in the country? India’s rooftop solar market is very promising. Jinko is definitely looking to target the rooftop market with its product offerings that are especially suited for rooftop installations. We have large warehouses in Gurugram and Mumbai, from where we have been supplying all types of modules. For local distribution, Jinko is exploring partnerships with many dealers. However, the company has to consider certain crucial parameters that need to fit the bill before the distributorship can be granted. What are the company’s future plans in India?

44 ● Renewable Watch ● August 2018

Jinko is firmly committed to India’s solar market and will play a crucial role towards meeting the module requirements of the country. So far, the company has supplied over 1.5 GW worth of modules in the country and is racing towards the 3 GW capacity target by next year. With a full-fledged team based out of New Delhi and Mumbai, Jinko aims to support its clients for preand post-sales service. ■

PERSPECTIVE

“Our main focus will be on small-hydro” Interview with Tarun Kapoor Himachal Pradesh has significant small-hydro power (SHP) potential but delays in obtaining clearances (pending for 10-20 years in some cases), high capital costs and several other issues have been discouraging hydropower players from investing in the state. In a candid interview with Renewable Watch, Tarun Kapoor, additional chief secretary, multi-purpose projects and power, non-conventional energy sources, forest, environment, science and technology, discusses the steps being taken to resolve the various challenges… The state government recently made amendments to the hydropower policy. Will these help address the concerns of developers and fast-track SHP projects? Tarun Kapoor Additional Chief Secretary, Multi-purpose Projects and Power, Non-conventional Energy Sources, Forest, Environment, Science and Technology

“We will be allotting more projects through the competitive bidding route.”

Projects are getting delayed due to two key reasons. First, the construction of hydroelectric stations involves a lot of clearances and, even after the clearances come through, project construction faces a lot of challenges because the local people have huge expectations and at times stall project work. Second, while project costs have gone up, tariffs have gone down, making it financially unviable to undertake such projects. As far as the first issue is concerned, we have to ensure that projects get clearances fast. To this end, we are holding meetings with developers and going through each project to find out why it is stuck and are trying to solve the problems. Regarding financial viability, since the costs have gone up, the state government has decided to make certain financial provisions for these projects. We have decided that the 12 per cent free power clause can be deferred. Second, the tariff would be decided based on the date of commissioning and not the date of signing of the agreement. This is because some project agreements were signed 10-12 years ago when the tariff was Rs 2.50 or Rs 2.40 per unit. Today, the tariff has increased to Rs 3.40 per unit and those projects are still not ready. If the project is set up at such low tariffs, its viability would be questioned. Thus, banks are not lending money for projects. We will be following up on every project so that the construction time is reduced. Interest forms a very large component of the project cost and sometimes accounts for 25-30 per cent of the total cost. If a project is delayed and takes, say, 10

46 ● Renewable Watch ● August 2018

years to build, you can imagine where the project cost would go at an interest rate of 13-14 per cent. Therefore, if we can ensure that projects are constructed on time, it would help significantly. Normally, small projects should get completed within three years while larger projects should not take more than five years. Developers should try to complete projects faster so that their interest burden is reduced. The other problem that developers face relates to power transmission. We are trying for transmission lines to be built in time to enable the timely evacuation of power. We are trying to evacuate power through the existing network wherever possible. There are some projects that are under construction under the central government’s green energy corridor scheme; these projects have to be expedited. All these steps have encouraged developers to come forward and seek help not only for expediting existing projects, but also for setting up new projects in the future. We will be allotting more projects through the competitive bidding route. Investors or developers allege that panchayats often demand up to Rs 10 million per MW, for hydropower projects. How can such issues be resolved? Developers have been paying money to panchayats, which is not correct. Sometimes local people and panchayats demand money. This is not legal. I have been telling developers to not pay anything other than what has been approved under the government’s resettlement and rehabilitation plan. The government already has a provision for a local area development fund and there is a set rate for developers, and they should pay in line with that rate. As for settling issues with the

PERSPECTIVE local people, developers should approach the local administration and not start settling these issues themselves as they can get into trouble. We are also going to raise the issue with deputy commissioners and ask them to intervene in problems so that the norms that have been set are followed. The system that has been spoilt by some developers needs to be corrected. How is the issue relating to the selling of power by hydropower producers within and outside the state being resolved? The government recently took a decision that power from projects up to 25 MW would be procured at generic time. This is a good thing. Now, developers of up to 25 MW project capacity have an assured sale outlet. Other than that, developers are free to go for captive sale, they are free to sell to other distribution companies, or to an industry or a large consumer directly under open access. For selling outside the state, the main issue pertains to transmission, which calls for open access, which we are facilitating. The government has also decided that for captive consumption, developers will be allowed to wheel power on the state’s network without any wheeling charges. We have also requested the central government to waive the charges for SHP plants for interstate transmission, like it is for solar. If that happens, power generated in Himchal Pradesh could be exported to any other state at very little extra cost. Even if the developers are able to sell at Rs 4-Rs 4.50 per unit, it would earn very good returns for them. The Himachal Pradesh government has decided to give 10 per cent subsidy for rooftop solar installations in the state, in addition to the subsidy provided by the Ministry of New and Renewable Energy (MNRE). Not many people are opting for rooftop solar. Is this due to lack of awareness? Currently, domestic consumers going in for rooftop solar installations can avail of a 60 per cent subsidy from the MNRE, and a state subsidy of Rs 4,000 per kW. This is a substantial amount. For the commercial

sector, there is no subsidy but for government buildings, there is 70 per cent subsidy from the central government. As far as government buildings are concerned, we have set a target of about 2.5 MW just for Shimla, and another 2.5 MW will be installed in other places. An additional 5 MW will be installed on other buildings, including in the domestic sector. I think we will be able to get this much demand, which is in line with the target set by the Government of India for the state. The main issue is that the connectivity procedure is a bit complicated and people do not know much about it. Also, the time involved is very long. Recently, I was told that the central government has set up a website wherein a person can apply for connectivity with the grid and get approved developers to install their rooftop projects. From the Himachal Pradesh State Electricity Board’s side, we will make the procedures simpler so that it can be done without much hassle. Apart from 1,300 lights for the slum areas and the installation of a few 15 kWp and 20 kWp solar PV plants, not much has been done under the solar city programme in Shimla. Hamirpur is almost a non-starter. What are the provisions for solar promotion under the Shimla Smart City programme? Under the solar city programme, plans were prepared for both the towns and, these had to be executed under various existing schemes of the central and state governments. However, the progress has been slow. As per the budget available under the smart city programme, there is provision for solarisation of certain government buildings and public establishments. There is also some provision for solarisation under the Integrated Power Development Scheme (IPDS) and some work is being done under it. These two cities are majorly covered under the IPDS. If these three schemes eventually converge, a good amount of solarisation would take place in these two cities. Hamirpur has to also be covered under the existing schemes. This year, HIMURJA has taken up the task of installing solar projects on government buildings. Two districts where we have seen

good response are Una and Sirmaur. We will set up rooftop solar systems on government buildings in these two places. Do you think there is scope for harnessing wind energy in Himachal Pradesh? There are hardly any good sites where wind density is high in Himachal. We had proposed the setting up of a wind-solarbattery-SHP plant close to Kaza to supply power to that area. This project was approved by the MNRE and tenders were called. The bids became very high only because of the wind component, as developers thought that the transportation of wind equipment would be very expensive. The proposal has since been amended and wind has been kept out of the new draft. The new project will comprise solar and battery elements, to be integrated into an existing small hydel plant. We have resent the proposal to the centre and we will surely implement it once it is sanctioned. Other than that, I do not think we will be able to set up a wind-solar hybrid in the state. What about biomass cogeneration in Himachal Pradesh? Only 8.7 MW has been achieved so far. Is there any scope for developing this segment further? There is not too much scope on the biomass cogeneration front, except that some waste-to-energy (WtE) plants can be set up. One plant exists in Shimla, though it is not running as it has problems. The government is now making certain amendments. We are proposing eight new WtE plants, but we will leave the technology selection to the developers. One plant is under construction in Manali, while another plant is being bid out in Baddi. Hopefully something will work out. Are there any other new initiatives being looked at in the renewable energy space in Himachal Pradesh? For Himachal Pradesh, our main focus will continue to be on small-hydro. We may also try floating solar if it turns out to be viable as the state has several reservoirs. ■ August 2018 ● Renewable Watch ● 47

PERSPECTIVE

Infrastructure Revamp Powergrid focuses on improving renewable power transmission

y 2022, India is expected to reach the 550 GW installed capacity mark and the renewable capacity share is expected to increase from the current 20 per cent to 33 per cent. The government is taking rapid strides for tendering wind and solar capacities to achieve its set targets. Over the past year, the Solar Energy Corporation of India (SECI) has announced bids for about 6 GW and 7 GW of ISTSconnected wind and solar capacity respectively and more such tenders are expected to be rolled out within 2018-19 itself. Thus, a large part of the upcoming renewable capacity is likely to be interconnected through the interstate transmission system (ISTS) system, calling for rapid transmission infrastructure addition.

Challenges faced by Powergrid As a transmission system planner, Power Grid Corporation of India Limited (Powergrid) is facing several challenges. Renewable energy technologies have a low gestation period of 12-18 months. However, setting up a transmission system can take 24-48 months. Therefore, the transmission system needs to be planned in advance according to the renewable energy potential in different regions, which is often not the case. Also, for transmission network development, infrastructure has to be set up in one go unlike renewable power projects that can be set up in phases and capacity can be added as and when required. Another challenge is that the consumption points for renewable power are not always decided at the time of bidding. In the case of ISTS-connected projects, SECI approves most of the power purchase agreements, therefore, the transmission utilities do not have an early visibility into the expected power transfer. The technical issues related to renewable power 48 ● Renewable Watch ● August 2018

transmission include transients leading to instability as well as making arrangements for supplying reactive power.

Green energy corridors These issues surrounding the transmission system need to be mitigated to meet the capacity addition targets and to prevent renewable energy curtailment. To this end, the development of green energy corridors (GECs) was taken up in 2012. Under this, transmission for zones with high renewable potential was planned in anticipation of the capacity that was likely to be added. These GECs are being used to evacuate the renewable power that has mostly come up after 2016-17. While a part of the target transmission capacity has already been commissioned, in 2018-19, about 3,200 ckt. km of GEC will be added across Gujarat, Rajasthan and Tamil Nadu. The 100 GW solar target includes setting up of at least 50 solar parks with an aggregate capacity of 40 GW across various Indian states. In the first phase of GEC development, Powergrid was assigned the task of implementing the evacuation systems for eight solar parks across five states, of which the N.P. Kunta Solar Park in Andhra Pradesh and the Pavagada Solar Park in Karnataka have been commissioned.

Wind and solar energy zones Recently, Powergrid along with the Ministry of New and Renewable Energy, the National Institute of Wind Energy, the state transmission utilities, state nodal agencies and wind developers have held discussions on the prioritisation of renewable energy zones with a special focus on wind energy zones (WEZs). Based on all stakeholders’ inputs, Powergrid anticipates that the transmission infrastructure for about 22 GW of wind and 50 GW of solar capac-

WEZs identified by Powergrid District/Complex Koppal, Karnataka Kurnool, Andhra Pradesh Dwarka, Gujarat Kutch (Bhuj), Gujarat* Kutch (Bhuj - II), Gujarat Lakadia (Bachau), Gujarat Karur, Tamil Nadu Tirunelveli/Tuticorin, Tamil Nadu* Osmanabad, Maharashtra Total

Capacity (MW) 2,500 3,000 2,000 3,000 3,000 2,000 2,500 2,000 2,000 22,000

*High transmission capacity corridors exist/are being implemented

Source: Powergrid

ity would be needed in the next few years.

The way forward For achieving higher renewable capacity addition, there is an urgent need for the establishment of a robust transmission path, however, several other steps can be taken to improve power management in the grid. Adequate reserves need to be provided to balance renewables. These reserves can be in the form of energy storage technologies such as pumped hydro, batteries or thermal power plants. Modes of flexible power supply should also be identified to support grid balancing. Moreover, an appropriate regulatory framework should be made to provide ancillary service support through renewables. Renewable power plants should also strictly comply with the set regulations on LVRT, harmonics, DC injection, etc., to maintain grid reliability. These steps combined with forecasting and realtime monitoring of renewable generation could go a long way in supporting the power transmission system of the country. ■ Based on a presentation by Sandeep Kumavat, Deputy Manager, Powergrid, at the “Power Transmission in India” conference

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PERSPECTIVE

“POSOCO is focused on making a self-healing grid” Interview with POSOCO’s K.V.S. Baba Power System Operation Corporation Limited (POSOCO) has been instrumental in facilitating the integrated operations of regional and national power systems to ensure grid security and reliability. With the power sector landscape experiencing significant changes in recent years, POSOCO’s priorities have been focused on facilitating integration of renewable energy with the grid, improving the grid’s frequency profile, operationalising ancillary services as well as introducing automated generation control (AGC). In an exclusive interview to Renewable Watch, K.V.S. Baba, chairman and managing director, POSOCO, shares his views on POSOCO’s evolving role, challenges in renewables integration and the organisation’s key priorities… What is your perspective on the current state of the power sector? How has POSOCO’s role in the power sector evolved over the years? The power sector in India has undergone a transformation with progressive policy-level reforms and effective implementation in the recent years. The tremendous pace of expansion of the generation and transmission segments in terms of higher voltages, new technologies, ultra mega power projects, large high voltage direct current projects, fixed series capacitors and static synchronous compensators have strengthened the Indian power grid to meet the peak demand of around 170 GW in 2018. Non-discriminatory open access at the interstate level has been enabled through a robust and vibrant electricity market with now over 50,000 transactions being carried out totalling about 100 BUs in short-term market volumes. The functions of POSOCO have been evolving with the integration of power systems, increase in electricity demand, growth of the economy, and changes in technology, regulations, market design, administration and management of the power system. POSOCO is a knowledge-based organisation, but also performs various other functions assigned by the central government from time to time. Further, POSOCO facilitates and enables power sector reforms introduced by the Ministry of Power and gives regular feedback to the Central Electricity Regulatory Commission (CERC), the Central Electricity Authority (CEA) and the central transmission utility on the design and opera50 ● Renewable Watch ● August 2018

ed with the implementation of ancillary services. For 70-75 per cent of the time, the frequency remains within the operating frequency band of 49.90-50.05 Hz mandated by the Indian Electricity Grid Code. On most days, the average frequency is close to the national reference frequency of 50 Hz. How is the ancillary services market shaping up? What are the key issues and challenges?

tional aspects of the power system. What were some of the notable studies undertaken by POSOCO during the past year? How was the performance of the grid during this period? A number of studies and simulations have been carried out in the recent past to understand the various aspects of the Indian power system and the electricity market, particularly the impact of renewable energy integration. These include interalia studies on flexibility requirements, demand patterns, hydro generation optimisation, gas generation optimisation, market behaviour and renewable integration simulation. These studies have given confidence that the Indian power system is capable of integrating large-scale renewable energy in a secure and reliable manner. The frequency profile has improv-

Ancillary services were implemented in the Indian electricity market in April 2016 through a regulated mechanism. With the in-house development of customised software solutions, Reserves Regulation Ancillary Services (RRAS) have addressed congestion management issues and provided optimisation at the regional and pan-Indian levels, thereby also facilitating the integration of renewables. Ancillary services have proved to be a valuable mechanism to grid managers for maintaining the system parameters, especially during extreme weather conditions, generation unit outages, transmission line trippings and high power demand. However, there are several challenges being faced in the ancillary services market. These pertain to “gate closure” in the scheduling process, the quantum of reserves to be maintained, load and renewable generation forecasting, speed of communication of instructions, metrics for performance monitoring, the review of charges payable for RRAS, etc. Thus, more options/products need to be provided under ancillary services for smooth grid

PERSPECTIVE operation. Steps are being taken to expand the ambit of ancillary services to include fast tertiary control through hydro, secondary frequency control, voltage control and black-start service. After gaining experience in the current regulated version, a market-based model for providing ancillary services may be considered. What are the key challenges in the integration of renewable energy into the grid? How can grid reliability issues be addressed? The large-scale penetration of renewables and other distributed resources in the grid increases uncertainty and volatility in power grid operations. Operational challenges include fast ramping, variability, potential grid instabilities resulting from the loss of inertia, visibility and controllability of behind-the-meter resources, load stagnation/oversupply, and inadequate communication interfaces and operator training. Reinforcement and expansion of the existing power grid is needed to accommodate the increase in electricity consumption and the integration of distributed energy resources. This would require flexibility in conventional generation, frequency control, creation of generation reserves, introduction of ancillary services, a forecasting, scheduling, deviation settlement mechanism, a balancing mechanism, robust data telemetry and communication systems, establishment of renewable energy management centres, augmentation and strengthening of the transmission system as well as compliance with regulations and standards by renewable generation. What steps are being taken for the implementation of AGC on a pan-Indian basis? In October 2015, the CERC gave the roadmap to operationalise reserves in the country. It identified primary, secondary and tertiary controls as important components for secure grid operations. A total of 3,600 MW was earmarked as secondary reserve. In December 2017, the CERC approved the commissioning of the AGC pilot project between the National Load Despatch Centre and NTPC Dadri Stage II. AGC was

operationalised in India in January 2018 on a pilot basis. Four other locations in the western, southern, eastern and north-eastern regions were also identified and implementation of the pilot AGC project in those regions is under progress. Further, the frequency bias mode and tie-line bias frequency mode operations are being studied besides configuring additional units on AGC. After successful testing, this technology is planned to be implemented across the country in around 100 power generation plants. A total of around 65,000 MW is envisaged to be brought under AGC. The full-scale project, planned by 2022, will enable efficiency and grid security in the Indian power system, making it ready to handle the targeted 175 GW of renewable energy capacity. What is the status of renewable energy forecasting by RLDCs? In order to deal with the variability of renewable generation, forecasts are crucial to ensure grid security and resource adequacy during operation. Forecasting is a prerequisite for the scheduling of renewable energy generation. There is a need for both centralised and decentralised forecasting systems. The framework for forecasting, scheduling and deviation settlement for renewables at the interstate level has been implemented with effect from November 1, 2015. Although the quantum of renewable capacity under the regional load despatch centres’ (RLDCs) jurisdiction is small, the quantum of deviations for such generating stations is being worked out by regional power committees. At the state level, in line with the Forum of Regulators’ model regulations, renewable energy forecasting and scheduling regulations have been notified by Andhra Pradesh, Chhattisgarh, Jharkhand, Karnataka, Rajasthan, Tripura, Uttarakhand, Mizoram and Manipur. Also, draft regulations by state electricity regulatory commissions of Gujarat, Madhya Pradesh, Odisha, Tamil Nadu, Punjab and Haryana are at various stages of deliberations. What are POSOCO’s key focus areas going forward?

The electricity grid managers have a significant and critical role in the energy value chain and hence, need to be quick in adapting, while also mitigating new risks. One of the key priorities of POSOCO is to implement a framework for reserves with both primary and secondary frequency controls. Load and generation forecasting is another thrust area to manage uncertainties on account of load and renewable energy variations. POSOCO is focused on improving grid resilience and making a self-healing grid to deal with natural calamities and climate change phenomena. In view of cross-border interconnections, POSOCO’s role would be pivotal and POSOCO would hand-hold the emerging economies to achieve reliable and secure grid operations along with a robust electricity market. Further, in view of the large-scale renewables penetration, flexibility of available resources needs to be harnessed and valued. To this end, POSOCO is attempting an optimisation exercise on a real-time basis, factoring in various constraints, such as 55 per cent technical minimum of thermal plants, limited energy hydro resources and the interregional transfer capability. There is huge scope for improvement in areas like interface meter adequacy, sacrosanct schedules, 5-minute scheduling and settlement, real-time generation despatch, double-entry energy accounting system, deviation settlement mechanism based on the “causer pays” principle, communication and data telemetry. POSOCO will strive for grid reliability standards to ensure monitoring of grid operations with respect to the CEA standards and CERC regulations. POSOCO aims to implement technology upgradations in situational awareness tools, IT automation and cybersecurity tools, in line with the best international practices. Last, but not the least, managing human capital and building sustainable institutions are also key priorities for POSOCO. We will ensure that best of training and certifications are provided to system operators to enable them to develop domain knowledge and analytical abilities. ■ August 2018 ● Renewable Watch ● 51

FINANCE

Mixed Results Performance of key solar and wind power companies By Khushboo Goyal and Smriti Mehra

he year 2017-18 has been an eventful year for both the solar and the wind energy segment. While large capacities were tendered by the central and state agencies, many of the bids had to be cancelled or postponed. The key reasons for this were inadequate transmission capacity and uncertainty regarding various regulations, which continue to affect solar and wind capacity additions. This has impacted the financials of almost all renewable energy companies and they have had to settle for smaller revenue shares. In line with the trend observed in the previous quarter, solar power developers continue to perform better than their wind counterparts, even though the government has renewed its focus on wind power development. Renewable Watch takes a look at the financial results of select listed renewable energy companies for the year 2017-18 and compares these with the results reported in 2016-17. (The financial results

for the quarter ended June 2018 have not yet been released by many companies. The article, therefore, discusses the financials of select listed wind and solar companies till the quarter ended March 2018.)

Inox Wind Limited Inox Wind was hit hard by the introduction of competitive bidding. The company reported a net loss of Rs 1,876.1 million for the year 2017-18 against a net profit of Rs 3,032.9 million in 2016-17, with an annual decrease of over 161.86 per cent in its profit after tax. The total income declined by 85.51 per cent from Rs 34,803.2 million in 2016-17 to Rs 5,042 million in 2017-18. Total expenses also plunged from over Rs 30,535.1 million to Rs 7,846.6 million during the same period. A similar pattern was observed in the quarterly results. The total income fell from Rs 10,335.5 million for the quarter ended March 2017 to Rs 2,056.4 million for the

quarter ended March 2018, a decrease of 80.1 per cent. Profits in this quarter decreased by 143.64 per cent compared to the corresponding quarter last year.

Orient Green Power Limited With the successful execution of new operational strategies, this wind power developer reduced its net loss by 55.89 per cent from continuing operations, to Rs 371.53 million in 2017-18 against Rs 842.33 million at the end of the previous year. In 2017-18, its income went up marginally, by around 3.43 per cent, while expenditure fell by 7.09 per cent as compared to the previous year. Orient Green Power liquidated its entire renewable energy certificate (REC) inventory by selling 662,640 certificates in 201718 as against 201,366 certificates in the previous year. The reduction in net losses in 2017-18 may also be attributed to the sale of the companyâ&#x20AC;&#x2122;s eight biomass units to Janati Bio Power Private Limited. For the quarter ended March 2018, the net loss declined by 24.2 per cent, relative to the corresponding figure for the previous year. Income and expenditure also decreased by around 24 per cent each as compared to the corresponding quarter last year.

Suzlon Energy Limited Like many other wind companies, Suzlon Energy Limited has moved from earning net profits to incurring net losses in 201718, due to the transition to the competitive bidding regime. The company, which reported net profits of Rs 8,516.4 million in 2016-17, incurred net losses of Rs 3,840.1 million in 2017-18. The total income for 2017-18 also declined to Rs 84,130.1 million from Rs 128,032.9 million in 2016-17, 52 â&#x2014;? Renewable Watch â&#x2014;? August 2018

FINANCE

Financial performance (consolidated results) of select renewable energy companies Yearly

Total income (Rs million)

Net profit (Rs million)

2017-18

2016-17

Growth (%)

2017-18

2016-17

Growth (%)

Inox Wind Limited

5,042.00

34,803.20

(85.51)

(1,876.10)

3,032.90

(161.86)

Orient Green Power Company Limited*

3,986.45

3,854.26

3.43

(371.53)

(842.33)

55.89

Suzlon Energy Limited

84,130.10

128,031.90

(34.29)

(3,840.10)

8,516.40

(145.09)

Azure Power (unaudited)

7,700.60

4,183.00

84.09

(1,022.23)

(1,191.57)

14.21

Indosolar Limited

3,184.35

4,452.85

(28.49)

(1,628.35)

(579.30)

(181.09)

Growth (%)

Quarter ended March 2018

Quarterly

Total income (Rs million) Quarter ended March 2018

Inox Wind Limited

Net profit (Rs million) Quarter ended March 2017

Growth (%)

2,056.40

10,335.50

(80.10)

(556.60)

1,275.40

(143.64)

441.85

582.80

(24.18)

(594.80)

(784.65)

24.20

22,597.10

50,238.40

(55.02)

(4,698.50)

5,887.50

(179.80)

2,259.02

1,317.58

71.45

147.66

(306.73)

148.14

537.60

1,152.50

(53.35)

(1,872.64)

330.60

(666.44)

Orient Green Power Company Limited* Suzlon Energy Limited

Quarter ended March 2017

Azure Power (unaudited) Indosolar Limited * From continuing operations Source: Companies’ financial statements

a decrease of 34.29 per cent, while expenditure declined 22.19 per cent. The trend was no different for the quarter ended March 2018. In fact, there was an even sharper decline of 55.02 per cent and 37.85 per cent in income and expenditure respectively. Net profits declined by 179.8 per cent in comparison to the corresponding quarter of 2016-17, with a net loss of Rs 4,698.5 million. The change in the wind regime and the drop in wind tariffs led to the cancellation of many of the company’s long-standing orders, including Mytrah’s order of 436.8 MW. This was the major reason behind the company’s dismal performance last year. Despite this, it still managed to retain its number one position in India as an original equipment manufacturer with the commissioning of 626 MW of wind capacity in 2017-18.

Azure Power Azure Power, which is listed on the New York Stock Exchange, witnessed good financial growth in 2017-18. The company, with 911 MW of operating solar assets as of March 2018, reported an increase of 40 per cent in operating capacity against that in March 2017. Its income increased

by 84.09 per cent, from Rs 4,183 million in 2016-17 to Rs 7,700.6 million in 2017-18, which can be attributed to the commissioning of new projects. As a result, Azure Power’s net loss reduced by 14.21 per cent in 2017-18. The quarter ended March 2018 witnessed a 71.45 per cent increase in total income, with the company reporting a net profit of Rs 147.66 million against a net loss of Rs 306.73 million in the corresponding quarter of 2016-17. The company’s operating and committed capacity stood at 1,871 MW as of March 2018, which shows a growth of 71 per cent over the previous year.

Indosolar Limited Indosolar’s net losses increased from Rs 579.3 million in 2016-17 to Rs 1,628.35 million in 2017-18, a rise of 181.09 per cent. The total income decreased by 28.49 per cent during this period. Expenditure decreased from Rs 5,030.73 million in 2016-17 to Rs 4,171.38 million in 2017-18. The final quarter of 2017-18 saw a fall of 53.35 per cent in total income, accompanied by a significant decline of over 666 per cent in net profits compared to the corresponding period in the previous year.

The total expenditure went up by just 2 per cent for the quarter ended March 2018. A likely reason for the low profits is the lower demand for Indian modules as compared to their foreign counterparts. However, this situation is likely to improve with the imposition of a safeguard duty on foreign solar cell imports.

Conclusion Only two companies, Azure Power and Orient Green Power Limited, have shown an improvement in their financial performance. While Azure Power’s growth is due to its focus on expanding its solar project portfolio, Orient Green Power Limited’s reduction in losses can be attributed to the sale of its biomass units and clearance of its REC stock. Wind turbine manufacturers Inox Wind and Suzlon have suffered major losses due to the uncertainty resulting from competitive bidding in the wind segment and the cancellation of orders. However, Suzlon has recently started diversifying into the solar power space, which may help it generate profits. Solar module manufacturer Indosolar may also improve its financials with the implementation of safeguard duties on solar imports and the huge solar capacity additions expected in the near future. ■ August 2018 ● Renewable Watch ● 53

TECHNOLOGY FOCUS

SOLAR-WIND HYBRIDS

Creating Synergies Solar-wind hybrids could be the answer to India’s power problems By Khushboo Goyal

o address the issues of demandsupply mismatch, energy security and climate change, the government, along with various state agencies, has been focusing on renewable energy development. However, land unavailability and transmission constraints make this a challenging task. In the past, many tenders have been postponed due to one or both of these limitations. In addition, solar and wind are intermittent energy sources, which makes it difficult to maintain the balance between power supply and demand at all times. On the positive side, these two fastest growing renewable energy technologies have complementary generation patterns in the Indian context. While solar energy is present during the day (8 a.m. to 6 p.m.) and peaks around noon, wind energy is generated from late evening to early morning and peaks around night. This comple-

mentary pattern of wind and solar can be utilised by a solar-wind hybrid system to produce a somewhat constant source of energy throughout the day.

Benefits of solar-wind hybrids Solar-wind hybrids are an excellent option to fully utilise land and energy resources. These plants can address the problem of intermittency associated with independent solar and wind energy resources to ensure a more reliable grid and balanced power supply. The peak power requirements can also be met to some extent with more balanced power generation and improved forecasting and scheduling. Deploying solar modules at high wind sites brings down the module temperature, leading to higher generation and lower degradation of solar modules. Apart from providing reliable power supply, hybrids can optimise land use by co-locat-

ing wind and solar in the same land area. For instance, empty land tracts between wind turbines in a wind farm can be packed with solar panels. This can help generate more energy per unit area as compared to a stand-alone wind or solar plant. In a hybrid plant, the same land and infrastructure can be simultaneously used by both wind and solar. This includes access roads, boundaries and fencing, control centres, monitoring and communication channels, and firefighting equipment. Even the same power evacuation system can be used to feed both solar and wind power into the grid, owing to the complementary generation patterns of both the resources. While it is easier to set up a common evacuation system in a greenfield project, a brownfield project can also accommodate additional solar or wind capacity, provided it is less than the existing capacity. In addition to these, a single team of technicians and service personnel can be trained to operate and maintain both the solar and wind plants. This can result in significant cost savings for a project developer. The landed cost of power for a solarwind hybrid plant could be much lower than the combined cost of power from stand-alone solar and wind plants. Also, the entire infrastructure, particularly the evacuation system, is used more optimally as it is put to use throughout the day.

Potential and policy The total potential of solar-wind hybrids in India is estimated at as high as 10,300 GW, as per the “Re-assessment of India’s On-shore Wind Power Potential” report jointly prepared by the Centre for Study of

54 ● Renewable Watch ● August 2018

SOLAR-WIND HYBRIDS Science, Technology and Policy (CSTEP), WinDForce Management Services (WFMS) and Shakti Sustainable Energy Foundation (SSEF) in 2016. The report considers the total available land area to be 103,082 square km while the solar potential and hybrid-capable wind potential is estimated at 11,380 GW and 585 GW respectively. The solar potential has been calculated for areas with global horizontal irradiance of greater than 5.7 kWh per square metre, while the wind potential has been calculated for areas with wind speeds greater than 6 metres per second at 120 metre hub height. Until recently, only small demonstration projects or pilot projects were being set up in the country. The lack of a proper policy or regulation for solar-wind hybrids prevented the large-scale uptake of these projects. The government has now realised the economic advantages of these projects. As a result, the Ministry of New and Renewable Energy (MNRE) released the National Wind-Solar Hybrid Policy in May 2018. The policy aims to provide a framework for the promotion of large grid-connected wind-solar hybrid systems for the optimal and efficient utilisation of transmission infrastructure and land in order to reduce the variability in renewable power generation and achieve better grid stability in the country.

Solar-wind hybrid uptake

TECHNOLOGY FOCUS

Potential of solar-wind hybrids in India State

Area (square km)

Andaman & Nicobar Islands Andhra Pradesh Arunachal Pradesh Chhattisgarh

Solar PV potential (GW)

Hybrid-capable wind potential (GW) Hybrid at 120 metre hub height potential (GW)

6.1

0.4

5.5

20,000

220.0

112.0

1,987.0

0.2

102

11.0

0.6

9.9

Dadra & Nagar Haveli

4.5

0.2

4.1

Daman & Diu

1.5

0.0

1.3

Goa Gujarat

4.0

0.2

3,605.0

27,531

3,087.0

157.0

2,794.0

Himachal Pradesh

0.5

0.0

0.5

Jammu & Kashmir

6,361

629.0

36.0

570.0

Karnataka

8,000

915.0

45.0

828.0

9.0

0.5

7.8

Kerala Madhya Pradesh

2.5

0.1

2.1

18,612

2,054.0

106.0

1,860.0

2,653

275.0

15.0

249.5

2.0

0.1

2.0

15,230

1,705.0

86.0

1,545.0

0.6

0.0

0.5

Tamil Nadu

3,331

380.0

19.0

344.0

Uttarakhand

973

94.0

5.5

85.5

Maharashtra Odisha Puducherry Rajasthan Sikkim

West Bengal Total

0.3

0.0

0.2

103,082

11,380.0

585.0

10,300.0

Source: “Re-assessment of India’s On-shore Wind Power Potential” report jointly prepared by CSTEP, WFMS and SSEF in 2015

transmission system-connected wind-solar hybrid projects on a build-own-operate basis. The tariff ceiling has been fixed at Rs 2.93 per unit for the tender. SECI will sign power purchase agreements with the bidders for 25 years. The tender has a provision through which developers will be compensated for overgeneration to encourage bidders. Prior to this, SECI invited expressions of interest from engineering, procurement and construction contractors to develop a 160 MW solar-wind hybrid project with an energy storage system Ramagiri district of Andhra Pradesh.

Despite its large solar-wind hybrid potential, India’s first large-scale solar-wind hybrid plant was implemented only recently. This hybrid plant was commissioned by Hero Future Energies in April 2018 in Karnataka. The plant combines 50 MW of wind turbines with 29 MW of solar photovoltaic modules, and was set up by Siemens Gamesa. The plant operates in group captive mode and supplies power to industrial consumers at a competitive price.

Outlook

The government’s recent policy initiative has led to the launch of a mega auction for solar-wind hybrid projects. The Solar Energy Corporation of India (SECI) has recently tendered 2,500 MW of interstate

Solar-wind hybrid plant developers run into various technical and operational difficulties. This is because complex metering arrangements have to be undertaken to measure the generation of two resources instead of one. At times, developers have

to curtail generation to maintain power evacuation at the defined capacity, resulting in losses. Co-located hybrid plants face issues such as high shading losses for solar panels owing to the shadow effect of wind turbines on solar generation. Another issue is the instability of solar structures located in high wind speed zones. Despite several bottlenecks in their implementation, solar-wind hybrid projects are still commercially and technically viable. The integration of energy storage systems with hybrid plants is required to further improve the power curve and store surplus generation instead of curtailing it. Going forward, there is a clear need for proper metering and grid connectivity regulations and a tariff determination mechanism to remove the uncertainty associated with hybrid plants and promote their deployment. ■ August 2018 ● Renewable Watch ● 55

TECHNOLOGY FOCUS

SOLAR-WIND HYBRIDS

Setting a Trend SECI tenders India’s first large-scale wind-solar hybrid capacity By Anukriti

n May 25, 2018, the Ministry of New and Renewable Energy (MNRE) issued the guidelines for setting up 2,500 MW of ISTS-connected wind-solar hybrid power projects under the National Wind-Solar Hybrid Policy. The guidelines provide a framework for promoting gridconnected wind-solar photovoltaic (PV) hybrid systems in order to ensure optimal utilisation of transmission infrastructure and land, reduce the variability in renewable power generation, and achieve better grid stability. The MNRE has designated the Solar Energy Corporation of India (SECI) as the nodal agency for the implementation of this scheme. Following this, in June 2018, SECI released a request for proposal tender for setting up 2,500 MW of ISTS-connected wind-solar hybrid power projects (Tranche I). SECI asked bidders to submit both techno-commercial and financial bids together. This is the first large-scale wind-solar hybrid tender issued by SECI. Prior to this, it had invited expressions of interest from engineering, procurement and construction contractors to develop a

56 ● Renewable Watch ● August 2018

160 MW wind-solar hybrid project in Ramagiri district of Andhra Pradesh.

Tender specifications The tender defines a wind-solar hybrid project as one in which the rated power capacity of one resource (either wind or solar) is at least 25 per cent of the rated capacity of the other. As per the tender guidelines, a developer can bid for a minimum total capacity of 200 MW and a maximum capacity of 500 MW, with at least 50 MW of capacity set up at each project site. SECI has set a tariff ceiling of Rs 2.93 per kWh for this tender. The hybrid project developers (HPDs) will set up the power plants on a build-own-operate (BOO) basis. While SECI will sign power purchase agreements (PPAs) for a period of 25 years, the tender has a provision for extending the duration beyond that, depending on SECI’s approval. In addition to new projects, SECI has allowed projects that are under construction as well as those already commissioned but without any long-term PPA commitments to participate in this tender. SECI

had earlier planned to announce hybrid tenders in two 2 GW tranches for projects that would be developed on existing wind and solar sites. However, the plan was cancelled as developing hybrid projects on existing sites would lead to challenges pertaining to the overhaul of existing transmission lines, existing long-term PPA commitments, evaluation of existing projects and sites, higher tariffs, etc. The selected bidders for this tender can avail of fiscal incentives such as accelerated depreciation, concessional customs duties and tax holidays available for the projects as per the MNRE. They will have to submit a performance bank guarantee (PBG) of Rs 0.2 million per MW per project within 30 days of the letter of award (LoA) issuance. The HPDs will be responsible for setting up the transmission network for interconnection at a voltage level of 220 kV or above at their own cost. In addition, they will be responsible for obtaining all approvals, permits and clearances required for setting up the project from the state gov-

TECHNOLOGY FOCUS ernment and local bodies. The HPDs will have to apply for connectivity at the identified substations within 30 days of the issuance of LoAs. They will also be required to comply with central and state regulations on forecasting, scheduling and deviation settlement. While submitting the bids, the bidders have to declare the annual capacity utilisation factor (CUF) of their proposed projects, which can be revised once within the first year of plant operation. However, the declared annual CUF must not be less than 40 per cent and the generation must be in the range of 90-120 per cent of the declared value. SECI will relax the lower CUF limit for events such as non-availability of grid for evacuation that are beyond the control of the HPD. The developers will have to pay a compensation for the undergeneration of electricity and curtail excess generation. SECI will purchase the excess power generated within the specified limits, at the PPA tariff. As the 2022 deadline nears, the tendering agencies have become stricter in terms of enforcing commissioning timelines and levying penalties. SECI has mandated that the hybrid projects be fully commissioned within 18 months from the date of issuance of LoAs. In case of a delay of up to six months, the total PBG amount on a per day basis and proportionate to the capacity not commissioned will be charged as penalty. If the commissioning is delayed beyond this, the tariff will be reduced at the rate of Re 0.50 per kWh per day of delay for the uncommissioned capacity. The maximum time period allowed for full project commissioning after levying penalties has been set at 27 months from the date of LoA. After this, the capacity considered in the PPA will be reduced to the commissioned capacity only and the rest will be terminated. However, if the HPD fails to commission a project capacity of 50 MW or 50 per cent of the allocated capacity within the 27-month period, then, apart from the imposition of penalties, it will be blacklisted from participating in any MNRE or SECI scheme. 58 ● Renewable Watch ● August 2018

SOLAR-WIND HYBRIDS

Key features of SECI’s 2.5 GW wind-solar hybrid tender Particulars

Tender details

Tender type

RfS

Project development type

Build, own, operate basis

Upper tariff ceiling

Rs 2.93 per kWh

PPA duration

25 years

Minimum bid size

200 MW

Maximum bid size

500 MW

Minimum project size (at single location)

50 MW

CTU interconnection voltage level

220 kV or above

Minimum net worth of participating bidders (as of April 30, 2017)

Rs 15 million per MW (of the capacity quoted)

PBG amount to be submitted (within 30 days of LoA issuance)

Rs 0.20 million per MW per project

Time period to apply for connectivity at the identified substations

Within 30 days of issuance of LoAs

Minimum project CUF

40 per cent

Minimum permissible deviation from declared CUF

90 per cent

Maximum permissible deviation from declared CUF

120 per cent

Commissioning deadline from the date of issuance of LoAs

18 months

Penalty for six-month delay in project commissioning

Total PBG amount on a per day basis and

(for capacity not commissioned)

proportionate to the capacity not commissioned

Penalty for commissioning delay beyond six months and up to

Tariff reduction at the rate of Re 0.50 per kWh

27 months (for capacity not commissioned)

per day of delay

Penalty for commissioning delay beyond 27 months

Termination of capacity not commissioned

Source: Based on SECI's 2.5 GW wind-solar hybrid tender

SECI will approve early project commissioning depending on the availability of transmission connectivity and will purchase the power generated at the PPA tariff. However, in this case, no additional incentives will be given to the developers.

Outlook While India has been strictly following its tendering trajectory, issues such as inadequate transmission infrastructure have resulted in limited capacity addition. A case in point is SECI’s latest 2 GW wind tender, which was undersubscribed by about 800 MW. Since these problems remain unresolved, it is likely that this tender for wind-solar hybrid could see a similar response. Meanwhile, the Ministry of Finance has recently approved the Directorate General of Trade Remedies’ recommendations to impose a 25 per cent safeguard duty on solar cell and module imports from China and Malaysia from July 30, 2018. This is

likely to result in higher bid tariffs for SECI’s tender. These concerns notwithstanding, SECI’s tender for wind-solar hybrid projects will open up a new area of renewable energy development, which may improve transmission capacity utilisation as well as cost and land optimisation. India has only one commercially operational wind-solar hybrid power project (50 MW+28.8 MW), which is located in Karnataka. The current capacity is only a fraction of the 10 GW wind-solar hybrid target set by the government to be achieved by 2022. Through this tender, the MNRE hopes to replicate SECI’s success in tendering stand-alone wind and solar projects, which have received some of the lowest tariffs in the country. The outcome of this tender will play a major role in influencing state agencies to roll out similar tenders and effectively utilise the country’s resources for meeting its clean energy targets. ■

ADVERTORIAL

Ginlong Solis Technologies

stablished in 2005, Ginlong Solis is one of the oldest and largest global string inverter manufacturers globally. The company manufactures ultra-reliable, bankable, cost effective and innovative string inverters to benefit all categories of consumers ranging from the rooftop segment to the utility segment. Some of India’s major developers like Adani, ReNew Power, Rays Power, and SunSource Energy use Ginlong’s inverters for their solar plants. Ginlong’s advanced inverter technology The company manufactures five categories of inverters based on specific functions: MINI inverter, single-phase inverter, 5-20 kW three-phase inverter, 20-70 kW and 3-5 kW energy storage inverter. The company has launched a new three-phase 4G inverter range which offers many advantages over its competitors. It uses latest Infineon (Insulatedgate Bipolar Transistor) IGBT from Germany and a microprocessor made by Texas Instruments to achieve faster switching frequencies. This helps the company in achieving 0.5 per cent higher efficiency levels than the previous inverter models. In addition to higher efficiencies, this product offers multiple advantages of silent operation, reduced filter size and longer capacitor life. The spokesperson for Canopy Energy says “we have distributed about 1,000 inverters to the residential market, with a reliability of nearly 100 per cent. We appreciate the fact that the inverters can be monitored with a WIFI unit; which is extremely helpful”. Another of Ginlong’s clients, Longhorn Solar also testifies the product’s reliability and remarks, “we have installed a few hundred units with minimal problems. The inverter has a good look and an optimum price level.” Solis covers nine inverter sizes in the range 5-20 kW which can accommodate solar PV systems of any size. The inverter allows for 120 per cent over sizing of input to output rating, and can easily generate 110 per cent output power. The Maximum Power Point Tracking (MPPT) voltage range offered by Solis can help

in increasing the total energy generation as the inverter can start much earlier than usual in the morning and shut down much later in the evening. The total harmonic distortion of the new product has also reduced, thereby decreasing the risk of influencing communications over power lines. Another intelligent feature offered by Solis products is a high precision arc fault sensor which detects arc faults and stops the inverter from generating power, reducing the risk of fire. Solis has also proposed a new solution to solve the issue of overvoltage failure caused by voltage fluctuations of the grid. In addition, the product has improved conductive heat dissipation and cooling and has less weight, making it easier to install. Hall of fame Ginlong Solis’ inverter products have had an outstanding field record in India, since their introduction in the country’s market in 2016. Bullish about the future of string inverters in India, Idrish Khan, Chief Technical Officer, Ginlong Solar remarks, “India’s rooftop solar market will thrive thanks to a new collaboration between the World Bank and the State Bank of India (SBI). For meeting the country’s future solar rooftop targets, three-phase string inverters of sizes ranging between 20-60 kW, will be absolutely essential.” The company’s India headquarters are located in Mumbai and it has strategically located its service teams in Delhi, Jaipur, Ahmedabad, Mumbai, Bangalore, and Chennai. It provides services like telephonic support, engineer site visit and door to door inverter replacement service in case of any fault. The company has an unmatched service experience across more than 60 countries and offers five years standard warranty which can be extended to twenty years. In fact, the company’s clients in Mexico and Sweden also testify to the company’s excellent service and quick response time, which combined with the assured product quality and optimum price, make Ginlong Solis inverters a good choice for buyers. Ginlong’s products are optimised for local markets and serviced by local experienced teams, to deliver significant longterm return on investment for stakeholders. Their credibility can be ascertained from the fact that they are listed on the approved vendor lists of leading banks and financing institutes and their third party qualification testing was completed by DNVGL. Ginlong won the prestigious EUPD Top PV Inverter Brand award for three consecutive years, 2016, 2017 and 2018. GTM research ranked Ginlong fifth in the global singlephase string inverter market share in 2016 and 2017, and fourth in the global three-phase string inverter market share in 2017. Interestingly, Ginlong Solis inverters are also installed at the Eiffel Tower in Paris.

TECHNOLOGY FOCUS

SOLAR-WIND HYBRIDS

Early Mover Gujarat launches its wind-solar hybrid policy

o promote both wind and solar power uptake in Gujarat, the state government has launched the Gujarat Wind-Solar Hybrid Policy, 2018. It is the first state to have released a policy framework for hybrid projects based on the guidelines released by the Ministry of New and Renewable Energy. The policy, with an operational period of five years, has provisions for both brownfield and greenfield wind-solar hybrid projects. It encourages renewable power producers supplying to the grid as well as those using the power for captive purposes. It must be noted that the state has 1,637 MW of operational solar power capacity and 5,614 MW of wind capacity. This capacity can be utilised in a better way if converted into hybrid plants. These pro-

jects have a rated capacity of 40-45 per cent as against 20 per cent of standalone solar and wind power projects. However, hybrid power projects face geographical and designing constraints.

Solar-wind potential Gujarat has the highest wind power potential of 84,431 MW amongst all states in India, and the second highest installed wind capacity. On the solar front, various projects are lined up in the state including the world’s largest solar park in Dholera, which will have a capacity of 5,000 MW. The state has a high average annual solar irradiation of 5.5-6 kWh per square metres per day. Saurashtra, central and southern Gujarat regions receive high solar radiation from February to April, low radiation from May to

September. The rest of the months have moderate radiation. The low radiation during monsoon is compensated with high wind speeds during the same period. However, the wind speed fluctuates between moderate and low in the rest of the months. In sum, the geographical mix is suitable for the development of hybrid projects in the state.

Need for hybridisation Hybridisation will lead to cost reduction for developers owing to the efficient utilisation of land and transmission infrastructure. This will further lower the wind and solar tariffs, which will drive renewable energy uptake. While Gujarat has been a power surplus state since 2009, power deficit during the peak summer season is a common trend in the state. Hybrid power projects can resolve this problem and support the growing industrial base in the state with cleaner energy. Moving forward, hybridisation is also crucial for the adoption of smart grids and electric vehicles. In light of the future energy needs of the state, the launch of the Gujarat Wind-Solar Hybrid Policy is timely and apt. ■

Key features of the Gujarat Wind-Solar Hybrid Policy, 2018 Features Implementation strategy Type A (Brownfield projects) i. Configurations Type B (Greenfield projects) i. Configurations Power evacuation Type A i. Full capacity ii. Capacity margin Type B Tariffs Type A Type B Metering Type A Type B

Details – Permission is granted only for AC integration, which would be carried out at the pooling/sending-end substation for wind and solar systems separately. In addition, separate meters and internal electric lines are mandatory for solar and wind. – Initially, AC integration and separate electric lines for wind and solar projects is provisioned. However, once a common RPO and tariff is formulated, AC or DC integration with common electric lines will be allowed. Currently, there are no relevant DC metering standards. – Transmission charges are not applicable to projects with open access when injection of additional power is restricted to the rated capacity. However, no credit will be given to the developer if the hybrid generation exceeds the capacity limit. – Transmission charges will be applicable, if developers inject power over and above the open access already granted. Developers will also pay for the augmentation in the transmission system. – Transmission charges are applicable if developers inject power into the grid. In addition, dedicated lines up to the receiving-end substation must be set up at the developer’s own cost without exceeding the capacity of the existing transmission lines/substation. – Discoms may purchase power to meet their RPOs in compliance with the respective power purchase agreements with Gujarat Urja Vikas Nigam Limited. Tariffs will be determined by discoms through separate competitive bidding or reverse bidding (if required) for wind and solar. – Initially, tariffs will be determined as per the process for Type A projects. However, discoms should conduct reverse bidding on a single common hybrid tariff when it gets evolved. – Energy generation will be measured at a 15-minute interval by installing availability-based tariff meters at the pooling/sending-end substation of GETCO as well as on each wind turbine and solar PV system. – For new projects, separate meters for wind turbines and solar PV systems need to be installed as different solar and wind tariffs and RPOs are preva lent in the market. A common meter will be put in place once a common hybrid tariff and RPO is determined.

60 ● Renewable Watch ● August 2018

SOLAR-WIND HYBRIDS

Bridging the Gap Case for solar-wind hybrids with storage solutions By Ashay Abbhi

he pursuit to resolve the challenges in the Indian renewable energy sector has given rise to many innovative solutions, especially in the wind and solar energy segments. The complementarities of the two technologies harnessed through hybrid power plants, have emerged as a solution. Coupled with energy storage, these solar-wind hybrid plants can seamlessly supply power round the clock with much greater control as compared to plants without storage. In light of the country’s need for better grid integration, the recently released National SolarWind Hybrid Policy by the Ministry of New and Renewable Energy (MNRE) permits the addition of battery storage to any solarwind hybrid power plant. It is interesting to note that while the initial investment for solar-wind hybrids plus storage will be much more than that for only solar plus storage plants, the resulting higher quantum of energy generated and availability of better quality power could greatly enhance the cost benefits of the storage system.

Cost-benefit analysis The analysis of solar-wind hybrid plus storage in comparison to only solar plus storage power generation systems highlights a significant cost benefit for the former. With hybrids, the added wind component has a significant impact on savings in terms of a reduction in the size of the storage component. Assuming that a typical solar energy plant generates power for eight hours a day, storage would be required for 16 hours in order to make electricity available throughout the day.

Adding a wind energy component to this system brings the typical daily generation up to 16 hours (wind energy generation is more effective during the evening and night). As a result, the storage component would be required only for eight hours a day, thereby reducing the cost of storage by about half of that of only a solar plus storage system. Moreover, as solar-wind hybrids are more suitable for states with high wind speeds, the wind energy generator there would be more efficient, further reducing the size of the solar and storage components. Energy storage essentially helps in decreasing the variability of renewable energy generation. Therefore, the complementarities achieved by using solar and wind energy together are further enhanced when feeding power into the grid. For decentralised systems, storage acts as a regulating mechanism that helps control the storage and release of power according to the time of day. For instance, for a solar-wind hybrid microgrid installed at a remote off-grid location, the storage component can store power during peak generation and low demand (typically during the day) and provide power during peak demand (from evening to night), especially on cloudy or low wind days.

Recent strides The biggest challenge in the adoption of energy storage has been its high cost. However, with the proliferation of electric vehicles, the use of storage technologies is likely to go up, driving down costs in the

TECHNOLOGY FOCUS process. Globally, renewable project developers have already started experimenting with storage-based hybrids. The inclusion of storage capacity in recent government tenders in India is also a testimony to its practicality and cost benefits. The Andhra Pradesh government is planning to release a tender for a hybrid plus storage project with 120 MW of solar, 40 MW of wind and 20-40 MWh of storage in 2018-19. Meanwhile, Kerala’s Agency for Non-Conventional Energy and Rural Technology has been working on a pilot project to set up a plant with 3 MW of solar and 4 MW of wind capacity along with battery storage. In January 2018, the Solar Energy Corporation of India (SECI) invited expressions of interest to develop a 160 MW solar-wind hybrid plus storage project in Ramagiri district of Andhra Pradesh. In May 2018, SECI announced a plan to tender 2.5 GW of solar-wind hybrid projects, with a specific component for installing any energy storage technology with the plants.

Challenges and outlook The policy infrastructure for solar-wind hybrids plus storage is yet to be put in place. However, it is expected that more than the policies, it will be the falling cost of storage that will drive the market. Currently, storage component costs present the greatest hurdle in making the technology attractive. The physical space required by energy storage due to its bulkiness is another challenge. In a country like India, where land accounts for 10 per cent of the cost and 90 per cent of the problems, space constraints may hamper the growth of the storage market. Amidst such challenges, it is safe to assume that it will be a while before the hybrid plus storage market takes off. The benefits of the technology outweigh the challenges by a large margin. While it may take time to grow, solar-wind hybrids plus storage are being pushed as a technology of the future. There are several global examples and best practices for developers in India to follow to create demand, which would lead to a reduction in storage costs and further uptake of the technology. ■ August 2018 ● Renewable Watch ● 61

SPOTLIGHT

EPC FOR RENEWABLES

Solar EPC Trends Emergence of end-to-end players By Khushboo Goyal and Anukriti

1,224.33 MW of installations in 2017-18. It is followed by Mahindra Susten with a market share of 3.23 per cent and Tata Power with 2.78 per cent. Interestingly, the installed capacity of Sterling and Wilson is significantly higher than the combined capacity of the other two players. A similar trend was seen in 2016-17 as well, with the three leading contractors remaining the same. However, due to the volatile nature of the solar EPC market, many contracting firms that held large market shares in 2016-17 are not even present in the top 10 ranking for 2017-18.

Evolving solar EPC market Solar EPC involves project design, civil works, procurement and installation of equipment, and construction, commissioning and handover of the project to the end user or owner. However, cost optimisation has broadened the scope of EPC contracts, so that EPC now overlaps with turnkey. Thus, apart from basic EPC services, the contractor is responsible for obtaining approvals and providing operations and maintenance (O&M) services as per the contract.

s the country moves towards achieving its 100 GW solar capacity target by 2022, the segment is beginning to witness increased capacity additions. The total installed solar power capacity has reached 23 GW as of June 2018, increasing at a compound annual growth rate of 20 per cent from 2013-14 to 2017-18. This rapid development is supported by aggressive competitive bidding and declining equipment prices, which have led to a rapid decline in solar power tariffs. To keep pace with these changes in the solar power segment, the engineering, procurement and construction (EPC) industry is also evolving rapidly.

to do the same. As per BRIDGE TO INDIA, the share of self EPC installations was about 50.59 per cent in 2017-18, translating into 4,639.61 MW of solar capacity against the total of 9,171 MW installed during the period. Amongst EPC players, Sterling and Wilson has the largest market share of 13.35 per cent, accounting for

EPC contractors’ market share (2017-18) (%) Mahindra Susten: 3.23 Tata Power: 2.78

BHEL: 1.73

EPC market share With the decline in solar tariffs, cost optimisation has become a major concern for developers. More and more developers are opting to carry out their own EPC, instead of hiring a contractor 62 ● Renewable Watch ● August 2018

Sterling & Wilson: 13.35

Juwi: 2.30 L&T: 2.08 B-electric: 2.00 Others: 18.77

Gamesa: 1.64 Rays Power Experts: 1.53 SelfCoal: EPC:89.3 50.59

Source: BRIDGE TO INDIA

As per the Central Electricity Regulatory Commission, the cost of solar EPC for a utility-scale solar power project is around 79 per cent of the total project cost. EPC costs have also been declining as a result of the cost-cutting measures being adopted by developers to improve their margins. This decline in EPC prices can also be attributed to the rise in number of players in the market, all offering these services at competitive prices. Stand-alone EPC firms are suffering due to a shrinking customer base as larger developers are building their own internal EPC capabilities to improve project viability. Therefore, stand-alone EPC firms are diversifying their operations to stay viable. The larger ones are building their own generation capacities to leverage their expertise in project implementation. This is a logical step for solar EPC players as the operational complexity of such projects is much

SPOTLIGHT

EPC FOR RENEWABLES

Key solar EPC tenders by central and state agencies between January 1, 2018 and August 1, 2018 Tendering agency

Tendered capacity (MW)

Month

Location

State

Utility SECI (on behalf of the Military Engineer Services) SECI (on behalf of Singareni Collieries Company Limited) SECI (on behalf of Defence Research and Development

3 150 10

July 2018

Tangtse and Durbuk, Leh

Jammu & Kashmir

August 2018

Various locations of Singareni Collieries Company Limited

Telangana

May 2018

Defence Research and Development Organisation

Karnataka

Organisation)

premises, Kolar

NTPC Limited

May 2018

NTPC premises, Kayamkulam

Kerala

NTPC Limited

June 2018

Ramagundam

Telangana

Central Electronics Limited (CEL) CEL CEL

April 2018

Across Maharashtra

Maharashtra

100

June 2018

Across Maharashtra

Maharashtra Maharashtra

June 2018

Sangli district, Maharashtra

National Hydroelectric Power Corporation

260

July 2018

Gaya and Khagaria districts

Bihar

Airports Authority of India

1.2

April 2018

Lal Bahadur Shastri International Airport, Varanasi

Uttar Pradesh

Tehri Hydro Development Corporation India Limited

100

March 2018

Across Uttar Pradesh

Uttar Pradesh

West Bengal Renewable Energy Development Agency

June 2018

Nadia district

West Bengal

West Bengal State Electricity Distribution Company Limited

January 2018

Across West Bengal

West Bengal

Total

749

Rooftop CEL

February 2018

Power Grid Corporation of India Limited premises

Across India

May 2018

Nagpur

Maharashtra

Gujarat Energy Development Agency

125

June 2018

Across Gujarat

Gujarat

Total

172 June 2018

Rajiv Gandhi combined cycle power plant, Kayamkulam

Kerala

February 2018

Raw water pond No. 3 of Sagardighi thermal power

West Bengal

Nagpur Municipal Corporation

Floating solar NTPC Limited West Bengal Power Development Corporation Limited

22 5

project, Murshidabad district Total

Canal-top Irrigation and Water Resource Department, Uttar Pradesh

100

June 2018

Narainpur Pump Canal, Mirzapur district; Augasi Pump

Uttar Pradesh

Canal, Banda district; LGC and PLGC, Bulandshahar district Total

100

Solar plus storage NLC India

March 2018

South Andaman (Attam Pahad, Dolly Gunj)

Andaman & Nicobar Islands

Total Grand total (utility, rooftop, floating solar, canal-top

20 1,068

and solar plus storage) SECI: Solar Energy Corporation of India Source: Renewable Watch Research

lower than that of other power projects. The smaller EPC firms that do not have the financial capability for project development are focusing on rooftop solar projects and captive projects to sustain themselves.

The way forward Like in other mature segments of the po-

wer industry, the consolidation trend is a strong feature of the solar industry as well. The segment has witnessed several mergers of late as both developers and contractors try to expand their portfolio in this highly competitive environment. Going forward, EPC companies offering end-to-end expertise (from concept to

commissioning) along with O&M services will be profitable ventures. Amongst these, the companies that focus on reducing costs and increasing scale will be able to sustain themselves in the years to come, while others face the inevitable risk of getting acquired by more profitable ventures. ■ August 2018 ● Renewable Watch ● 63

SPOTLIGHT

EPC FOR RENEWABLES

Changing Business Models Competitive bidding regime disrupts the wind EPC market By Ashay Abbhi

he adoption of competitive bidding for project allocation and tariff determination completely disrupted the wind power market in 2017. Tariffs plummeted to Rs 2.44 per kWh, putting huge pressure on developers and operators to reduce project costs in order to improve their dwindling margins. It has also disrupted the business models that were earlier prevalent in the market, including the engineering, procurement and construction (EPC) contracting process. The EPC model of wind power development involves a contractor carrying out the detailed design of the plant, procuring all equipment including wind turbines, erecting the tower and commissioning the plant. In this model, the EPC contractor bears the risks associated with plant performance, price and time overruns as well as the interface risks arising with subcontractors. The contract is designed in a way that the developer is entitled to compensation in case of any deviation from the mutually agreed parameters. The high-risk profile of EPC contracts makes them typically more expensive than other business models, wherein the risks are assumed by the developer. One of these is the multi-contract model, wherein the developer signs separate contracts with expert service providers and assumes all execution and operational risks. This helps reduce costs but requires a highly experienced developer to smoothly manage all components of project development. Another model involves the formation of a supplier consortium (non-legal entity), which signs a single contract with the developer. This type of model has a better risk profile than the EPC contract model.

64 ● Renewable Watch ● August 2018

Changing status In the competitive bidding regime, the nature of project development is expected to change. Business models that involve higher expertise and lower costs will become prevalent in the market, thus increasing developer margins. The EPC models as we know them may be altered to bring down costs. While the advantages of contracting an EPC company outweigh the high costs involved, lower tariffs will push developers to seek more competitive prices. In addition, increasing the project development base to meet the 60 GW target will result in growing competition. This will further intensify the EPC market, creating a high-entry, low-exit barrier space. According to Mahesh Makhija, director, renewables, CLP India, “The feed-in tariff regime implies multiple inefficiencies in the entire value chain. With the auctions being overseen by the Solar Energy Corporation of India, risks will be priced differently, eventually lowering the cost estimates. While the government is quite happy about the decline in tariffs, EPC companies and developers have been adversely impacted, with the biggest blow

being felt by turbine manufacturers.” The market for pure-play EPC companies is set to get further restricted in the competitive bidding regime. The manufacturers may now choose to function purely as vendors and may not compete for projects in the auctions. This is due to the multitude of regulations in place for companies that can compete in auctions, such as a 50 MW block cap, besides financial constraints. Therefore, for an entity without project development as its core competency, it may not be economically viable to compete for these projects at diminished rates of return. Consequently, the EPC services that manufacturers may have taken from core contractors to develop projects earlier will no longer be required, as independent power producers (IPPs) typically have in-house EPC capabilities that help them cut costs and increase margins.

Impact on industry structure The industry structure is expected to change significantly over the next five years, and indicators regarding the possible alterations have begun to show. In the competitive bidding era, equipment suppliers may seek to integrate backwards

SPOTLIGHT

EPC FOR RENEWABLES

and manufacture components themselves instead of relying on smaller component suppliers. This could trigger a market consolidation for this part of the value chain. The value chain is also likely to expand into the services market. A third category of players may emerge to provide smaller services such as third-party sale facilitation, pure operations and maintenance in the form of software services and automated monitoring, among others. A new segment of EPC contractors could emerge to fill the gap between manufacturers and new IPPs that do not have inhouse EPC capabilities yet. This would be akin to the solar segment, wherein new and small developers use EPC services to develop projects. The equipment manufacturers, in this case, could function as pure-play vendors.

Other EPC models Multilevel contracting is an alternative to pure-play EPC contracts. The responsibilities in this model are divided amongst various participants, thus spreading out the risks associated with the project. However, the risk profile remains high as the number of companies involved in the project increases. Nevertheless, this can help significantly reduce project costs and increase returns for developers. In this model, the developer chooses differ-

ent contractors for various tasks and functions as the focal point of contact for all the stakeholders involved. Thus, the developer should be entirely committed to tackling the challenges associated with each of the service providers. The developer’s involvement here becomes critical to the success of the project, especially during the design and construction phase. This route is typically preferred by more experienced developers. However, as newer developers enter the market by quoting winning bids, multilevel contracting may no longer be a favourable way of developing projects. With stricter timelines, coordinating with multiple stakeholders may lead to time and cost overruns. In the European offshore wind power market, the multilevel contracting model is giving way to fewer contractors in order to reduce the risks of overshooting the timelines.

Emerging markets There is significant potential for EPC companies in the two emerging wind power markets – repowering and offshore wind. During the early stages of wind power development, low capacity turbines were installed at high potential wind sites. These were developed by diversified players with limited core expertise. These turbines are now set to undergo repowering as the country looks to increase the share

Component suppliers

Project developers

OEMs and EPC

Current market size

Pre-bidding structure

Evolving industry structure in the competitive bidding regime

IPPs Diversified players CPPs

Post-bidding structure

Likely Extended Value Chain

Equipment suppliers Equipment manufacturers are likely to integrate backwards to expand their market as forward integration may not be an economically feasible alternative

Project developers IPPs

Third-party sale Diversified players CPPs

Visible change in market segment size

Source: Renewable Watch Research

66 ● Renewable Watch ● August 2018

Services

O&M service providers EPC contractors

of wind power in its energy mix. This is likely to open up a market for EPC players as the diversified companies seek to repower their old turbines. Offshore wind power presents another opportunity for EPC service providers. Over the past year, developers have shown interest in the segment, which could lead to project development in the near future. However, there is limited expertise available in the country for offshore wind development. This could be a potential high revenue market for the EPC segment, which has the capability to develop bespoke solutions.

Future outlook As the Indian wind power industry moves to a competitive bidding regime entirely, the EPC market is likely to face a period of uncertainty. The capacities being tendered are higher than ever before, but falling tariffs have left no room for the use of high-cost in the project. As a result, IPPs are looking to develop in-house EPC capabilities to reduce costs. The possible market for pure-play EPC contractors in the wind power segment may be to tap the gap created by newer developers entering the market with little project development experience and deep pockets. Moreover, entities that do not have wind power generation as their core business will continue to seek services from these contractors. However, with stringent tender guidelines, the share of such diversified companies is expected to decrease. Further, EPC contractors are set to gain more from the increase in project sizes to be developed as opposed to the greater number of contracts available in the past. Beyond 2022, when the 60 GW target would have been met, the wind power market is expected to have a low levellised cost of energy. While projects will continue to be awarded through competitive bidding, the quantities will be much greater as the market is expected to have further matured by then. ■

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he recent technological advancements have led to a large scale adoption of solar PVon a global scale. Equipment prices, especially module prices, have fallen drastically due to increasing competition worldwide. Amidst this,India has evolved into a major solar PV market, with the government focusing on clean energy production, reducing dependence on coal and emission reduction. With installations ofabout 9.5 GW solar projects in 2017-18, the country is expected to install 2 GW of solar PV capacity in the Commercial and Industrial(C&I) segment in 2018-19. EPC giants like TATA Power, Sterling & Wilson and others are making tremendous contributions in building a greener future for India due to their focus on C&I projects. For instance, Mangalore Refinery and Petrochemicals Limitedwas reportedto havecommissioned the largest solar power project in a refinery site. The 6.063 MWp project, is spread across 34 rooftops within the refinery premises, comprising both Reinforced Cement Concrete (RCC)and sloping sheet steel roofs. It generates more than 24,000 units per day amounting to more than 8.8 million units per annum.Furthermore, Cochin International Airport Limited is also completing its latest phase of the 10MW capacity solar project that guarantees 100 per cent renewable energy supply.

atemarket opportunities for low-cost inferior products.Huang Min, CEO of GoodWe says, “even in the faceof avicious price war, we can never follow this trendof providing low-cost inferior products at the expense of the long-term development of both the company and the industry.The company’s philosophy is to always create win-win partnerships by identifying and integrating the most advanced components and techniques available”. GoodWe’s revenue in 2017-18 was $200 million with an average monthly sales volume of 30,000 pieces, a 100 per centincrease, when compared with 2016-17.According to a report on global inverter shipments by IHS Markit, the leading source of information, insight and analytics in critical areas,the company ranked 8th in the World PV inverter market for2017.

GoodWe string inverters are being used in these C&I projects. GoodWe MT Series inverters (50-70kW) are most suitable for the Indian C&I solar market, as they can be successfully deployed on large scale commercial rooftops as well as ground-mounted solar PV plants. These inverters reduce the installation costs further while their power boost function provides higher yield and a faster Return on Investment (ROI). GoodWe is happy to witness the rapid progress of India’s PV industry. However, with so many equipment manufacturers flocking to India, manufacturers’ margins have been cut to the bone due to the vicious price war between them. This will disrupt the healthy growth of the Indian PV industry as well as creWith a significant growth in supply to the Indian market, GoodWe is aware of the importance of offering an unparalleled after-sales service to ensure long-term business. The company has already set up its Indian office in Mumbai and has built up a local service team of 15 people (till date) and is expanding its team further. Huang Minremarks”we are delighted to be awarded the huge megawatts of solar rooftop capacitiesfrom TATA Power, Sterling & Wilson and other big EPCs. We will continue to focus on increasing our presence in terms of development and construction activities in India while ensuring excellent quality and service.”

STATE FOCUS

HIMACHAL PRADESH AND MAHARASHTRA

Fresh Fillip Himachal Pradesh focuses on promoting SHP and solar projects By Sarita Brara

ydropower generation is all set to pick up pace in Himachal Pradesh with significant changes in the hydro policy announced recently by the state government. Although small-hydro power (SHP) has been the mainstay of harnessing renewable energy in Himachal Pradesh, long-awaited clearances at various stages, local issues, escalating costs and uncertainty regarding financial viability have been ailing this segment. In many cases, clearances take up to 20 years, which has been putting off many developers. Many projects have stalled as there have been no bidders despite repeated advertisements. The changes made in the new policy are expected to revive the stalled projects and attract developers to

68 â&#x2014;? Renewable Watch â&#x2014;? August 2018

invest in new projects. The major changes include mandatory purchase by Himachal Pradesh State Electricity Board Limited (HPSEBL) of the entire power generated from projects with a capacity of up to 10 MW, commissioned after the notification issued in May 2018. The tariff will be determined by the Himachal Pradesh Electricity Regulatory Commission (HPERC) on the date of commissioning of the project and not the signing of the implementation agreement, provided the project is completed within the stipulated timeline. Deferring the 12 per cent free power for the first 12 years in the case of already allotted projects is another positive highlight of the policy. It also offers ratio-

nalisation of royalty rates for the allotment of new projects. Projects of up to 10 MW for captive use of power for existing or new industrial units within the state will be allocated without competitive bidding. Further, no wheeling charges/open access charges will be applicable for hydropower plants up to 25 MW capacity, thereby enabling them to sell power on competitive rates outside the state as well. The state is also taking a number of initiatives in the solar power space. In order to promote solar rooftop projects, in June 2018, the state government announced a subsidy of Rs 4,000 for generating 1 kW of solar power, over and above the subsidy provided by the central government.

STATE FOCUS

HIMACHAL PRADESH AND MAHARASHTRA Ground-mounted solar power projects (grid connected) of 10 MW have been commissioned in the state on a commercial basis under the Ministry of New and Renewable Energy’s (MNRE) renewable purchase obligation scheme in the previous and current fiscal years. These include a 5 MW plant commissioned in 2018-19 at Nand in Solan district and a 1 MW project in Bhogpur Simblewala in Sirmour district. Another 4 MW of capacity was commissioned in 2017-18 at Johu in Hamirpur district. Two other plants of 2 MW at Jodia village in Una and a 5 MW plant near Naina Devi are under construction. Other projects aggregating 8 MW are awaiting clearances. For these, tariffs of Rs 5.25 to Rs 5.31 per unit were agreed upon under the power purchase agreement signed with HPSEBL.

Status of 746 SHP projects of up to 5 MW capacity Description

No.

Capacity (MW)

Projects commissioned

310.50

Projects under construction

110.24

Projects at different stages of clearances

162

425.21

S&I in progress

287

548.54

46.80

TEC accorded but implementation agreement to be signed DPR with HIMURJA

0.00

DPR with Directorate of Energy

154

299.00

Total

746

1,740.24

Source: Himachal Pradesh Energy Development Agency (HIMURJA)

Status of projects of up to 25 MW Description

No.

Projects commissioned (private sector)

Capacity (MW) 180.90

Projects under construction (private sector)

268.90 155.55

Projects commissioned (state)

Shimla and Hamirpur were declared solar cities by the MNRE and their master plans were approved in 2013-14. In Shimla, a 15 kWp solar power plant has been installed at the Panchayat Bhawan and a 20 kWp solar power plant installed at the old bus stop. Over 1,300 solar photovoltaic (PV) home lights have been provided to slum areas in the city. However, solarisation under the programme is yet to take off in Hamirpur.

Projects under construction (state)

Nil

Projects at various stages of obtaining clearances (private)

555.50

92.00

Although Himachal Pradesh has set a target of installing 1,000 solar water pumping systems for irrigation, the scheme is yet to take off. As far as other sources of renewable energy are concerned, Himachal Pradesh is significantly behind. Now, waste-to-energy is an area that is being pursued, with more than half a dozen project proposals. Meanwhile, wind energy does not have much scope in Himachal Pradesh as the state has very low wind power density.

Grid-connected utility-scale solar projects

The main focus within the renewable energy space will be SHP as it still has a vast potential to be tapped, says Tarun Kapoor, additional chief secretary, multi-purpose projects and power, non-conventional energy sources, forest, environment, science and technology, Himachal Pradesh government. ■

Projects at various stages of obtaining clearances (state) Source: Directorate of Energy, Himachal Pradesh

Solar PV power plants Cumulative achievement till March 31, 2018

During 2018-19 (as of May 31, 2018)

Cumulative achievement up to May 31, 2018

Off-grid solar plants

1,700.5 kWp

Grid-connected rooftop solar plants

1,244.5 kWp

168 kWp

1,412.5 kWp

4 MW

6 MW

10 MW

Solar PV applications Cumulative achievement till March 31, 2018 Solar PV domestic lights (No.) Solar PV street lights (No.) Solar PV lanterns (No.)

During 2018-19 (as of May 31, 2018)

Cumulative achievement up to May 31, 2018

26,844

1,19,517

166

1,19,683

53,899

466

53,899

Solar thermal application Cumulative achievement till March 31, 2018

During 2018-19 (as of May 31, 2018)

Cumulative achievement up to May 31, 2018

19,43,870 lpd

Box-type solar cookers

37,473

37,479

Dish-type solar cookers

788

1,026 M

1,026

Solar water heating systems of 100 lpd and above

Solar steam cooking system lpd: litres per day

August 2018 ● Renewable Watch ● 69

STATE FOCUS

HIMACHAL PRADESH AND MAHARASHTRA

Green Outlook Maharashtra moves in the right direction By Khushboo Goyal

n Maharashtra, 149,761 MUs of energy demand was recorded in 2017-18, the highest among all states in the country. To cater to this demand, the state has significantly improved its power supply situation in the past few years. Maharashtra reported an energy deficit of only 0.2 per cent in 2017-18, a testimony to the resolution of the state’s demand-supply mismatch problem. The state authorities are focusing on increasing energy generation, particularly from renewable energy sources. In fact, the total energy generated in the state grew by 5.26 per cent from 201617 to 2017-18. Maharashtra also has the highest installed power capacity (43 GW as of June 2018) in the country. Out of the total installed power capacity, roughly 71 per cent or 30.5 GW is contributed by thermal sources of power, 19.3 per cent by renewable energy and the re-

70 ● Renewable Watch ● August 2018

maining capacity comes from large hydro and nuclear power. The renewable energy capacity in Maharashtra has increased by an impressive 7.8 per cent, from 7.7 GW in June 2017 to 8.3 GW in June 2018, which is the third highest installed renewable capacity in the country after Karnataka and Tamil Nadu. The state government is laying strong emphasis on the greater uptake of renewables as seen in the recent solar and wind auctions conducted by the state discom, and the new initiatives for promoting solar irrigation and rooftop solar.

Solar on the rise While Maharashtra’s solar energy potential of 64 GW peak is among the highest in the country, the state was a late mover in the solar energy segment, unlike other states with a large solar potential such as Rajasthan, Gujarat, Andhra Pradesh, Tamil Nadu and Telangana. As a result, only 1,017 MW

of solar power has been installed as of March 2018, against the targeted capacity of 11,926 MW till 2022. However, many believe that this delay has proven to be in the state’s favour, which is now leveraging the declining solar power prices to meet its target capacity. More than 50 per cent of the total solar capacity in the state has been installed after March 2017. Utility-sscale solar: While Maharashtra has been able to meet its overall renewable purchase obligation (RPO) targets over the years, it has fallen short of achieving its solar RPO targets time and again. To overcome this shortfall, several auctions have been conducted in the state. With the upcoming capacity, the state might be in a position to achieve its solar RPO targets. Maharashtra State Electricity Distribution Company Limited (MSEDCL), for instance, held an auction for 1 GW of solar projects in December 2017. However, due to limited response, the capacity was retendered in April 2018. The retendered capacity was oversubscribed by 450 MW, on account of recent clarifications from the government on the new duties to be levied. The lowest tariff of Rs 2.71 per kWh was quoted by JLTM Energy India Private Limited and Mahoba Solar (UP) Private Limited (Adani).

STATE FOCUS

HIMACHAL PRADESH AND MAHARASHTRA The other winners, ReNew Power, ACME Solar Holdings, Tata Power Renewable Energy Limited and Azure Power, quoted a tariff of Rs 2.72 per kWh. The tariffs quoted in this auction were lower than those discovered in NTPC’s recent 750 MW solar auction, a deviation from the usual trend as NTPC’s perceived financial risks are lower.

Cumulative grid-connected renewable energy capacity in Maharashtra (as of March 2018) Source

Capacity (MW)

Wind

4,775.51

Small hydro

304.53

Bagasse-based cogeneration

MSEDCL has also recently floated a tender for 1 GW of solar projects to be developed under the Mukhyamantri Saur Krushi Vahini Yojana. Meanwhile, expressions of interest have been invited from prospective solar project developers to set up a 1 GW floating solar photovoltaic (PV) project on the Ujjani Dam reservoir in Solapur.

Municipal solid and liquid waste

Solar irrigation: Maharashtra has launched the Mukhyamantri Saur Krushi Vahini Yojana. Under this scheme, agricultural feeders will be powered through solar energy instead of distributing solar pumps to farmers. The scheme aims to provide power to farmers as and when required and not for a limited time period. Dr Vipin Sharma, director general, Maharashtra Energy Development Agency, explains, “There is a huge non-performing asset base in the form of 4.4 million (approximately) agricultural feeders in the state due to non-payment to discoms. This scheme serves the dual purpose of providing quality power supply to farmers as well as reducing the burden on discoms by powering agricultural feeders through solar.”

Bidder

Solar parks: Three solar parks of 500 MW each have been sanctioned in Maha-

1,948.85

Biomass power

215.00 3.00

Industrial waste

34.71

Solar

1,017.45

Total

8,299.05

Source: Maharashtra Energy Development Agency

Successful bidders in MSEDCL’s 500 MW wind auction Tariff (Rs/kWh)

Adani Green Energy (MP)

2.85

75.0

KCT Renewable Energy

2.85

75.0

Inox Wind Infrastructure Services

2.86

50.0

Mytrah Energy (India)

2.86

100.0

Hero Wind Energy

2.86

75.6

Torrent Power

2.87

124.4*

* Torrent Power bid for 146 MW of capacity but was awarded 124.4 MW. Source: MSEDCL

rashtra, of which the Dondaicha Solar Park is being developed by Maharashtra State Electricity Generating Company Limited, while the Sai Guru Solar Park and the Patoda Solar Park are being developed by private companies Sai Guru Mega Solar Park Private Limited and Paramount Solar Power Private Limited respectively. However, the development of these solar parks has been slow. According to Sharma,

Successful bidders in MSEDCL’s 1,000 MW solar auction Bidder

Tariff (Rs/kWh)

Capacity (MW)

JLTM Energy India (Technique Solaire)

2.71

Mahoba Solar UP (Adani)

2.71

200

ReNew Power

2.71

250

ACME Solar

2.71

250

Tata Power Renewable Energy

2.72

150

Azure Power

2.72

130*

*Azure Power bid for 150 MW of capacity but was awarded 130 MW. Source: MSEDCL

Capacity (MW)

“Solar parks are complicated to develop and implement due to land availability and power evacuation issues, as well as delays in getting approvals. Also, unlike the previous schemes of the Ministry of New and Renewable Energy (MNRE), its new solar parks scheme does not direct discoms to buy 20 per cent of the power generated in solar parks. Hence, a solar park is on its own as far as competitive bidding for its product is concerned.” Rooftop solar: Maharashtra has emerged as a leader in the rooftop solar space, leaving behind the states of Tamil Nadu, Rajasthan and Karnataka. More than 75 per cent of the total solar rooftop projects in the state have been installed for the industrial consumer segment as per an analysis by BRIDGE TO INDIA, while the residential consumer segment has not been active in rooftop solar uptake. Explaining the challenges faced in rooftop solar development, Sharma remarks “There is an August 2018 ● Renewable Watch ● 71

STATE FOCUS inherent reluctance on the part of discoms to offer net metering easily even when commercial and industrial consumers wish to go for grid-connected rooftop solar. At the same time, availability of rooftops is a basic constraint for the domestic rooftop programme, particularly in housing societies where the choice to install solar plants on rooftops (a common property) lies with the entire society and not a few willing participants.”

HIMACHAL PRADESH AND MAHARASHTRA

New regulations

Renewable generation mix in Maharashtra (April 2017-January 2018) (%)

Wind: 61

Solar: 9

Renewed focus on wind Among all the states, Maharashtra has the third highest wind power potential of 45 GW, of which it has been able to develop only 4.8 GW. Due to high feedin tariffs (Rs 3.82-Rs 5.56 per kWh) and zone-based tariffs in favour of developers, capacity addition remained high initially. However, policy uncertainties and transmission constraints slowed down project development. Less than 200 MW of capacity has been added since 2016 (120 MW in 2016-17 and 13 MW in 2017-18) as the state discoms did not sign any new power purchase agreements. Going forward, with the recent wind auctions conducted by MSEDCL, the situation is expected to improve. MSEDCL’s recent 500 MW wind capacity auction to fulfil its non-solar RPO saw the lowest quoted tariff of Rs 2.85 per kWh.

72 ● Renewable Watch ● August 2018

Biopower: 25

Small hydro: 5 Source: Ministry of New and Renewable Energy

This was 17 per cent higher than the bid price of Rs 2.44 per kWh received in the 2 GW Tranche III of the Solar Energy Corporation of India auction. Adani Green Energy and KCT Renewable Energy Private Limited quoted the L1 tariff of Rs 2.85 per kWh, while the other winners, Inox Wind, Mytrah Energy and Hero Wind Energy Private Limited, quoted a tariff of Rs 2.86 per kWh. Right after the first auction of March 2018, MSEDCL announced its second wind tender for 250 MW of capacity in April 2018. The Maharashtra Electricity Regulatory Commission (MERC) has recently approved the tariff of Rs 2.52 per kWh proposed by MSEDCL for the short-term procurement of wind power under this tender.

In view of increasing renewable energy integration into the grid, MERC issued final regulations for forecasting, scheduling, and deviation settlement of wind and solar power generation in the state, in July 2018. As per the regulations, solar and wind developers are liable to pay deviation charges for overinjection as well as underinjection of power into the grid. In June 2018, another clarification was issued by MERC stating that the simultaneous use of net metering and open access is not permitted to generators, and net metering benefits are limited to capacities of up to 1 MW. Another recent ruling by MERC clarifies that short-term and medium-term open access in the existing distribution system will be granted only if the resultant power flow can be accommodated. These recent developments mark the evolution of the state’s renewable sector towards a more mature market with forward-looking regulations to avoid complications in the future.

The way forward Maharashtra has been allotted targets of 11,926 MW for solar power, 7,600 MW for wind, 50 MW for small-hydro and 2,469 MW for biomass-based power by the MNRE. With a small percentage of the targeted capacity installed till date, the state needs to adopt a fast-paced strategy to get maximum benefits of the state’s high renewable potential. The state is planning to make significant investments in renewable capacity addition and storage systems to meet the growing demand for clean energy. A strong advocate of energy storage systems, Sharma remarks, “With growing focus on solar and wind energy, credible energy storage systems are required to firm up power and fill the gaps created by these intermittent generation sources. Renewable energy uptake will not happen at the desired pace without proper storage systems, especially in rural and remote areas.” Going forward, state agencies will focus on grid modernisation to integrate and absorb renewable energy into the system. ■

Future of Solar O&M in India Changing Landscape, Growing Role of Digitisation and New Opportunities

India Infrastructure Research (publisher of Renewable Watch magazine) is currently developing and will soon release a special report on “Future of Solar O&M in India”. The report will cover information on the following areas:

Market Size by Segment

O&M Evolution

Emerging Role of Energy Storage

Solar O&M Cost Trajectory (2012-18)

Cost Breakup Analysis

O&M Company Profiles (5-8 profiles of key O&M players in India)

Digitisation and Automation at Plant Level z

vehicles and logistics

equipment and tools

overheads, personnel/manpower, digital

Cost Projections (2019-24) z

business model evolution and key cost considerations

impact of scale and impact of energy storage

future cost estimates

emerging role, applications and use case for the following: manpower and material management, automated monitoring and big data analytics, robotics, etc growing role of artificial intelligence and machine learning applications

AI field assistants and predictive analytics

key technology providers

industry perspective (views of key personnel from the solar O&M industry and technology providers on the growing role of AI, robotics and data analytics)

Emerging O&M Business Models

Terms of O&M Contracts

Key Challenges, Best Practices and Case Studies

Grid Management by O&M Players

Projected O&M Market Size (from 2019-20 to 2024-25)

The report is priced at Rs 60,000 (plus 18% GST) or USD 1416. However, we are offering a pre-publication discount. The price is Rs 54,000 (plus 18% GST) or USD 1274 for orders/payments received before or on September 7, 2018. The report will be available in a PDF format and is expected to release in September 2018.

To order a copy, please send a cheque or draft payable to “India Infrastructure Publishing Pvt. Ltd.” and mail to:

Raktima Majumdar Senior Manager-Information Products India Infrastructure Publishing Pvt. Ltd., B-17, Qutab Institutional Area. New Delhi - 110 016, India Tel: +91 11 45793069, 41034600, 41034601, Mobile: +91 8826127521 Fax: +91 11 2653 1196 Email: majumdar.raktima@indiainfrastructure.com

ep wr

WORLD VIEW

Wind Rich Offshore power hub to help meet Paris Agreement goals By Swarna Kesavan

he North Sea has witnessed significant offshore wind power activity in the past few years. With 11.2 GW of offshore wind capacity, the North Sea accounted for 60 per cent of the global offshore wind installed base (18.8 GW) and over 70 per cent of the European offshore capacity (15.8 GW) at the end of 2017. Offshore wind will provide a significant share of the renewable energy capacity needed by the North Sea countries to meet the Paris Agreement goals. By 2040, the North Sea offshore wind capacity is expected to reach 70-150 GW (and possibly 180 GW by 2045), accounting for around one-fifth of the European Union’s (EU) total power consumption. To achieve this goal, there must be a high degree of planning and coordination among the countries in the region.

tricity system for offshore wind in the North Sea – the North Sea Wind Power Hub (NSWPH). The NSWPH consortium partners are the transmission system operators (TSOs) of the Netherlands and Germany – Denmark’s TSO Energinet.dk, gas infrastructure company Gasunie and the Port of Rotterdam. In May 2018, the NSWPH presented its vision at the Clean Energy Ministerial held in Copenhagen, which was attended by the energy ministers of the largest economies (G20 countries) as well as Denmark, Norway, Sweden, Finland and the Netherlands. The NSWPH’s broad vision is to connect large-scale offshore wind power to a central hub (an artificial island) and create new energy highways and trade corridors among the North Sea countries. The partners have committed themselves to investigating the potential of the vision until mid-2019.

Given the experience so far and the future potential, five companies have collaborated to develop a large-scale European elec-

The overall plan is to follow an internationally coordinated roll-out (ICRO) instead of a nationally incremental roll-out (NIRO) to

accomplish the green energy transition, making it both feasible and affordable. This is proposed to be achieved through the construction of one or more hubs at a suitable location in the North Sea with interconnectors to bordering North Sea countries. The whole system will function as a hub for the transport of wind energy, an interconnection hub to the connected countries, a working hub for offshore wind developers and a location for possible powerto-gas (Power2Gas – P2G) solutions.

The project – Developers and developments In June 2016, TenneT developed a vision for building a large European electricity system in the North Sea, based on the hub-and-spoke principle. Subsequently, in March 2017, Energinet.dk entered into a trilateral agreement with the Dutch and German TSOs of TenneT to develop the project. The other two partners joined the consortium in September 2017 (Gasunie) and November 2017 (Port of Rotterdam). The two new partners bring relevant expertise on P2G, as well as port development and land reclamation. The NSWPH project can be divided into three components – hub and spoke, island and P2G. The modular hub-andspoke concept is the core of the NSWPH project and serves as an alternative to the current approach of connecting each offshore wind farm radially or directly to the national grids onshore as well as using point-to-point interconnectors. The main elements of this concept are an artificial island, wind farms including grid connection and interconnectors. Each hub could connect up to 30 GW of

74 ● Renewable Watch ● August 2018

WORLD VIEW wind power comprising 2,000-3,000 wind turbines. The hybrid nature of the hub will increase the efficient utilisation of a connection to the mainland from about 40 per cent (radial) to 100 per cent (hybrid). The project entails building an artificial island in the North Sea to host the wind power hub at a central location and in shallow waters with optimal wind conditions. The idea is to create a near-shore environment far out at sea. An artificial island can perform different functions such as supporting heavy electrical infrastructure components; providing a base for wind farm installation operation and operations and maintenance (O&M) activities; as well as support power conversion (such as P2G) and storage technologies. P2G is expected to lead to an improved business case for offshore wind farms connected to a hub as peak power generation could be used for conversion instead of being sold at a low market price or even curtailed due to possible interconnector constraints. This is possible as the cost of energy transmission and long-term storage in the form of gas is considerably lower per unit of energy than if transmitted and stored in the form of electricity. The power and gas supply systems together could boost the use of hydrogen (as a sustainable solution with numerous applications in industry and transportation) and could potentially be brought ashore through the existing offshore gas infrastructure.

Progress so far In November 2017, the NSWPH and a group of 30 industry representatives held a session at the WindEurope Conference in Amsterdam to discuss the NSWPH vision and solutions for the future offshore wind and onshore grid challenges. During this meeting, the first findings from detailed studies were also discussed. At least three preliminary studies have been performed so far. These include a preliminary desktop study entailing a quick scan of the geology and ecology in Denmark and parts of Germany; a quick scan

Potential offshore wind capacity per scenario and country (GW) Wind capacity

Netherlands

Germany

Denmark

Total

Capacity without any other function

110

Capacity with current function (2017)

Capacity with 10% of oil and gas (2035-40)

Note: The above outcomes are based on the assumption that it is possible to build 5 MW per square km on Dogger Bank.

Current functions include oil and gas, electricity and telecom cables, which use part of the area of Dogger Bank Sources: TenneT and; RHDHV

of ecological impacts on Dogger Bank in the territorial waters of the Netherlands and in general; and gap analysis ecological monitoring. The ecological quick scan was based on environmental impact assessments and appropriate assessments for offshore wind farms in the Netherlands and the UK as well as wind areas executed by Royal Haskoning DHV (RHDHV) and case study reports from the Netherlandsbased Institute for Marine Resources and Ecosystem Studies. Dogger Bank (an extensive isolated shoal in the North Sea) was chosen for the quick scan as a possible location for the power hub island as it is a shallow area in a windy region and could serve as the centre of the offshore high voltage grid. Dogger Bank has a water depth of 20-40 metres and its surface area (21,970 square km) can accommodate 110 GW of offshore wind capacity. The bank is almost 300 km long and is located in the British, Danish, German and Dutch parts of the Exclusive Economic Zones. The bank has not yet been designated as a wind energy area in the Netherlands, Germany and Denmark. However, in the UK, part of the area is designated and permits have been granted for four offshore wind farms with a total capacity of 1,200 MW. TenneT assigned RHDHV to prepare a report on Dogger Bank’s offshore wind capacity. According to this report, the most offshore wind capacity potential is available in the British and Dutch parts of Dogger Bank as these are much larger areas (refer Table).

Once 90 per cent of the oil and gas infrastructure is decommissioned in the coming decades, 11 GW of extra offshore capacity can be developed. Most of the platforms are situated in the UK’s part of Dogger Bank, which means that most of the additional capacity will be installed there. First results from the preliminary studies carried out by project partners are positive and indicate net socio-economic benefits of interconnectors to a NSWPH with associated uncertainties. An international approach (ICRO) will reduce infrastructure costs significantly (up to 30 per cent as per first calculations) and lead to competitive energy prices. ICRO development is step-wise and modular, and limits the risks for stranded assets. Through this approach, economies of scale can be achieved through the development of higher capacity solutions (150525 kV) and the development can be spread over several decades. The step-bystep development makes the solutions flexible and allows integration of future offshore innovations in transmission assets, wind farm design and O&M. Part of the cost reduction is achieved on account of hybrid connections for optimal use of cables under ICRO. Currently, wind infrastructure is radially connected to each individual country. There are separate interconnector cables between countries. The wind connector will combine the wind infrastructure and interconnector in one function. Additional benefits are anticipated through exchange among energy markets. The NSWPH is modelled as three price areas (the Netherlands, Germany and Denmark) August 2018 ● Renewable Watch ● 75

WORLD VIEW

Potential offshore wind capacity under various interconnection scenarios (GW) 181 Hub as an Island HVDC 525 kV Stand-alone HVDC 525 kV

143

Stand-alone HVDC 220 kV

Legacy HVDC 150-320 kV 104

Legacy HVDC 110-220 kV

64 33 21 6 6 9

2020 Sources: TenneT

11 4

27 10

7 50

12 10 11

13 11

13 9

11 6

8 2

2025

2030

2035

2040

2045

with a copper plate between them (market coupling between the areas) and wind capacity connected to their respective (national) price areas. A pre-feasibility study assessing energy system indicators and socio-economic trade benefits, excluding capex costs for interconnectors based on the Ten-Year Network Development Plan 2018 (TYNDP 2018) scenarios and renewable energy sources production increases, indicates that socio-economic benefits amount to about Euro 300 million per year in the case of a sustainable transition (ST 2040) scenario and Euro 900 million per year in the case of global climate action (GCA 2040). Under the ST scenario, targets will be reached through national regulation, emission trading schemes and subsidies and by maximising the use of existing infrastructure. GCA is based on the assumption of full speed global decarbonisation and largescale renewable energy development in both the electricity and gas sectors. In comparison to a near alternating current (AC) solution (as in the case of the Borssele area in the Netherlands) for offshore wind farms, the NIRO approach to a far offshore solution will result in an over 20 per cent hike in the costs while the ICRO approach will lead to about 7-10 per cent reduction in the levellised cost of electricity (LCOE). As reducing the total system cost is essen76 ● Renewable Watch ● August 2018

tial to facilitate large-scale offshore wind, all options to further reduce costs including an artificial island must be considered. The cost reduction potential of the artificial island depends on a balance between functionality and needs. It is necessary to explore the design, functional and location options of the island hosting a wind power hub. The technical feasibility of the islands far offshore has been determined for multiple locations and a detailed feasibility study was conducted for Dogger Bank. This included various aspects such as wave and surge conditions; extreme wind conditions; geotechnical data on subsoil composition for design specifications; evaluation of various layouts; living quarters; runway and its usability under local wind conditions; cable landings and high voltage direct current (HVDC) equipment; harbour; and revetment and sea defence design. Alternatively, a lean island (with minimal functionalities) provides cost-efficient support for electrical infrastructure only and can potentially reduce the LCOE by 10 per cent as compared to the business-as-usual scenario.

Industry feedback and challenges Based on the international consultation by the NSWPH, feedback and suggestions from the industry include maintaining high levels of transparency about the assumption to gain legitimacy for the project; undertaking a detailed study of all possible alternatives; being careful not to view the North Sea as the easy option to avoid

public criticism; and focusing on integral spatial planning. The integration of large amounts of variable renewable resources leads to strongly reduced levels of despatchable generation and thus increased use of flexibility options. A higher level of interconnectivity across the North Sea is needed for flexibility options and markets to function. Particularly, cost-efficient flexibility options such as demand response, small- or large-scale storage and P2G will become essential. The current connection concepts entail increasing costs for far offshore wind farms in terms of construction, maintenance and infrastructure. While the suggested NSWPH concept could help reduce some of the costs, there are several knowledge gaps, which will need to be further studied.

The way forward The project is at the conceptual and planning stage. In terms of the next steps, based on the ecological quick scans and research questions, a draft proposal will be prepared for detailed feasibility studies. Based on the consultation on the draft, a final proposal must be prepared to initiate further research. The consortium is open to inputs from the industry and willing to join hands with more partners. The consortium is expected to publish a roadmap during 2018, charting the future path. At the EU level, the visionary NSWPH project has created excitement among policymakers. It covers five important policy dimensions, namely, regional cooperation, internal market, energy efficiency, climate action and innovation, and competitiveness. The cost-benefit analysis of creating an artificial island in the middle of large offshore wind capacity zones needs further detailed evaluation. Nonetheless, the innovative design, if implemented in the manner in which it is being conceived would change the landscape of the electricity industry and open up several opportunities for sustainable development. ■

PRODUCT RELEASE

Products in the Market DUNMORE launches new PV back sheets for long-term UV exposure DUNMORE has announced its portfolio of UL-listed back sheets for photovoltaic (PV) applications. DUN-SOLAR PV back sheets are an ideal component in the production of monocrystalline, poly-crystalline and thin-film solar modules. The DUN-SOLAR PV back sheets are designed and manufactured for solar applications where robust characteristics like tolerance to long-term UV exposure and wide temperature ranges are needed. These back sheets provide superior moisture resistance, and thermal and UV stability by incorporating high performance materials into the coated and laminated films. These back sheets combine process stability with excellent functionality. The expanded DUN-SOLAR portfolio has over 35 UL-listed products, including polyester and polyvinyl fluoride film (PVF) constructions for 1,000 V and 1,500 V applications, for improved durability in the field. DUNMORE also manufactures polyvinyl fluoride/ aluminium/polyester/polyethylene (TAPE) solar back sheets for copper indium gallium selenide panels and flexible module fabrication. REC launches solar industry’s first n-type, mono half-cut-cell module The REC Group has launched its new N-Peak solar panel, which promises high performance levels. The new N-peak solar panel is the first solar panel to combine n-type mono half-cut cells with a twin-panel design. It breaks fresh ground for REC and the industry, and promises a power output level of up to 330 Wp for a lasting performance. The

REC N-Peak Series has powerful 60-cell modules, building on the success of REC’s TwinPeak technology. When partially shaded, the panel is split into two twin sections to enable continued energy production and to improve module performance in shaded conditions. These modules are made of mono n-type cells, which ensure greater efficiency levels. The products have superstrong frames designed for loads of up to 7,000 Pa. The company offers a 12year product warranty and 0.5 per cent annual degradation over the 25-year power warranty, resulting in 86 per cent of nameplate power after 25 years. The REC N-Peak Series promises zero lightinduced degradation by preventing a combination of boron and oxygen inside a cell that can cause a permanent drop in a panel’s maximum power output. The product also comes with flexible installation options. Vikram Solar launches Tigo-integrated SOLIVO smart modules Kolkata-based solar company Vikram Solar has launched its new line of integrated smart modules with Tigo, a Silicon Valley based solar PV solutions company. The SOLIVO series of smart modules is the latest addition to Vikram Solar’s crystalline silicon PV module product portfolio. These modules are the company’s highest efficiency modules to date, that is, up to 19.07 per cent for 72 cells and up to 19.36 per cent for 60 cells. The effects of shading, soiling or mismatch loss are virtually nullified in this product and more power is harvested, as each module can be optimised for energy generation, through advanced module-level power optimisation technology. Tigo’s flexible module-level power elec-

tronics (Flex MLPE) provide multiple smart features including module-level remote monitoring, rapid shutdown, power optimisation and longer string designs. Tigo’s TS4 platform offers functionalities like “smart-ready” TS4 diodes and higher reliability. Other smart module functionalities include allowing superior heat dissipation from modules, achieving lower resistive loss in strings, identifying faults, maximising area usage, lowering operations and maintenance (O&M) costs and increasing the system uptime compared to conventional modules. Even in compromised installation conditions due to partial shading, current mismatch, or module output tolerance, the TS4 platform maximises energy production for the most optimum returns on investment. Solaria launches new high efficiency SolariaPowerXT 430 Wp for commercial projects The Solaria Corporation, a global provider of solar module technologies, announced its latest innovation, the SolariaPowerXT 430 Wp, optimised for providing greater efficiencies in commercial applications. The sleek, all-black module with high energy yield technology promises to address rooftop space constraints through fewer gaps between the solar cells. The Solaria PowerXT modules promise efficiencies of up to 20 per cent. These high power output modules are all black with a black back sheet. The PowerXT 430 W modules build on the success of the PowerXT platform, which uses Solaria’s advanced cell interconnection and module production processes. These processes significantly boost power generation and provide customers with an enhanced performance. ■

August 2018 ● Renewable Watch ● 77

UP AND COMING

Up and Coming Strawberry Energy Over the past few years, solar cell and module prices have been declining rapidly. This has promoted the development of innovative solar power solutions such as solar-powered lanterns, solar fans and solar water purifiers. Strawberry Energy, a solar-powered urban furniture provider for smart and sustainable cities, has developed a unique method of utilising solar energy through the placement of furniture with smart features for public use in urban areas. Founded in March 2011, the company aims to enhance the experience of urban citizens in public spaces by providing them with clean electricity and connectivity on the go. Strawberry Energy has a line of smart street furniture, which brings the internet of things to outdoor public spaces that have a high footfall to help improve the standards of cities, making them smarter and more convenient to live in. Currently, the company offers three types of “smart benches” and a “strawberry tree”, which can be deployed in public spaces and recreational centres. The smart bench and “smart bench 2” provide seating as well as shade, whereas the “smart bench mini” is a compact version of the other two and provides only seating facilities. The strawberry tree has been designed to provide shade and shelter from the rain. In addition to providing seating and shade, these products have built-in smart features. All Strawberry Energy products are equipped with a stand-alone solar photovoltaic system, which generates energy to provide services such as mobile charging with the help of built-in power chords and USB ports. In addition, wireless pads are provided for charging phones.

All products can provide internet connectivity to users near them through Wi-Fi. In addition, the benches and the tree come with sensors that can measure environment data such as local temperature, air pressure, humidity, noise level and carbon dioxide in real time. This information is easily accessible to users through Strawberry Energy’s app as well as the Wi-Fi landing page on the browser. The app also lets users find their nearest strawberry bench and takes their suggestions for installing these benches in new locations. The strawberry tree and smart bench mini have an additional feature of LED lighting. Moreover, while the basic specifications and design features of the company’s offerings remain the same, other specifications such as rating of solar panels, number of charging ports and sensor data vary from product to product. The company not only has original design ideas but also a unique business model. Since urban cities often do not have the resources to fund such services, the company offers its network of smart benches free of charge to cities and organisations. The company generates revenue by selling commercial branding rights of Strawberry Energy’s furniture to organisations that want to engage with people in an innovative way. With its one-of-a-kind offering, it is no surprise that the company has grown manyfold in a very short span of time. In 2012, Strawberry Energy had a presence in five cities, which expanded to five countries by April 2013. As of April 2016, the company had installations in 25 cities across 17 countries. Its key clients include Ford Motor Company, Canary Wharf, the United Nations Development Programme, and Orange. In September 2017, the company launched a network of smart benches in London in partnership with Ford Motors Europe.

78 ● Renewable Watch ● August 2018

UP AND COMING

Strawberry Energy has already raised about £900,000 from institutional and angel investors and is generating revenue through product sales and sponsorship deals. The company has also launched a public funding drive to raise £300,000 in funds for expanding its network of smart benches in London to 100 locations. While Strawberry Energy has no immediate plans to expand in Asia, developing and economically progressing countries such as India can provide a large potential market for its products. Under the country’s Smart Cities Mission, which aims to promote development in cities and improve the quality of life of its urban citizens, such an innovative technology and business model can be adopted to provide residents with state-of-the-art services at zero cost to municipalities.

Biogenic Solar Cells Solar energy generation largely depends on the availability of sunlight. Thus, during cloud cover, a steep decline is witnessed in solar power generation leading to grid instability. However, the industry has been looking for ways to generate solar power during cloudy days as well as in low-light conditions to maintain a stable minimum output and make solar power a more economical option. To this end, researchers at the University of British Columbia (UBC) have developed a “biogenic” solar cell that uses bacteria to generate electricity even in dim lighting conditions. These biogenic cells are made up of living organisms and have the potential to reach the efficiency levels of synthetic cells used in conventional solar panels. Currently, the efforts to build biogenic solar cells are focused mainly on extracting the natural dye used by bacteria for photosynthesis. This is a complex process in which the toxic solvents involved can cause the natural dye to degrade. In addition, these biogenic dye-sensitised solar cells (DSSCs) are expensive owing to the irregular supply of natural dyes, inconsistencies in material qualities and inefficiencies in extraction.

The UBC researchers have developed a simpler solution to this problem by leaving the dye in the bacteria. To achieve this, the research team genetically engineered the E. coli bacteria to produce large amounts of lycopene. Lycopene is the dye that gives tomatoes their redorange colour. It is a photosensitive pigment that can mediate electron transfer and is, therefore, very effective in harvesting light, which can be further converted into energy. The bacteria containing the dye are coated with titanium dioxide, which acts as a semiconductor. This mixture can then be applied to a conductive glass surface along with an electrolyte mixture to form a functioning DSSC. The coated glass can be used as an anode of a photovoltaic cell. The process is vastly different from the traditional approach of coating a semiconductor material with a dye or a photosensitiser. The new type of cell can generate a current density of 0.686 milliamperes per square centimetre, a significant improvement from the 0.362 milliamperes per square centimetre current density achieved by the previously developed dye-based cells. The UBC researchers believe that the new process could reduce the total cost of dye production to about onetenth of the earlier figures. These biogenic materials could also have applications in the mining industry, deep-sea exploration and other low-light environments. These materials can be manufactured more economically and sustainably than conventional materials. Thus, with sufficient optimisation, the biogenic cells can perform at efficiencies comparable with conventional solar cell efficiencies. However, the most important factor in the success of such solar cells would be the use of technology that does not kill the bacteria so the dye can be indefinitely produced. In the Indian context, biogenic cells have a large market in the northern and north-eastern regions of the country. These regions do not have significant solar energy capacity as yet. The heavy cloud cover and rainfall leads to low capacity utilisation factor and longer payback periods. Thus, if these cells are deployed commercially at low costs, they could generate higher power outputs in regions with low sunshine levels. Since energy will be generated even during cloud cover, the frequency variations in the grid could be reduced, thus increasing its stability. The low costs could help boost the residential rooftop segment, which mainly relies on grants and subsidies. Moreover, the cells will be manufactured through eco-friendly processes, which will contribute towards India’s sustainable development goals. ■

August 2018 ● Renewable Watch ● 79

PHOTOGALLERY

Sector Snapshots

Prime M inister N arendra structure Modi re sectors views th such as natural e progre power, re gas, coa ss of ke newable l and m y infraenergy, ining wit petroleu h other m and dignitari es in Ne w Delhi

Raj Kum ar Sing Renewa ble Energ h, Minister of S tate for y, addre Busines Power a sses the s Partne nd New a u rs dience a h ip and Conclav Water, E t the “G e on Fas nergy a overnm t Tracks nd Gree ent and for the 2 n Industr 030 Age y”, orga nda: nised by NITI Aay og

80 ● Renewable Watch ● August 2018

ses the , addres I Aayog IT N tainable s r, u e ve Offic nce on S ti u re c e fe x n E o ief Delhi ational C Kant, Ch ” in New e “Intern Amitabh ecycling ion of th R s l s a e s ri l te Ma inaugura through Growth

orld to for the W ip olutions S rsh e n n ia rt d a the “In siness P releases Energy t and Bu h n r, g e te in m a S rn r W e a : ov Agenda Raj Kum t the “G nitaries e 2030 SDGs” a other dig ks for th f c o Achieve ra e T c t n s e e on Fa the pres Conclav stry”, in en Indu re G d n a

PHOTOGALLERY

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sion ransmis Power T te rence ta fe S n r o India” c cts, Biha je in ro n P io s r, ecto Transmis ndey, Dir “Power H.R. Pa s at the k a e p s y, Compan

August 2018 ● Renewable Watch ● 81

PEOPLE

M.M. Nayak Chairman and Managing Director, Southern Power Distribution Company of Andhra Pradesh Limited

.M. Nayak, CMD of Southern Power Distribution Company of Andhra Pradesh Limited (APSPDCL), notes that efficiency in the power sector is crucial to control losses. “Electricity serves as the backbone for infrastructure development in the country. Efficiency in this sector is very important,” he says. “One of the factors affecting efficiency is AT&C losses. On an average, AT&C losses amount to around 20 per cent in our country. This creates an additional burden for consumers and impacts the economy.” Nayak believes that increasing the use of renewables and revamping older technologies would drive efficiency and reduce losses. “We need to work on reducing losses and increasing the share of renewables so as to drive the sector towards sustainability. Older technologies need to be replaced with more efficient technologies.” As CMD of APSPDCL, Nayak is responsible for managing power distribution in the Krishna, Guntur, Prakasam, Nellore, Chittoor, Kadapa, Kurnool and Anantapur districts, which have

ith experience of nearly three decades in electrical systems and electronics, Raju Naidu’s knowledge spans across operations and maintenance, quality assurance, process improvement and project management. During the initial part of his career, he worked with Kirloskar Electric Company and then moved to the product certification industry, joining Underwriters Laboratories where he was involved in the product safety certification process of various electrical and electronic systems. Naidu moved to the renewable energy domain in 2011, joining Juwi India Renewable Energies. He was initially involved in the quality assurance process, but soon moved to operations and maintenance (O&M) for solar photovoltaic projects. He is currently a director with the company. Having worked for more than seven years in the solar O&M space, Naidu feels that “not much has changed in all these years”. He adds: “Quality innovations are needed to bring down O&M costs. The Indian solar O&M industry should move beyond the regular O&M practices of optimising generation levels and work on reversing the degradation trend through technological advancements.” Being an O&M company, he feels that the bigger challenge lies for operators due to uncertainty regarding the condition of the assets given to them from their O&M predecessor or the developer. Short-term contracts do not give much time to the operator to deploy new technologies and improve the plant performance. Accordingn to him, O&M contracts should be for

82 ● Renewable Watch ● August 2018

over 12 million high and low tension consumers. Nayak is currently focusing on integrating new technologies into APSPDCL’s daily operations to improve customer service and reduce operating costs. SCADA, data analytics, real-time monitoring of feeders, promoting digital transactions for consumers, as well as smart meter procurements are some of the key initiatives under way, he notes. Further, the state discom is now gearing up to undertake electric vehicle adoption. Prior to assuming his current role at APSPDCL, Nayak was given the responsibility of serving as CMD of Eastern Power Distribution Company of Andhra Pradesh Limited for a year. A 2005 batch IAS officer from Andhra Pradesh, Nayak started his journey serving as sub-collector at Tekkeli and Machilipatnam. Over the course of his career, he served in various roles in the state administration, including that of joint collector, municipal commissioner and collector. On his management style, Nayak says, “I believe that our employees are our assets.” He tries to test, implement and control projects as per the planned parameters. He also takes out time for interacting with employees and gathering consumer feedback. Nayak is a mechanical engineering graduate from Andhra University. He maintains a healthy work-life balance through planning, prioritising and focusing on key tasks. In his spare time, he reads books, shares his learning with friends and watches TV. ■

Raju Naidu Director, Juwi India Renewable Energies Private Limited

longer time periods so that the O&M service providers get time to innovate and automate. Since 2011, the company had been operating as a full-fledged engineering, procurement and construction (EPC) and O&M service provider. However, due to dwindling EPC margins, the company has stopped its construction business completely this year and has started focusing on O&M alone. With this clear focus on O&M, the company is aiming for 1 GW of projects by 2019. Naidu’s most memorable project so far is a recent solar project, which reached the optimal generation level in a very short span of time in connecting to the grid, in contrast to the usual period of a few months. Naidu feels motivated that the plant showed a good performance ratio. An electrical and electronics engineer, his management style is focused on encouraging team effort in every assignment. At a personal level, he says he wants to make a contribution towards the creation of more jobs in the solar O&M segment. ■

Highlights of 2017

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Digital Future: New Utility Requirements, Promising Technologies and Best Practices

September 6-7, 2018, The Grand, Vasant Kunj, New Delhi Lead Sponsor*:

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AGENDA: Key Trends and Outlook

Smart Metering Update

Update on Key Government Programmes

IOT, Big Data and Cloud

Utility Perspective

Focus on Renewable Energy

Regulatory Perspective

Asset Management

Update on Smart Grid Initiatives

Cybersecurity Requirements

Communication Technologies IT-OT for Grid Monitoring IT-OT for Renewable Integration E-Mobility Requirements Artificial Intelligence and Blockchain Technology

There will be dedicated segment-specific tracks on generation, transmission and distribution. These will cover areas such as communications, data analytics, real-time monitoring, asset management, regulatory compliance, management information systems and smart grid.

A key highlight of the conference is the major participation by public/private utilities. Some of these include:

For delegate registrations and sponsorship opportunities, contact: Priyanka Singh Tel: +91-11-46012775, 41034615, 9811755907

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84 ● Renewable Watch ● August 2018

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DATA AND STATISTIC S

Solar Statistics State-wise achievements Installed grid-connected solar capacity as of June 2018 (MW) State/Union territory

Cumulative capacity

Andaman & Nicobar

6.56

–

2,512.36

316.90

5.39

–

12.70

0.25

142.45

Chandigarh Chhattisgarh

Andhra Pradesh Arunachal Pradesh Assam Bihar

Dadra & Nagar Haveli

Capacity installed in 2018-19

State/Union territory

Cumulative capacity

Capacity installed in 2018-19

Madhya Pradesh

1,321.81

16.46

Maharashtra

1,419.18

180.00

Manipur

2.17

2.11

Meghalaya

0.06

0.04

–

Mizoram

0.20

–

30.35

5.15

Nagaland

1.00

–

231.35

–

Odisha

110.25

30.68

Pondicherry

5.46

–

Daman & Diu

13.01

2.40

Delhi

69.57

–

Rajasthan

Goa

0.91

–

Sikkim

1,637.15

49.15

Gujarat Haryana

Punjab

1.71

1.55

905.62

–

2,360.75

27.98

0.01

Tamil Nadu

2,220.95

312.38

Telangana

3,401.13

109.88

216.85

–

Himachal Pradesh

3.36

2.63

Tripura

Jammu & Kashmir

9.85

8.49

5.09

–

Uttar Pradesh

739.41

45.00

Jharkhand

31.78

6.11

Uttarakhand

302.99

42.91

Karnataka

5,124.18

180.06

West Bengal

37.97

0.65

138.49

30.55

23,022.82

1,371.34

0.75

–

Kerala Lakshadweep

Total

Source: Ministry of New and Renewable Energy

List of solar pumps installed as of June 2018 State/Union Territory

Number of solar pumps

Andaman & Nicobar

Andhra Pradesh

30,344

State/Union Territory

Number of solar pumps

Manipur

Meghalaya

Arunachal Pradesh

Mizoram

Assam

Nagaland

Bihar Chandigarh Chhattisgarh

1,882 12 43,408

Orissa Puducherry Punjab

8,937 21 1,857

Delhi

Rajasthan

42,581

Goa

Tamil Nadu

4,459

Gujarat

11,522

Haryana

1,293

Himachal Pradesh Jammu & Kashmir

Telangana

424

Tripura

151

Uttar Pradesh

14,696

Uttarakhand

Jharkhand

3,702

West Bengal

653

Karnataka

5,011

National Bank for Agriculture and Rural Development (NABARD)

Kerala

818

Madhya Pradesh

6,034

Maharashtra

3,315

86 ● Renewable Watch ● August 2018

Total Source: Ministry of New and Renewable Energy

4,012 185,479

DATA AND STATISTIC S

Tender Update Recent issues and bid extensions Key tenders issued in July 2018 Tendering Agency Utility scale solar SECI

Capacity (MW)

UPNEDA

NMC

Location

Details

3,000

Across India

500

Across Uttar Pradesh

– – – – – –

Across Maharashtra

– – –

KREDL

150

Pavagada, Karnataka

– – – –

Canal top solar The Irrigation and Water Resource Department, Uttar Pradesh

Floating solar NHPC Limited

100

The bid submission deadline for the ISTS-connected solar PV projects was August 17, 2018. The minimum bid capacity of each project is 50 MW and a single bidder can bid for a maximum capacity of 1,800 MW. Scope of work includes design, supply, construction, procurement, installation, testing and commissioning of the project. The last date of bid submission is August 28, 2018. As per the tender document, a single bidder must bid for a minimum 5 MW and maximum 500 MW. UPNEDA had issued a request for proposal (RfP) tender for the development of 1,000 MW of solar capacity in the state. The tender was cancelled due to higher than expected tariff rates discovered in the auction. The last date for bid submission is August 27, 2018. Bids were re-invited for the development of PV projects on July 26, 2018. Bids for the same were earlier issued in June 2018. The scope of work involves design, engineering, manufacturing, supply, installation, testing, commissioning, and O&M of the cumulative capacity on a deferred payment basis. The project will be developed at an estimated cost of Rs 3 billion and the work completion period is 240 days. RfP invited for solar PV projects on July 27, 2018. The last date for bid submission is August 25, 2018. The 150 MW capacity will be developed in three block of 50 MW each on a build, own and operate (BOO) basis under the open category. Power will be procured by the state electricity supply companies (ESCOMs) of Karnataka for a period of 25 years.

Mirzapur, Banda, – The last date of EoI submission was August 16, 2018. Bulandsahar – The projects will be developed in capacities of 50 MW, 30 MW and 20 MW in Mirzapur, Banda, Bulandsahar districts districts, respectively. Uttar Pradesh – The scope of work involves installation, commissioning, grid synchronisation, O&M of the plants on a public-private partnership (PPP) model. – PPAs will be signed with the successful bidders for 25 years. West Kallada, Kerala

TSCCL

Chittoor district, Andhra Pradesh

Solar with storage SECI

Leh district, Jammu & Kashmir

SECI

Kaza, Himachal Pradesh

Wind SECI

2500

Across India

88 ● Renewable Watch ● August 2018

– – – – –

Bid submission deadline is August 21, 2018. NHPC Limited had invited an EPC contractor on July 5, 2018. The successful developer will provide O&M services for 10 years from the date of project completion. The project completion timeframe is nine months from the date of issue of the letter of award (LoA). Bids were invited on July 12, 2018 and the last date for bid submission was August 1, 2018. The scope of work involves design, procurement, supply, installation, testing, commissioning and O&M for 10 years

– Bid submission deadline is August 23, 2018. – The successful bidder is expected to complete the entire work within one year from the date of issuance of the notice of availability (NoA). – The scope of work includes design, engineering, supply, construction, installation, testing and commissioning of two solar projects of 1.5 MW each along with BESS at Tangtse and Durbukthe respectively. – The successful bidder will also be responsible for providing 10 years of O&M services. This would include the supply and storage of all mandatory spare parts, consumables, repairs and replacements of any defective equipment. – Bid submission deadline for the solar PV and BESS is August 31, 2018. – Scope of work includes design, engineering, supply, construction, installation, testing and commissioning of the projects. – The successful bidder will be responsible for O&M for a period of 5 years. – Work is expected to be completed within 18 months from the date of issuance of the NoA. – The bid submission deadline for the ISTS-connected wind power projects was August 7, 2018. – Projects will be developed on a BOO basis. – The successful bidders will enter into PPAs with SECI for a period of 25 years.

DATA AND STATISTIC S

Key tenders issued in July 2018 Tendering Agency

Capacity (MW)

REMCL

Small Hydro KSEB

Ramesh Hydro Power Private Limited

Location

Across Maharashtra

Details – A single bidder can bid for a minimum of 50 MW and a maximum of 300 MW capacity. – The scope of work includes setting up of wind power projects as well as the transmission network up to the delivery point. – The bid submission deadline was August 6, 2018. – Projects will be developed on a BOO basis. – Central Railways will procure power for a 25-year period.

Peruvannamuzhy, – The last date for bid submission is September 1, 2018. Bids were re-issued on July 20, 2018 for two 3 MW plants. Kerala Kinnaur district, – The bid submission deadline was August 13, 2018. Bids were invited on July 18, 2018. Himachal Pradesh – Interested developers should submit bids for either 3x8 MW or 2x12 MW capacities. – The scope of work includes design, engineering, manufacturing, supply and transport, and services for erection, testing and commissioning of complete water-to-wire electromechanical works.

Cases of bid due date extension Tendering Agency Utility scale solar SECI SECI SECI SECI NTPC Limited NTPC Limited

Capacity (MW)

Location

70 10 70 5 21 15

Amguri, Assam Kolar, Karnataka Amguri, Assam Across India Gandhar, Gujarat Ramagundam, Telangana Auraiya district, Uttar Pradesh Kawas, Gujarat

– – – – – –

Across Madhya Pradesh

– The bid submission deadline was extended from July 12 to August 9, 2018.

NTPC Limited

CEL CEL

10 10

WBREDA

Rooftop Solar MPUVNL

Floating solar SECI

150

Solar with storage NTPC Limited

Details The RfS due date was extended from July 4, 2018 to July 18, 2018. Bids for the same were invited in February 2018. The bid submission deadline was extended from July 23, 2018 to August 9, 2018. The RfS bid due date was extended from from July 18, 2018 to August 21, 2018. The Rfs due date was extended from July 27, 2018 to August 20, 2018. The bid submission deadline was extended from July 26, 2018 to August 20, 2018. The bid submission was extended from July 30, 2018 to August 23, 2018.

– The bid due date was extended from July 18, 2018 to August 1, 2018. Bids for the same were issued in October 2017. – The bid due date was extended from July 11, 2018 to July 25, 2018. The bids have been invited on a turnkey basis under the open category of PV modules and cells. Kayamkulam, – The bid due date was extended from July 16, 2018 to July 30, 2018. Bids for the same were issued in October 2017. Kerala – The bids have been invited on a turnkey basis under the open category of PV modules and cells. Across Maharashtra – The bid due date was extended from July 20, 2018 to July 27, 2018. Across – The bid due date for the grid-connected PV power project was extended from July 13, 2018 to July 20, 2018. Maharashtra Bhajanghat, – The bid due date was extended for the grid-connected PV project from July 18, 2018 to August 3, 2018. Bids for the West Bengal same were earlier invited in January 2018.

Rihand dam, – The RfS bid due date for the selection of a solar power developer has been extended from July 6, 2018 to Sonbhadra September 4, 2018. district, Uttar Pradesh Chidiyatapu and – The projects will be developed as 8 MW and 17 MW plants in Chidiyatapu and Manglutan respectively. Manglutan, Andaman – Bid due date extended from July 3, 2018 to August 16, 2018 for Chidiyatapu and from July 17, 2018 to August 19, and Nicobar Islands 2018 for Manglutan solar PV power projects. – Bids for the same were invited on March 10, 2018.

Wind NHPC Limited

Agali, Kerela

NHPC Limited

2,000

Across India

– The EPC bid due date has been extended from July 26, 2018 to August 22, 2018. Bids for the same were invited in April 2018. – The bid due date was extended from July 26, 2018 to August 6, 2018. Bids for the same were invited in March 2018.

CEL: Central Electronics Limited; SECI: Solar Energy Corporation of India Limited;TSCCL: Tirupati Smart City Corporation Limited; KSEB: Kerala State Electricity Board: NHPC; WBREDA: West Bengal Renewable Energy Development Agency; MPUVNL: Madhya Pradesh Urja Vikas Nigam Limited; EPC: Engineering, Procurement and Construction; Rfs: Request for selection; Rfp: Request for proposal; PV: Photovoltaic; UPNEDA: Uttar Pradesh New and Renewable Energy Development Agency; NMC: Nagpur Municipal Corporation; KREDL: Karnataka Renewable Energy Development Limited; SCCL: Singareni Collieries Company Limite; REMCL:The Railway Energy Management Company Limited; ISTS:Interstate transmission system; BESS:Battery Energy Storage System

August 2018 ● Renewable Watch ● 89

DATA AND STATISTIC S

Tender Results Winners of solar capacity auctions in July 2018 SECI’s 3,000 MW ISTS solar tender* Winning developers Capacity won (MW) ACME Solar 600** Azure Power 300 Rutherford Solarfarms (Canadian Solar) 200 Mahoba Solar UP (Adani) 300 ReNew Solar Power 500 SBE Renewables (SoftBank) 1,100

Final tariff (Rs per kWh) 2.44 2.64 2.70 2.71 2.71 2.71

SECI’s 2,000 MW pan-India solar tender Winning developers ACME Solar Shapoorji Pallonji Hero Future Energies Mahindra Susten Azure Power Mahoba Solar UP (Adani)

Capacity won (MW) 600 250 250 250 600 50*

Final tariff (Rs per kWh) 2.44 2.52 2.53 2.53 2.53 2.54

* SECI has now cancelled the allotment of 2,400 MW capacity **ACME Solar is the only successful bidder Source: Solar Energy Corporation of India (SECI)

* The company bid for 500 MW but won only 50 MW

SECI’s 750 MW solar tender for Kadapa solar park, Andhra Pradesh

KREDL’s 650 MW solar tender for the Pavagada solar park, Karnataka

Winning developers SB Energy (SoftBank) Sprng Soura Kiran Vidyut (Actis) Ayana Renewable (CDC Group)

Winning developers Capacity won (MW) Fortum Corporation 250 Tata Power Renewable Energy Limited 250

Capacity won (MW) 250 250 250

Final tariff (Rs per kWh) 2.70 2.70 2.71

Source: SECI

Final tariff (Rs per kWh) 2.85 2.85

Note: Decision on the remaining 150 MW of tendered capacity is yet to be taken. Source: Karnataka Renewable Energy Development Limited (KREDL)

NREDCAP’s 15 MW grid-connected rooftop solar tender Winning developers CleanMax Solar Azure Power Rich Phytocare TEPSOL Solar

Source: SECI

Capacity won (MW) 3 5 3 4

Final tariff (Rs per kWh) 3.64 3.69 3.98 3.99

Note: The L2, L3, L4 bidders have been requested to match the L1 price. Source: New and Renewable Energy Development Corporation of Andhra Pradesh Limited (NREDCAP)

90 ● Renewable Watch ● August 2018

GRIDCO’s 200 MW solar tender Winning developers Aditya Birla Renewables Sukhbir Agro Energy Gupta Power Infrastructure Eden Renewables ACME Solar

Capacity won (MW) 75 25 20 50 30*

* ACME Solar bid for 50 MW but won only 30 MW Source: Grid Corporation of Odisha

Final tariff (Rs per kWh) 2.79 3.19 3.19 3.19 3.20