Rw sept by Mohit Shrimal

Volume No. 7 Issue No. 11

EDITORIAL

EDITORIAL PUBLISHING

India’s energy transition towards a sustainable and clean power portfolio is not proving to

Alok Brara

be easy. Both the solar and wind power segments are going through multiple challenges

EDITOR Nandita S. Kochhar (Senior Editor, Copy)

such as the renegotiation of power purchase agreements (PPAs) and tariffs, transmission hurdles, power curtailment, payment delays and tendering difficulties.

EDITORIAL OPERATIONS

A tariff reduction of 40 per cent in the solar power space has resulted in several ongoing ten-

Mudita Mehta (Director)

ders being scrapped as states and other agencies are redesigning their procurement

Devangshu Datta (Consultant)

schemes. More worryingly, some states including Uttar Pradesh, Andhra Pradesh and Tamil

Shyama Warner (Consultant)

Nadu are seeking to renegotiate or cancel the previously allocated projects (at higher tariffs).

EDITORIAL

A similar scenario is being witnessed in the wind power space, which saw a tariff decline of

Rama Sudhakar Patnaik (Consultant)

17-35 per cent in the first-ever auction conducted in February 2017. It was initially thought

Nidhima Gambhir (Associate Copy Editor)

that the migration from the FiT-based regime to auction-based allocation would bring in

Sayantanee Ghosh (Sr. Subeditor)

greater project visibility and transparency, but the industry has been taken by shock as the

Sugandha Khurana (Sr. Subeditor)

ongoing project development has been jeopardised with the state discoms demanding a

RESEARCH

renegotiation of PPAs at lower tariffs, comparable to the winning bid of Rs 3.46 per kWh.

Associate Director: Dolly Khattar

Resultantly, capacity addition in both the segments has dipped considerably in the first half

Sr. Research Analyst: Ashay Abbhi

of 2017-18, leaving both the developer and the manufacturer community stranded.

Analysts: Puneet Kumar Arora

Meanwhile, at a recent industry event, India’s chief economic adviser noted that the coun-

BUSINESS DEVELOPMENT Raman Dev Narang (Senior Vice-President) Mohit Shrimal (Manager)

try should still have coal as the major fuel and avoid getting distracted by the global debate on carbon imperialism. He cautioned that there are hidden costs associated with renewables due to their intermittency, low capacity utilisation factor, land acquisition requirement, cost of upgrading the grid, as well as subsidies. This view has been further reiterated in the

DESIGN

recently released second volume of the Economic Survey 2016-17, which states that the

Joybroto Dass (Art Director)

social cost of renewables is about three times that of producing coal-based electricity.

Jaison Jose (Graphic Designer)

With solar and wind equipment production lines lying idle, developers having minimal proADMINISTRATION

ject visibility and contradictory views on the country’s overall plan to move towards a renew-

Jose James

able-heavy energy mix, the industry is keenly awaiting “corrective” measures by the gov-

CIRCULATION

ernment to bring a turnaround.

Sumita Kanjilal

It is a testing time for project developers, investors and lenders, but more so for the gov-

PHOTOGRAPHY

ernment, which is finding itself tangled in a complex web of challenges that need to be

Pallee

resolved simultaneously.

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September 2017 ● Renewable Watch ● 3

CONTENTS

20 Bleak Times

State Focus

Wind project pipeline dries up

Rajasthan

Kshema Power

Spotlight

Aims to develop 1,000 MW of projects per annum

Renewable financing

CONTENTS NEWS BRIEFS TRENDS AND DEVELOPMENTS Bleak times: Wind project pipeline dries up Smart renewables: Powering urban infrastructure development Growth projections: IRENA expects renewable energy capacity to reach 518 GW by 2030 Power from scrap: Energy generation emerges as an effective means of waste management Reviving pumped storage: Operationalising PSPs to promote grid stability COMPANIES Kshema Power: Aims to develop 1,000 MW of projects per annum EESL: Diversifies its portfolio to drive future growth Micromax Energy Limited: Forays into the solar segment backed by an innovative portfolio PERSPECTIVE Interview with Amitabh Kant: “The future lies only in 4 ● Renewable Watch ● September 2017

20 24 26 30 34

36 38 40

renewable energy” “Make India a model country for wind power”: Views of MNRE’s Anand Kumar “Challenges in providing grid connectivity”: Views of SECI’s Jatindra Nath Swain Auction impact: Uncertainty and upheaval in the wind segment Lighting up lives: Solar innovation by IIT Madras drives economic growth in rural India STATE FOCUS: RAJASTHAN Renewables frontrunner: Rajasthan strives to overcome challenges to maximise its potential SPOTLIGHT: RENEWABLE FINANCING Attracting equity: Changing risk profile calls for innovative financing mechanisms Debt surge: Bonds and borrowings drive capital influx in the renewables market Treading cautiously: Lenders adopt a wait-and-watch approach amidst uncertainty in wind regime Financing moves: Equity and debt deals

46 48 50 54

60 62 64 66

CONTENTS

42 Interview with Amitabh Kant “The future lies only in renewable energy”

46 Views of MNRE’s Anand Kumar “Make India a model country for wind power”

CONTENTS UP AND COMING A promising start WORLD VIEW Clean energy transition: New Zealand’s renewable generation and grid integration plans

PHOTOGALLERY Sector snapshots

PEOPLE Ravindra Kumar Verma, Central Electricity Authority Kenichi Yokoyama, Asian Development Bank Siddharth Malik, Megawatt Solutions Private Limited Kanika Khanna, SunKalp Energy

76 76 77 77

6 ● Renewable Watch ● September 2017

EVENT WATCH

PROJECT WATCH Progress update: Plants of 1 MW and above capacity

DATA AND STATISTICS Solar growth: State-wise capacity addition Solar cities progress: Funds allocated and released REC trading on IEX and PXIL: Growth between August 2016 and August 2017

PRODUCT RELEASE Products in the market

78 79 80

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

www.kaco-newenergy.com/in/india +91 959 950 2246

NEWS BRIEFS

National News Regulations

he Central Electricity Regulatory Commission (CERC) has set the national average power purchase cost (APPC) for open access at Rs 3.48 per kWh for 2017-18. The new APPC is Rs 0.08 higher than the previous year’s tariff of Rs 3.40 per kWh. It does not include transmission charges and the cost of generation and procurement through renewable energy. This tariff can be adopted by regional entities such as large power consumers with a portfolio of 1 MW or more, selling wind or solar power through open access, under the renewable energy certificate (REC) framework, as well as captive power projects that do not have a power purchase agreement (PPA). The new APPC is not applicable to those states and union territories that did not issue APPC or tariff orders in the previous financial years. Meanwhile, in Tamil Nadu and Tripura, the APPC determined for 2014-15 will be applicable, whereas in Delhi and Jharkhand the APPC for 201516 will be adopted. For Rajasthan, the tariff is set at Rs 3.43 per kWh. In Gujarat, Maharashtra, Assam and Kerala, the APPC for 2016-17 will be applied.

he MNRE has issued clarifications to the clause applicable to solar power systems and solar mini/micro-grids with direct current (DC) appliances. The ministry has also stated that the Bureau of Indian Standards (BIS) and/or the international standards for solar DC systems must be specified along with technical parameters. The key highlights of the order include a 60 volt limitation to ensure safety, specification of BIS and/or international standards, a voltage drop of not more than 3 per cent as well as a power loss of less than 2 per cent of the selected cables.

he MNRE has signed an agreement with GIZ GmbH for technical cooperation under the Indo-German Energy Programme – Green Energy Corridors (IGEN-GEC) to improve the framework for grid integration of renewable energy. To this end, GIZ and the MNRE will work towards the improvement of market mechanisms and regulations; advancement of technical and institutional conditions in specific states, regions and at the national level; and addition of human capacity. The IGEN-GEC programme was commissioned by the Federal Ministry for Economic Cooperation and Development of Germany, and jointly implemented by the MNRE, the Ministry of Power (MoP), and GIZ. The programme supports the implementation of renewable energy management centres and the Green Energy Corrridor scheme.

he government is planning to allocate Rs 160 billion towards the development of stalled hydropower projects in the country. Reportedly, the policy is at the final stages of development and proposes to include large hydropower projects under the purview of renewable energy, besides defining a separate energy purchase obligation for the sector. In addition, the MNRE has advised small-hydro project-developers to proactively provide project development updates and progress reports in order to receive central financial assistance on time.

Policies and programmes

n a recent cabinet reshuffle, Raj Kumar Singh has been appointed as the new minister of state for power and new and renewable energy. In his new role, Singh has promised to meet all standards of performance set by his predecessor, Piyush Goyal, who has taken charge as the minister of railways.

he Ministry of New and Renewable Energy (MNRE) has issued the Solar Photovoltaics, Systems, Devices and Components Goods (Requirements for Compulsory Registration) Order, 2017, which provides a new set of standard specifications for solar photovoltaic (PV) modules. The order will come into effect after one year from the date of its notification. It mandates registration for the use of the “standard mark” under the Bureau of Indian Standards Act of 1986, to all companies involved in manufacturing, and sale or distribution of solar PV systems, devices and components. It further states that the product samples will be drawn at random at least once in two years from the manufacturing unit or from the market by the ministry or the authorised person in order to ascertain conformation to the specified standards. 8 ● Renewable Watch ● September 2017

he Andhra Pradesh Electricity Regulatory Commission has notified its forecasting, scheduling and deviation settlement regulations for solar and wind power projects with effect from August 21, 2017. The state load despatch centre (SLDC) has to issue detailed guidelines for qualified coordinating agency registration, scheduling procedures, communication protocols and formats by December 1, 2017, implying that only those projects that provide schedules as per this regulation will be allowed to be commissioned January 1, 2018 onwards. Further, the levy and collection of deviation charges will commence from July 1, 2018. To this end, wind and solar generators will be required to provide PPA rates to the SLDC in order to prepare their deviation charge accounts.

he Karnataka Electricity Regulatory Commission (KERC) has fixed a generic tariff of Rs 3.74 per kWh for wind projects in the state, which will be applicable from March 31, 2018. KERC has proposed a debt-equity ratio of 70:30 for the tariff determination, and project costs of Rs 62 million per MW at a capacity utilisa-

NEWS BRIEFS tion factor of 28 per cent. For tariff determination, the regulatory commission has taken into consideration a 75 per cent domestic loan component and a 25 per cent foreign loan component. The average interest rate consideration for domestic and foreign loans will be approximately 9.23 per cent and the loan tenor will be 13 years. The project depreciation rate will be set at 5.38 per cent of the capital cost for the first 13 years, with the remaining depreciation spread over the balance useful life of the project. In addition, KERC has proposed a 16 per cent return on equity for wind projects with PPAs for 20 years, along with an extension option of five years.

he CERC has rejected the Indian Energy Exchange’s (IEX) proposal to introduce spot trading of renewable energy on its platform. According to the commission, the current market scenario is not feasible to introduce a green day-ahead market (G-DAM) on the lines of regular day-ahead markets. Moreover, the CERC noted that no substantial data is available, which can reflect the quantity of surplus renewable power; renewable energy is infirm and unpredictable in nature; and G-DAM will come in conflict with existing products such as feed-in tariffs and renewable energy certificates.

he MoP has released guidelines regarding the competitive bidding process for the procurement of grid-connected solar power rated 5 MW or above. The guidelines have been issued under Section 63 of the Electricity Act, 2003 for the long-term procurement of electricity. The guidelines aim to enhance transparency and fairness in the procurement process, provide standardisation and uniformity along with a risk-sharing framework among the various stakeholders, supply affordable power in order to reduce offtaker risk and encourage investments, enhance the bankability of projects and improve profitability for investors. The guidelines focus on strict timelines for the completion of land acquisition, transmission connectivity and other approvals; payment security mechanisms; PPA termination compensations; and lender substitution rights.

Projects

TPC has tendered 35 MW worth of solar power projects under the domestic content requirement category. While 20 MW of capacity will be developed at NTPC Simhadri in Andhra Pradesh, 15 MW will be set up at NTPC Ramagundam in Telangana. The projects will be developed on a turnkey basis for captive use by NTPC. Besides project development and commissioning, the successful bidder has to provide operations and maintenance (O&M) services for 15 years. The bid submission deadline is October 12, 2017.

ndian Oil Corporation Limited (IOCL) has tendered a 1 MW solar power project to be set up at its Digboi refinery premises in Assam. The successful bidder will need to provide five-year, post-warranty comprehensive annual maintenance. IOCL has also ten-

10 ● Renewable Watch ● September 2017

dered a 2 MW grid-connected solar project with horizontal singleaxis solar tracking and net metering facility at the Indian Oil LPG bottling plant in Madanpur Khadar, Delhi. Besides engineering, procurement and construction (EPC), the scope of work includes comprehensive O&M for a year and regular O&M services for four years. The project completion time frame is 18 months from the date of award of the contract.

ilitary Engineering Services has tendered 6 MW of solar projects – a 1 MW grid-connected solar project in Ambala, Chandigarh Zone, and a 5 MW grid-connected solar project in Mhow, Madhya Pradesh. The estimated cost of the projects is Rs 81.4 million and Rs 290 million respectively. The project completion time frame for the Ambala and Mhow projects is six months and 365 days respectively from the date of issue of the letter of award. The scope of work for both tenders includes design, engineering, supply, erection, installation and commissioning of the projects.

he New and Renewable Energy Development Corporation of Andhra Pradesh has released a 1 MW EPC tender for developing a gridconnected solar project with seasonal tracking features for captive utilisation of power on behalf of the Sri Durga Malleswara Swamy Varla Devasthanam in Indrakeeladri, Vijayawada. It will be executed on a net metering basis. The project will be developed at Pathapadu village in Vijayawada. The successful bidder will provide O&M services for 10 years. Five acres of land has been set aside for the purpose. Moreover, the successful bidder will have to provide a transmission line from the project site to a substation by constructing a bay.

reater Visakhapatnam Smart City Corporation Limited (GVSCCL) has tendered a 5 MW grid-connected, canal-top solar project for development on the Raiwada canal in Visakhapatnam under the Smart Cities Mission. The project will be set up under the renewable energy service company model. The bid submission deadline is September 29, 2017. The upper tariff ceiling has been set at Rs 5 per kWh and the project completion time frame is 12 months from the date of issue of the letter of acceptance. In addition, GVSCCL tendered a 2 MW grid-connected floating solar PV project on the Mudasarlova reservoir in Visakhapatnam in July, for which the results are yet to be announced.

ata Power Delhi Distribution Limited (TPDDL) has decided to install 250,000 smart meters in the North and Northwest Delhi by end-2018, under the first phase of its advanced metering infrastructure project in partnership with Landis+Gyr. Phase I will include the setting up of 50,000 three-phase meters and 200,000 single-phase meters at a project cost of around Rs 1 billion. The communication canopy infrastructure is expected to be in place by December 2017 and the smart meters will be available during February-March 2018. The second phase is scheduled to begin in April 2019 with a target to install 500,000

NEWS BRIEFS single phase meters and 50,000 three phase meters. TPDDL plans to install 180,000 smart meters in Delhi over the next seven to eight years with an estimated cost of Rs 20 billion for the entire project.

n a first of its kind, Energy Efficiency Services Limited (EESL) has announced a global tender for the procurement of 10,000 electric vehicles (EVs) for use by government departments and agencies. The bid submission deadline was September 18, 2017. Under this, the EVs will be procured in two phases. In Phase I, 1,000 EVs will be procured for New Delhi and the National Capital Region (NCR), in addition to the development of service and maintenance facilities in the NCR. In Phase II, 9,000 EVs will be procured for use across India, with service and maintenance facilities to be developed at locations selected by EESL.

ailway Energy Management Company Limited has auctioned 67.38 MW of rooftop solar power projects for Indian Railways (IR), which will be developed across the country on premises owned by IR. Mytrah Energy emerged as the biggest winner with 30.87 MW worth of projects by quoting a tariff of Rs 2.39 per kWh. Other winners include Azure Power (25.26 MW), Fourth Partner Energy (6.95 MW), Sangam Advisors (3.3 MW) and ReNew Power Solar (1 MW).

he Maharashtra State Electricity Generation Company (MAHAGENCO) has released a tender for setting up 200 MW of solar capacity across Maharashtra, specifying a base tariff of Rs 3 per kWh. The state-owned company has invited reverse bids under public-private partnerships for four projects of 50 MW each, to be developed across the western, western/northern, Vidarbha and Marathwada regions of Maharashtra, and will be responsible for land provisioning on lease as well as purchasing the electricity generated for 25 years.

ajasthan Renewable Energy Corporation Limited (RRECL) has suspended approval of all renewable energy projects under the REC mechanism in the state. RRECL has stated that no new applications for project registration under the REC mechanism will be taken by the state-level screening committee till further orders. The duration of suspension is expected to be decided in a state cabinet meeting.

BB India has won a contract to provide solar inverters at 750 railway stations in north India as a part of the rooftop solar installations being set up by Azure Power. The inverters, ranging from 5 kW to 50 kW according to site specifications, will support IR in its plan to increase the renewable energy generation capacity from 36 MW at present to 1,000 MW.

he Jawaharlal Nehru University (JNU) has installed 100 kW of grid-connected rooftop solar capacity on its premises. This com-

12 ● Renewable Watch ● September 2017

prises two plants of 50 kW each installed at the administration building and the School of Social Sciences III, with the help of PEC Limited. The solar power plant is expected to generate 400450 kWh of electricity per day for about 300 days in a year, amounting to an annual generation of 120,000-150,000 kWh. Further, JNU plans to expand its solar capacity by installing 2 MW to run its research labs.

he Savitribai Phule Pune University (SPPU) has shortlisted 200 out of the 700 applicant colleges affiliated to the university for installing rooftop solar plants. SPPU will provide a maximum of Rs 0.5 million to each selected college, while the shortlisted colleges will need to contribute Rs 0.15 million for system installation. In the first phase, funds will be provided to 111 colleges this year. The project vendors would provide O&M services for five years, after which the faculty and students will be responsible for it.

cientists at the National Institute of Ocean Technology have identified Kanyakumari and Rameswaram off the Tamil Nadu coast as the two most suitable sites for setting up offshore wind projects. According to the institute’s estimates, 50 turbines of 3.4 MW can be set up at a distance of 5 km from the coastline in each of the locations to achieve a high plant load factor. Each turbine will cost about Rs 690 million. Tariffs of Rs 10.80 and Rs 9.60 per kWh for Rameswaram and Kanyakumari respectively with an internal rate of return of 14 per cent could make these projects commercially viable.

15 MW solar power plant, having a project cost of Rs 8.8 million, is under trial at Kolkata airport. It will be connected to the Calcutta Electric Supply Corporation grid through the net metering arrangement. Spread over an area of 65 acres to the east of the primary runway, the plant consists of 5,454 solar panels each having a capacity of 330 watt. The solar power plant is expected to generate 1.3 million units of electricity a month sufficient to electrify approximately 1,000, homes. In addition, the power plant will bring down the airport’s monthly electricity bill from Rs 600,000 to Rs 475,000, resulting in annual savings of Rs 1.5 million.

nox Wind is planning to develop a 100 MW wind power project for Adani Green Energy, a part of the Adani Group, in Kutch, Gujarat, over a period of six to nine months. Under the EPC contract signed between Inox and Adani, the former will install a total of 50 wind turbines of 2 MW each, and provide O&M services.

olar project developer Rays Power Infra has commissioned a 9 MW solar power project in Tumkur district, Karnataka. It is a part of the Karnataka Farmers Solar Programme and has been executed on a turnkey basis. Spread across 6.5 km, the project comprises 66 kV transmission lines installed using single-axis tracker and fixed tilt technology.

NEWS BRIEFS

he Ministry of Road Transport and Highways (MoRTH) has launched the first batch of 1,000 e-rickshaws from the Huda City Centre metro station in Gurugram. The e-rickshaws will be operated by Treasure Vase Ventures Private Limited in partnership with Delhi Metro Rail Corporation, under the SmartE brand name. The e-rickshaws have been manufactured in India and are fitted with GPS tracking systems. They will provide transport connectivity for metro commuters and create a cost-effective and pollution-free substitute transport system in Gurugram.

ikram Solar has commissioned two projects of 40 MW each at the Charanka Solar Park for Gujarat Industries Power Company Limited. These projects have been developed under the Gujarat Solar Park Projects, National Solar Mission Phase II Batch IV Tranche I. The Solar Energy Corporation of India (SECI) provided the viability gap funding for these projects. The company will also provide O&M services for 10 years.

jaas Energy Limited has been awarded 22.03 MW of grid-connected rooftop solar capacity across India through three different tenders. Of the total capacity, 20.03 MW was awarded by SECI to be developed on government buildings across the country while 1.5 MW was awarded by the West Bengal Renewable Energy Development Agency and will be developed at various locations in West Bengal. The remaining 0.5 MW capacity has been tendered through an EPC contract to develop rooftop solar projects for Oil India Limited. This project will be executed at the Oil India Pump Station in Jorhat, Assam.

mall tenders of 26.9 MW have been announced in India. Of this, 18.78 MW of grid-connected rooftop solar has been tendered by SME Technology Services Limited on behalf of Jawahar Navodaya Vidyalaya to be developed on its premises across India. Another 7.5 MW has been tendered by Indian Oil Corporation Limited to be developed at its Paradip refinery, Odisha. The remaining 0.6 MW has been tendered by the Department of Atomic Energy, Bhabha Atomic Research Centre (BARC) for a grid-connected rooftop solar project to be developed on the buildings of BARC in Trombay, Mumbai. The bid submission deadlines for the projects are October 9, 2017, October 5, 2017 and October 11, 2017 respectively.

zure Power has signed a contract with SECI to develop 50 MW of rooftop solar power capacity on government buildings and institutions across 10 states and union territories. The power will be sold at a tariff Rs 3.19–Rs 3.97 depending upon the location. It is expected that the capital incentive provided by SECI will result in a weighted average levellised tariff of Rs 4.65.

Financings

he International Finance Corporation (IFC) has approved a $150 million loan to ACME Jaipur Solar Power Private Limited, a wholly owned subsidiary of ACME Solar, to develop a 250 MW solar pro14 ● Renewable Watch ● September 2017

ject at the Rewa solar park in Madhya Pradesh. IFC plans to issue up to $50 million through non-convertible debentures and will help in mobilising up to $100 million from other lenders. The loans will be for a long tenor and at a fixed rate of interest.

FC has also granted $150 million loan to Arinsun Clean Energy, a subsidiary of Solenergi Power Private Limited, for the development of its 250 MW solar project at the Rewa solar park in Madhya Pradesh. IFC plans to issue $50 million through non-convertible debentures and an additional $100 million from other lenders. The funds will be utilised by Arinsun Clean Energy for EPC as well as O&M of the project. The company plans to complete the project, costing almost $200 million, by December 2018.

eNew Power Ventures has raised $50 million from YES Bank to refinance the debt of the Amba wind power project in Madhya Pradesh. YES Bank will exclusively arrange for funds through the issue of NCD. The move is a part of ReNew Power’s cost reduction strategy to lower interest costs for the 44 MW project.

he IEX is planning to offer its initial public offering (IPO) by December 2017, making it the first energy exchange to be listed in the country. It has already received approval from the capital market regulator, the Securities and Exchange Board of India. The issue will see the sale of shares from existing investors. Of the existing investors, Dalmiya Cement Bharat and TVS Capital will not sell any shares and continue to be the company’s largest shareholders.

he Rural Electrification Corporation Limited has sanctioned Rs 130 billion as loan to MAHAGENCO. The loan is not restricted to renewable energy projects and can also be utilised to set up thermal power plants as well as auxiliary equipment such as flue gas de-sulphurisers in them. This would help make power projects viable by providing easy financing.

embcorp Industries has entered into an agreement to acquire the remaining 28 per cent stake in Sembcorp Green Infra (SGI), a wind and solar project developer, from IDFC Private Equity Fund III, at $220.2 million. With this acquisition, Sembcorp Industries will become the sole owner of SGI. This acquisition will be financed through a mix of internal funds and loans. The deal is expected to be completed in the first quarter of 2018.

yderabad-based renewable power producer Mytrah Energy has raised Rs 18 billion from Piramal Group’s financial services companies. The funds are being invested in the form of non-convertible debentures with a tenor of seven years in two Mytrah Group entities: Mytrah Energy (India) Private Limited (Rs 9.80 billion) and Mytrah Ujjwal Power Private Limited (Rs 8.20 billion). The funds will be used to refinance the company’s debt and provide exit to some of its current investors such as IDFC Alternatives Limited, AION Direct Singapore Private Limited and Merrill Lynch International before its planned IPO. ■

NEWS BRIEFS

International News

witzerland-based asset management company Capital Dynamics has acquired a 280 MW solar project from First Solar. The financial details of the transaction have not been disclosed. The solar project consists of two phases – the 130 MW first phase, expected to be commissioned by end-2017, and the 150 MW second phase, which is currently under construction and is expected to be commissioned by end-2018.

ermany-based wind turbine manufacturer Senvion has completed the installation of the first 3.4M140 eco blade control turbine prototype in Heckelberg, Germany. The turbine has been installed for the Notus Energy Group.

rench financial institution Proparco and the European Bank for Reconstruction and Development (EBRD) are financing the installation of two 50 MW solar projects to be developed at the Benban solar park located in Aswan province, Egypt. The EBRD and Proparco will each provide $58 million for the construction and operation of the projects, which are a part of the 1.8 GW Benban solar park. They were tendered on a build-own-operate basis to EREN Renewable Energy and Access Power.

enmark-based wind turbine manufacturer Vestas has received an order for 123 units of its V136-3 wind turbines. The contract includes supply, installation and commissioning of wind turbines of 45 MW each, as well as a 15-year active output management service agreement. The delivery of the turbines is scheduled for end-2017, with commissioning expected in 2018.

he US Trade and Development Agency has granted $1.05 million funds to Access Power and EREN Renewable Energy to conduct a study on the feasibility of a 130 MW wind farm project in Zambia. The project will be located in the northern Copperbelt province. Both Access Power and EREN Renewable Energy will own and operate the site upon its completion.

bu Dhabi-based renewable energy company Masdar has signed an engineering, procurement and construction (EPC) contract with a global consortium comprising US-based General Electric and Spain-based TSK Electronica Y Electricidad to build the Dhofar Wind Power Project in Oman. This will be the first large-scale wind farm in Oman. The Dhofar Wind Power Project is a result of the joint development agreement that was signed in 2014 between Masdar and the Rural Areas Electricity Company of Oman. Funds for the wind farm have been provided by the Abu Dhabi Fund for Development.

heffield Solar, a project initiated by the Department of Physics, University of Sheffield, United Kingdom, has been successful in forecasting the energy generation levels for photovoltaic (PV) projects up to three days in advance. The technology will help provide advanced knowledge of the PV output, allowing operators to make more efficient use of the reserve capacity from storage or conventional generation sources. The team has previously worked with the national grid on a tool that estimates the real-time generation from PV systems. This technology is a step forward as it combines live output data with weather forecasts in order to accurately estimate the future output. Sheffield Solar also has plans to provide forecasts on a regional basis and for individual PV systems. 16 ● Renewable Watch ● September 2017

angladesh-based Intraco Solar has signed an agreement with two government agencies for the development of a 30 MW solar PV power plant. The project will be located on the outskirts of Rangpur, Bangladesh, and will be commissioned within 13 months from the date of allocation of the project. The Bangladesh Power Development Board has signed a construction agreement with Intraco, as well as a power purchase agreement (PPA) to procure the power generated at $0.16 per kWh for 20 years. The project is being financed by Dhaka-based Infrastructure Development Company and some local banks.

anada-based solar power company Canadian Solar has acquired 80.6 MW of solar PV project at Guimarania, Brazil. The company will use solar modules manufactured at its local factory in Sao Paulo for the project to meet Brazil’s domestic content requirements mandate. The company is expected to start construction in the first quarter of 2018, with its completion scheduled in the fourth quarter of 2018. A PPA has been signed between Canadian Solar and Electrical Energy Commercialisation Chamber, Brazil for 20 years at a fixed tariff of $92 per MWh.

fghanistan’s National Procurement Authority has issued tenders for the construction of three hybrid solar power plants with a cumulative capacity of 55.5 MW. While a 40 MW project will be developed at the Hisar-e-Shahi Industrial Park, Jalalabad, 10 MW will come up at Khost province and the remaining 5.5 MW at Daykundi province, Afghanistan.

ingapore-based renewable energy firm Equis Energy has been awarded a contract by Taiwan’s Ministry of Economic Affairs’ Bureau of Energy to develop a 70.2 MW solar project at Yizhu in Chiayi county, Taiwan. The construction of the project is expected to begin in the first quarter of 2018, with the commissioning scheduled for mid-2018. A PPA for the offtake of power will be signed between Equis Energy and Taiwan Power Company for 20 years.

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“Photovoltaics will play a major role for India” Interview with Andreas Liebheit, President, Heraeus Photovoltaics What is the size of operations of Heraeus globally as well as in India? Germany-based Heraeus is a Fortune 500 portfolio company. We offer solutions to the renewable energy industry, as well as automotive, health and chemical industries. Last year we were awarded for being one of the top 10 family-owned companies in Germany. In 2016, our global businesses generated revenues worth Euro 21.5 billion. Heraeus and India are linked by a long standing and close relationship. The company has its roots in India since the 1930s and its businesses have been active in the country for more than 55 years. Heraeus and its joint ventures are amongst India’s most renowned companies for precious metal products, specialising in the manufacturing of high-tech precious, and specialty metal products and solutions. Overall, Heraeus manufactures at four sites in India and has around 500 employees in the country.

ship with PV manufacturers such as Tata, Mundra (Adani) Solar, Indosolar.

What opportunities do you perceive in the Indian solar PV market? The Indian government has determined the energy sector as one of their key focus areas for the next 15 years. Energy will be one of the driving forces for the country’s objective to build a modern industrialised economy, to develop its rural areas and to triple its GDP by 2035. Photovoltaics (PV) will play a major role for India. After a string of federal auctions, electricity from solar PV has become the cheapest source of energy. However, domestic PV manufacturing is still small and the industry is looking for ways to improve the efficiency of its solar cells. Heraeus has therefore launched major local customer initiatives to boost the Indian PV industry and make it a world leader. Heraeus has established a dedicated local sales team in India and intensified its customer relationship in order to offer secure supply chain to our customers. The company has also increased dedicated resources at its Engineering & Technology Center in Singapore to speed up the customisation of silver pastes for Indian cell manufacturers.

What will the key factors driving costs and pricing? We believe that the average efficiency in India today is around 18 per cent, the top ten global manufacturers, however, are between 18.5 and 18.7 per cent. This means there is still significant scope in the reduction of cost/watt through efficiency gains. These gains can be achieved by delivering efficiency in both product performance and operational excellence. The combined effect of this would be 20 per cent manufacturing cost reduction in the next five years.

Who are your key clients and partners in India? With 40 per cent market share, Heraeus is the world’s leading company in silver metallisation paste and the only company in the industry offering products for all solar cell architectures and PV technologies, ranging from n-type, black silicon and PERC to double printing and knotless screen. Heraeus Photovoltaics holds several efficiency records in these technologies and is constantly increasing the efficiencies of its products with PV experts in its five research and development (R&D) centers all around the world. Our objective is to win efficiency records along with our Indian customers. We have a very strong collaborative relation-

What are the company’s plans and outlook for the Indian market? The outlook for the market is set by the Indian government. Prime Minister Narendra Modi aims to boost PV installations from 12.5 GW at present to 100 GW by 2022. This corresponds to the capacity of around 100 nuclear power plants in just over five years. This is a significant challenge and we want to be India’s leading partner for the PV market. We are focused on the needs of our Indian customers. With our new sales office in Delhi we will ensure our customers receive fast response and top-notch customer service. In the near future, we are also planning to introduce some of our industry-leading metallisation pastes and cell optimisation services so that Indian PV manufacturers can realise cost savings through efficiency gains. We expect that with these cost savings, Indian PV manufacturers will be able to compete strongly against other established global PV manufacturers.

What are the key issues and challenges? From our perspective, teaming up in innovation is the key to overcoming challenges faced by the industry. Heraeus is investing heavily in R&D within the whole value chain. However, only strong IP protection enables companies such as Heraeus to continue investing heavily in cutting edge innovation that will have exponential reduction in the levellised cost of electricity. In addition, it is important to oversee the entire renewable energy value chain, from production to distribution via grids up to storage of renewable energies. We believe that in the next five years, the levellised cost of electricity of renewable energy systems will decrease by 50 per cent. What are the key technology trends that you foresee in the PV space globally? In the near future, we see Mono PERC technology capturing a dominant share in PV manufacturing. In the next few years, we also expect the line widths to decrease from the current 35 micron level which will have a big impact on cost reduction and increased cell efficiency. All this will result in at least 20 per cent drop in the manufacturing cost per watt in the next five years in the PV industry only. ■

NEWS BRIEFS

he Asian Infrastructure Investment Bank (AIIB) will grant $210 million as debt financing for the construction of 11 solar plants aggregating 490 MW in Egypt. Some of the notable projects to be financed under this scheme are a 50 MW plant to be developed by Taqa Arabia SAE; a 50 MW facility to be developed by Shapoorji Pallonji Infrastructure Capital Company Private Limited; a 50 MW solar park to be built by a consortium of Phoenix Power Venture SAL, Infinity Solar Energy SAE and Ib Vogt GmbH; and a 20 MW installation being planned by a consortium of Al Tawakol Electrical, Enerray Spa, Desert Technologies Industries Company Limited and Spectrum International for Renewable Energy. Funds for the project are being provided by a syndicate of lenders including AIIB, on a limited recourse project finance basis. These projects are a part of the 1.8 GW Benban solar complex located in the city of Aswan, Egypt.

olombia-based renewable energy company Celsia SA has commissioned a 9.8 MW, Celsia Solar Yumbo solar PV plant, at Valle del Cauca, Colombia. The plant consists of 35,000 solar panels spread over an area of 18 hectares in Yumbo. The PV facility was developed by local power utility Empresa de Energia del Pacifico SA, a subsidiary of Celsia. It is the first large-scale solar generation PV plant to deliver energy to the country’s National Interconnected System.

rance-based Ciel et Terre is building a 2.55 MW floating PV system on a pond in Tsu, Japan. China-based Jinko Solar will supply the PV modules, while Spain-based manufacturer Power Electronics Espana SL will provide inverters. The EPC contract for the project has been handed over to Super Tool ECO Company Limited. The electricity generated from the plant will be sold to Nagoya-based utility Chubu Electric Power for a period of 20 years at $0.22 per kWh.

pain-based solar tracker manufacturer Soltec will supply 1,330 units of single-axis trackers to Quebec Energy to be used at the Assuruá PV power plant, Bahia, Brazil. The trackers will be used to mount 319,200 cadmium telluride, thin-film modules, which are expected to generate 78 GWh of energy annually. The project agreement requires the company to produce 60 per cent of the tracker parts domestically in Brazil.

apan-based solar project developer Renewable Japan has been granted $42.7 million from Barclays Securities in the form of project bonds. The grant will be used for constructing a 14.5 MW solar project in Kyoto, Japan. The bond carries a repayment term of 23 years. Hitachi Capital Trust served as trustee in the transaction.

witzerland-based utility Energiedienst Holding has acquired 51 per cent stake in Winsun, a Swiss start-up focusing on the development and engineering of PV projects as well as sale and marketing of PV systems. The financial terms of the transaction have not been disclosed. 18 ● Renewable Watch ● September 2017

hailand-based renewable energy company Padaeng Energy has acquired six solar projects from Symbior Elements Holdings Limited totalling 30 MW of capacity. The acquired solar projects consists two 8 MW projects and one 3 MW project located in Prachinburi, a 6 MW and a 4 MW solar project in Samut Sakhon, and a 1 MW solar project located in Khon Kaen, Thailand. The total cost of acquisition is $39 million. A PPA for the offtake of power has been signed between Padaeng and the Provincial Electricity Authority for 25 years.

iemens Gamesa Renewable Energy (SGRE) has been selected by NextEra Energy Resources to repower two wind farms in Texas, USA. The two wind farms currently feature Siemens SWT2.3-93 model turbines. Under the repowering programme, these will be upgraded to the SWT-2.3-108 model, which is expected to lead to 25 per cent more annual energy production, boost reliability and efficiency, and extend the service life. The wind farms will remain operational during the repowering process and project completion is scheduled for the end 2017.

apan-based Pacifico Energy has started building a 42 MW solar project at Iwaki in Japan. The modules for the project are being supplied by China’s Trina Solar, while Japan-based Toyo Engineering will provide the EPC facility. The project, which is spread across an area of 50 hectares, is expected to generate about 48 GWh of electricity per year following its completion in August 2019. The entire electricity generated will be sold to regional utility Tohoku Electric Power.

ussia-based solar module producer and project developer Hevel Solar has started constructing a 15 MW solar project at Astrakhan in Russia. The project, called Niva, is the first of a total portfolio of 165 MW that Hevel plans to build in Astrakhan in the coming years. It is looking to commission two solar parks of 60 MW each in the region next year, and the construction of another 30 MW project in 2019 is under consideration.

ustralia-based Dyesol Limited, a manufacturer of third-generation PV technology, has raised $4.2 million from shareholders. The funds will be used for the Major Area Demonstration Prototyping Project. The technology scale-up project has already attracted a conditional $4.77 million offer from the Australian Renewable Energy Agency. The remaining funds for the project have been contributed by Tasnee as convertible notes.

extEnergy Solar Fund, a UK-based investment fund focused on operational solar PV projects, has acquired two solar projects totalling 21.7 MW for $34.2 million. The projects, Bay Farm, which has a capacity of 8.1 MW, and Honnington, which has a capacity of 13.6 MW, are both located in Suffolk, UK. The projects were connected to the grid in March 2014 and are accredited under the 1.6 Renewable Obligation Certificate regulations. With this acquisition, the company’s total portfolio has surpassed 500 MW. ■

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Bleak Times Wind project pipeline dries up By Dolly Khattar

energy. A case in point is ReGen Powertech, one of the country’s top five wind turbine-makers, which has recently shuttered a factory in Udaipur, Rajasthan, and laid off workers. “We all have extra capacity, so it was a good decision to restructure to stay lean. We operate from the 1 GW factory in Andhra Pradesh and have reduced staff strength from 1,700 employees to 1,300,” said Madhusudan Khemka, managing director, ReGen Powertech, to a news daily recently. In yet another instance, in May 2017, turbine-maker Inox Wind stated that it had stopped all manufacturing after 700 MW of orders won under the previous FiT regime became a “piece of paper” when states stopped signing PPAs. Other manufacturers have also been impacted. Suzlon Energy Limited’s revenue fell by 46 per cent in the quarter ended June 2017 compared to the previous quarter. Siemens Gamesa, the biggest wind turbine supplier in India for the last three years, saw a 7 per cent drop in revenues in the quarter ended June 2017.

he turbulence in the wind power segment is getting worse by the day as the industry is at loggerheads with the government regarding multiple issues, most of which stem from the ongoing process of migration from the feed-in tariff (FiT) regime to a competitive biddingbased project allocation mechanism. The process has not only brought down tariffs to an all-time low but has also brought the industry to a standstill, even as project visibility remains bleak. Financial unsustainability has become a prime concern for the industry as the ongoing project development has been jeopardised due to the state discoms demand20 ● Renewable Watch ● September 2017

ing a renegotiation of power purchase agreements (PPAs) at lower tariffs, comparable to the winning bid of Rs 3.46 per kWh achieved in India’s first wind auction in February 2017. Discoms are known for discouraging wind power offtake through grid curtailment and payment delays to compel developers to offer a discount. As a result, the pace of capacity addition has slowed down significantly. Over 5,400 MW of wind power capacity was added in 2016-17, but it was barely 228 MW for the first quarter ended June 2017. As a trickle-down effect, wind turbinemakers are staring at a slowdown even as the government looks to boost renewable

All these are indications of the challenges facing wind turbine manufacturers as they adjust to an auction system that is putting a question mark on how much wind energy will actually get built. According to D.V. Giri, secretary general, Indian Wind Turbine Manufacturing Association, roughly 2 GW of wind turbines will probably be produced in 2017-18 against the earlier expectation of 6 GW, leading some manufacturers to idle their facilities.

The auction saga The trouble started when the government shifted from the FiT regime, which guaranteed price protection, to competitive bidding. The bid tariff of Rs 3.46 per kWh quoted in February 2017 was 17 per cent lower than the lowest FiT of Rs 4.16 per unit in the country. This prompted several discoms to openly voice their reservations on honouring the PPAs and letters of intent (LoIs) for nearly 3 GW of capacity in the pipeline. These include Andhra Pra-

T R E N D S & D E V E LO P M E N T S desh discoms, which have cancelled 1.1 GW of capacity, Gujarat 250 MW, Karnataka 900 MW and Tamil Nadu 500 MW. All these discoms had signed PPAs/LoIs at FiTs that were much higher than the recent bid tariffs. If the discoms do have their way, a downward revision in PPA tariffs would adversely impact the returns of wind power projects that are already constructed but are awaiting power offtake. It is estimated that a Re 0.10 per kWh reduction in tariff impacts the equity internal rate of return by 80-90 basis points. It could also lead to a spate of court cases and litigations, and hence more expenses. Financial institutions too will become more cautious about lending to these projects, considering the fact that even relatively well-performing discoms are renegotiating PPA tariffs, without any legal grounds or force majeure conditions. Above all, these developments cast a doubt on the enforceability of contracts signed by government entities. At a recent Renewable Watch conference on “Wind Power in India”, Anand Kumar, secretary, Ministry of New and Renewable Energy, acknowledged, “The entire issue of dishonouring of PPAs and revisiting PPAs affects the confidence of investors. Actions like what happened in Karnataka have shaken the confidence of investors, which is not good for the industry. The ministry is very clear that all contracts must be honoured.” For now, the government has put on hold the auctions for 1 GW of capacity, which were to be held by the Solar Energy Corporation of India (SECI) on September 19. While this may, at first, seem to be a negative development, the industry is viewing it in a positive light as it gives it time to calibrate a more rational bid, given the prevailing issues and market conditions. In the meantime, the Central Electricity Regulatory Commission will also decide on a petition filed by Power Grid Corporation of India Limited (Powergrid) on the unavailability of bays for grid connectivity for wind

and solar projects. The industry wants grid connectivity to be ensured before getting into the reverse bidding process. According to industry sources, a crisis seems to be brewing in the wind segment owing to the slow pace at which Powergrid is granting connectivity. If this continues, it may be several months before the logjam is eased. Firms that won projects in the wind auction held in February have also been hit by the lack of interstate transmission access. While wind power producers like Mytrah and Orange have been granted transmission access for only 300 MW of capacity each in the top two substations of the country, located in Tamil Nadu and Gujarat, equipment manufacturers such as Suzlon and Inox have transmission access for 1,400 MW and 1,500 MW respectively in the same substations though they have no immediate need for the connectivity. The connectivity applications by Green Infra, one of the winners in the February auction, are still under process with Powergrid. If transmission points continue to be allotted on a first come, first served basis rather than on project readiness, many wind IPPs would be deprived of access to Powergrid’s bays, while several firms that do not currently have operational capacity have access to the grid.

Getting the fundamentals in place While there is no denying that the industry is going through a tough phase as there are multiple problems regarding the upcoming wind power capacity, the supporting

infrastructure and domestic manufacturing, this may be looked upon as a transition phase that may bring in greater transparency and efficiency in the segment. The auction process will ensure that bids are at a realistic level, bringing value to the whole process. For instance, earlier project sizes were in the range of 25-50 MW, with a few projects going up to 150 MW. With the new auction-based allocation route, project sizes have gone up to 250 MW, which brings in efficiencies of scale. Moreover, there are emerging means of financing that provide capital at a lower cost. In addition, newer technologies and evolving wind turbine generators have increased plant load factors, all of which translates into a lower levellised cost of electricity. Regarding the issue of payments, the Ujwal Discom Assurance Yojana has so far been working well. If the scheme delivers positive results, the issues of payment delays and defaults will be taken care of. For wind power curtailment, an encouraging trend of increased emphasis on scheduling and forecasting is being witnessed. This would certainly address the issue of curtailment. “Whenever there is an issue of curtailment, developers have the right to protest because curtailment cannot be done without due reason,” said Kumar, reiterating the government’s stance on providing must-run status to all forms of renewable energy. In a recent debate on must-run status in Madhya Pradesh, the government took cognisance of this matter and issued an advi-

Tamil Nadu auction results As the wind industry is still coming to terms with the record low winning tariff bid of Rs 3.46 per kWh under the SECI-conducted auction, the first state-level auction in Tamil Nadu has thrown up a new tariff low of Rs 3.42 per kWh. Tamil Nadu Generation and Distribution Corporation Limited had sought bids for 500 MW of wind capacity with a ceiling price of Rs 3.46 per kWh. In response, three developers bid for a total of 950 MW of capacity – ReGen Powertech, which offered 250 MW at Rs 3.42 per kWh; Leap Green Energy, which bid for 200 MW at Rs 3.43 per kWh; and NLC India Limited, which bid for the entire 500 MW capacity at Rs 3.45 per kWh. Due to the bid results, the state utility is keen on signing contracts with all three developers and has sought regulatory approval for the full 950 MW of capacity. However, this development will further compound the problems of wind power developers struggling with utilities that are refusing to sign contracts based on FiT rates.

September 2017 ● Renewable Watch ● 21

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sory to all state governments that mustrun status has to be honoured. A key aspect that needs to be addressed is the lack of project visibility. To this end, the bidding pipeline should be made more transparent so that companies can plan their finances and strategies accordingly. Also, there should be guidelines for states to help them conduct the bidding with clear dos and don’ts. Similar to

the central-level bids, PPA risks also need to be addressed for state-level bids as well as through robust payment security mechanisms. Given the recent developments in the wind space, 2018 could well be the worst year for new wind installations in more than a decade in India, as there is hardly any new capacity under construction. The projects won under the first SECI auction

Recent wind power auction results Tamil Nadu auction, August 2017 Winners

Tariff (Rs per kWh)

Capacity (MW)

Regen Powertech

3.42

250

Leap Green Energy

3.43

250

Neyveli Lignite Limited

3.45

400

Tariff (Rs per kWh)

Capacity (MW)

3.46

250

SECI 1 GW auction, February 2017 Winners Mytrah Energy Green Infra

3.46

250

Inox Wind

3.46

250

Ostro

3.46

250

Adani

3.46

Source: Media reports

22 ● Renewable Watch ● September 2017

are hugely delayed due to transmission issues, ongoing FiT-based PPAs are up for renegotiation and projects under the second auction conducted by SECI will be awarded only post-October 2017. The only projects to see the light of day will be the 950 MW of capacity auctioned in Tamil Nadu and that too, only if transmission infrastructure does not become a hurdle. Fortunately, the industry has withdrawn its petition against the Tamil Nadu auction, otherwise that could have put even these projects in jeopardy. The developers had contested the holding of the auction when a price of Rs 4.16 per kWh had already been set by the state regulator in its tariff order and was valid till April 2018. Against this backdrop, it is expected that the Indian wind industry will see a revival only in 2019; that too, if 2-3 GW of wind projects are auctioned in the next six months, as project development is a 1218-month-long process. Once the initial hiccups are over, going forward, project allocation through auctions is likely to prove to be a favourable policy change for the industry. ■

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

Smart Renewables Powering urban infrastructure development By Ashay Abbhi

ndia is in the process of developing its renewable energy technologies in a bid to ensure a sustainable power system. The evolution of existing renewable energy technologies to smart renewables will help power economic growth. As such, the focus currently is on developing a roadmap for the integration of renewable energy with the smart initiatives being taken by the government. At the recently held World Renewable Energy Technology Congress, 2017, industry stakeholders including developers, policymakers, manufacturers and academics discussed the future intersection of smart cities, smart rooftop and smart grids… India is developing 100 smart cities, of which work is currently in progress for 20 cities. These cities will have planned infrastructure and land use, smart accommodation, and smart transport and governance, besides being equipped with smart

24 ● Renewable Watch ● September 2017

grids that will not only monitor but also empower citizens to regulate their power consumption. At the cusp of this union lies the proposal to partly power the smart cities through renewable energy sources, with a minimum of 10 per cent power being generated through solar.

Smart rooftop solar Rooftop solar forms an essential part of the smart cities development programme, with a mandatory 10 per cent of power to be procured from this source. This is primarily aimed at addressing various issues that exist in the sector, such as voltage instability and intermittent power supply. According to Kanika Khanna, chief technical officer and director, Sunkalp Energy, rooftop solar can be used to solve the problem of voltage instability arising from solar power being fed into the grid. Moreover, given the issues regarding payments from utilities, rooftop solar could prove to be a way out. Inverters used for rooftop

solar power generation can feed reactive power into the grid. However, standardised communication among devices will have to be enabled, making them smarter for smooth grid integration. This would further enable the use of smart technologies for peak power management, thereby flattening sudden spurts in the demand curve. The Solar Energy Corporation of India (SECI) is playing a key role in developing policies for rooftop solar. According to R.K. Jain, additional general manager, SECI, the corporation has commissioned 100 MW worth of rooftop solar projects and has about 1,000 MW of projects in the pipeline. SECI is bringing out two schemes for the promotion of smart rooftop technology – a 500 MW tender for residential, institutional and non-governmental organisation-owned buildings and customers, and a 1,000 MW programme for government buildings. Rooftop solar power systems not only help overcome the usual challenges associated with grid-based power but also lead to considerable savings over the lifetime of the system. Pratyush Kumar Thakur, chief operating officer, Statkraft BLP Solar, estimates the savings to be around Rs 13.8 million over a 25-year period for a 100 kW power system installed in opex mode. However, the smartness in rooftop systems comes into play at the design

T R E N D S & D E V E LO P M E N T S stage. There should be minimum deviation in the design of the final on-site system from the planned design, to which end a proper assessment of the rooftop site is necessary. Often, structures present on industrial rooftops act as obstructions, which must be cleared before taking up a project. Load consumption should be matched with the capacity of the installation and excess generation must be managed either through net metering and/or energy storage systems.

Smart grids Power outages, planned or unplanned, are a major issue for a developing urban society and can be especially detrimental to the quality of life expected in a smart city. G. Ganesh Das, head, strategy, business excellence and collaborations, digital and business intelligence, Tata Power Delhi Distribution Limited, believes that smart rooftop solar can be a solution for integrated outage management. Advanced integrated management systems such as supervisory control and data acquisition, advanced metering infrastructure and operational management systems have a significant role to play in the development of smart solar systems. The company has pledged to install 400 MW of rooftop solar projects by 2025. Das believes that grid infrastructure is changing for the better on the back of the government’s green energy corridors and smart grid initiatives. However, the integration of smart grids into the existing grid infrastructure is necessary to enable a better grid. Self-healing networks are being introduced in the country to minimise downtime and maximise grid efficiency. In addition, it is becoming increasingly important to develop the ability to manage overall power instead of only peak power, which occurs for a short duration. Moving to a smart grid-based power distribution and transmission infrastructure is becoming even more essential as the country grapples with ageing components and the resultant power losses in lines. This, in addition to the inability of the government to provide good quality power to

end consumers despite being power surplus, further illustrates the need for a complete system overhaul. Tarlochan Kaur, head, Department of Electrical Engineering, PEC University of Technology, Chandigarh, believes that these challenges are often drivers of distributed systems. Given the emerging cost trends for solar power plants, decentralised systems prove to be beneficial, especially in the wake of new loads such as electric vehicles. Also, the use of storage solutions along with distributed generation provides the smart factor required for future development of the segment. Storage helps decouple the supply and demand parameters while answering questions of when to charge or source power and when and how much load should be discharged. The inclusion of energy storage systems in solar systems can greatly enhance the function of solar power in smart grids and microgrids, which are an essential part of distributed power systems.

Smart cities With power generation, transmission and distribution on the path to becoming smart, energy management at the consumer end assumes significant importance in a smart city set-up. Energy management would require a self-healing power network that has the capability to not only prevent faults, but also detect and rectify them. According to Anil Poluru, head, utility, India, Trinasolar, grid infrastructure must take a step further by being able to communicate with devices to analyse consumption patterns and predict load based on the information. Upgrading the existing infrastructure to a smart grid network will help resist attacks, optimise assets and efficiently maximise the use of power fed into the system. By bringing together elements such as smart rooftop power generation and smart grids, smart cities are expected to solve key urban challenges. According to Arun K. Tripathi, director general, National Institute of Solar Energy, the scope of smart cities extends beyond energy, utilities,

waste management and infrastructure and goes deep into making smart citizens. However, successful implementation of the programme inevitably comes down to the use of smart energy. The issue of traffic management and pollution prevalent in major cities in the country can be handled through the increased use of electric smart vehicles. Also, the multiple wire-nets hanging in urban skies need to be managed to provide better quality power and prevent line losses in smart cities. Waste management including collection, transportation and storage can be done by employing smart waste-to-energy technologies such as plasma gasification that do not even require waste segregation. In addition, the use of building codes and building-integrated photovoltaics can help in demandside management of smart cities.

Conclusion In addition to the incorporation of smart renewables into urban infrastructure, the experts stressed on smart policy implementation. Randeep Bora, head, government business, Cleanmax Solar, cited Bhubaneswar as an example of one of the smart cities under development. He said that as per the smart cities mandate, Bhubaneswar requires 110 MW of power to be sourced from rooftop solar. However, the total rooftop solar potential of the city currently stands at only 40 MW. Therefore, the policies and targets for smart cities need to be set accordingly. Further, he believes that the uptake of rooftop solar will have to grow across the industrial and residential segments alike for the smart cities programme to succeed. The market for smart renewables is driven by the need to solve urban infrastructural bottlenecks that include inefficient power system utilities. With the growing share of renewables, grid networks will increasingly need to become smarter to allow smooth integration of the power thus generated. The development of smart cities is a step in the right direction where smart technologies come together with new and smart renewables to provide a better quality of life. ■ September 2017 ● Renewable Watch ● 25

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Growth Projections IRENA expects renewable energy capacity to reach 518 GW by 2030 By Ashay Abbhi

ndia’s ambitious renewable energy targets, strong climate change mitigation commitments and record capacity additions over the past two years have put it firmly on the global renewable energy map. Its position has been further strengthened with a steep decline in solar and wind power tariffs, making them among the lowest in the world. The quantum of capacity expected to be added over the next five years has generated significant interest and opened up the Indian market to international and domestic investors alike. Indian companies are collaborating with international agencies to facilitate growth and help the country achieve its targets. The International Renewable Energy Agency (IRENA) recently released a working paper, REMap: Renewable Energy Prospects for India, which outlines the country’s renewable energy prospects. It also provides projections till 2030. Renewable Watch analyses the projections, challenges, enabling strategies and outlook presented in the paper.

Key projections According to the paper, the share of renewable energy in the country’s total power generation will increase to 18 per cent by 2030. As compared to 14 per cent in 2010, the increase seems modest. However, this is relative to the significant growth projected in power consumption patterns over the next decade. The share of installed renewable power capacity is likely to reach 60 per cent of the total capacity by 2030. This projection surpasses the capacity addition targets defined by the government and the coun26 ● Renewable Watch ● September 2017

try’s intended nationally determined contribution of 40 per cent by 2030.

Solar The working paper projects the growth in solar power capacity installations to be about 196 GW by 2030, adding nearly 183 GW to the existing capacity of about 12 GW. This is based on the achievement of the government’s target of 100 GW by 2022. It is estimated that the solar capacity will grow by 1 GW per year until 2022 and 15 GW per year thereafter until 2030. The projected capacity accounts for 160 GW of utility-scale solar installations and 40 GW of grid-connected rooftop solar systems. Considering a capacity utilisation factor of 16 per cent to 19 per cent, the solar capacity is estimated to produce 350 TWh or 10 per cent of the country’s total power supply per year by 2030. While the government is working to enhance the rooftop solar capacity, there has been little progress so far. It is estimated, however, that by 2030, about 40 per cent of buildings would have either a solar thermal or solar power unit installed. This is based on a series of assumptions and the extrapolation of estimates avail-

able for the rooftop solar system in New Delhi, powered by the net metering model, which has recently gained traction in the international market. New Delhi’s total rooftop area stands at 31 square km, which provides space for an estimated 2.5 GW of modules. Considering that about 1 per cent of the country’s population lives in the capital, the total rooftop potential can be calculated at 250 GW. Of this, it is assumed that 50 GW or 20 per cent will be realised by 2030. Further, about 20 per cent or 150 million square metres of residential and commercial solar thermal systems will be installed by 2030. Apart from this, the paper expects a growth of 10 GW of concentrating solar power (CSP) plants during the period. This would require the installation of about 20-50 large CSP plants with 30 per cent efficiency by 2030. It is assumed that these plants will have little or no storage component due to its prohibitive cost. Moreover, power demand in India is partly for cooling systems, which require peak power generation during the afternoon, a pattern that aligns with the generation from CSP plants. With high solar radiation, Gujarat, Maharashtra, Jammu & Kashmir, Himachal Pra-

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

“There is significant potential for growth” Interview with Dolf Gielen, Director, IRENA Innovation and Technology Centre What are the current technology trends in the solar and wind energy space? We are witnessing rapid cost reductions in solar PV and wind energy technologies. The low-cost utilityscale projects being set up in Europe is a prime indicator of the technological success over the past year. The latest tender in Germany recorded tariffs of around 6 cents per kWh, while some utility-scale projects in other countries have achieved tariffs of 3 cents per kWh. In the wind segment, significant progress has been observed in offshore wind, where we have seen extremely low costs for a number of projects in Europe over the past year. Including grid connection costs, offshore wind currently costs about 7 cents per kWh, while onshore wind is being offered at roughly half the price. These trends are the result of continuous technology improvements, greater efficiencies, higher hub heights and a better financing environment. CSP prices are approaching the same level as solar PV, as discovered in some of the latest tenders in Australia. CSP, with a significant storage component, can be quite relevant in the Indian context as well. However, the progress in solar thermal technology has been rather limited, except for a gradual extension towards industrial applications at higher temperatures. What is IRENA’s perspective on the Indian market? There is significant potential for growth in modern renewable energy technologies in India. If the right policies are put in place, renewable energy could account for about a quarter of the total energy requirement and 33-40 per cent of the total power demand in India by 2030. How has the financing outlook changed with the evolution of renewable energy? What are the emerging trends in this space? Banks are at greater ease now, which translates into a shift from equity towards debt, thereby contributing to lower costs. Globally, the cost of financing is approaching a point where it becomes secondary to the overall cost of the project. However, we need to see how many of the low-cost projects in the latest tenders are realised. There are issues with the quality of project development because the margins are quite small for such projects. Moreover, shoddy installations can take off another 4-5 per cent of the returns. Therefore, maintaining standards for project development and installation is important. Are the low tariffs sustainable, especially in a market like India,

which has not stabilised fully yet? The price levels of Rs 2.44 per kWh discovered recently are roughly in line with those in international markets. The challenges associated with developing projects in India are to some extent home-grown and mostly infrastructural in terms of grid evacuation and access. Moreover, these are only offers for projects. It still needs to be seen what would happen if and when these projects are realised. Further, only the lowest offer is widely publicised and not every project will be developed at this rate. In most countries, we see a significant gap between the average price and the lowest price. Where are energy storage technologies heading? There is about 170 GW of pumped hydro storage and only 23 GW of energy storage. We see a growth in battery storage, but in different market segments. One segment is the use of batteries by utilities to help with grid stability and the other is using batteries in home solar systems, which is popular in countries such as Australia, Germany and the US (California). Therefore, this is a growing market fuelled further by the unique pricing regimes in these countries, which have high consumer electricity prices and relatively low wholesale prices. So, it makes sense for consumers to maximise their consumption, something that may not be applicable in India at present. What are the regulatory issues relating to renewables in India? There is a unique issue in India since along with the federal approach, states have significant control over electricity. This makes it difficult for private companies to achieve scale because each state needs to be approached separately. Meanwhile, ministers are lobbying for electric vehicles, which is a global trend but it will not manifest by itself. The government has an important role to play in terms of infrastructure development. What is your outlook for the Indian market over the next five years? The country’s overall electricity demand continues to grow rapidly. Also, since the starting point in terms of the present share in solar and wind energy is relatively low compared to other countries, the growth is much more pronounced. Moreover, the government is putting in place a framework that allows upscaling. For these reasons, IRENA believes that the Indian market can become one of the most important in the world in the near future. ■

September 2017 ● Renewable Watch ● 27

T R E N D S & D E V E LO P M E N T S desh, Uttarakhand, Tamil Nadu, Karnataka and Andhra Pradesh are expected to be the ideal locations for the installation of these power plants.

Renewable energy capacity and generation projections (2030) Energy source

Installed capacity by 2030 (GW)

Power generation by 2030 (TWh per annum)

77.0

246

196.0

310

Hydropower (excluding pumped hydro)

Wind

Solar PV

Onshore wind power capacity is expected to increase to 145-187 GW by 2030. This is based on the achievement of the target of 60 GW by 2022 and continued growth during the rest of the period, calculated to be around 8 GW of addition per year from 2017. Over the past two years, the wind power segment in India has seen record capacity additions, indicating that there could be potential for further expansion of the annual incremental capacity, forming the basis of the assumption in IRENA’s study. The offshore wind power segment, which has zero capacity at present, is expected to register between 0.5 GW and 3 GW of capacity during the study period. About 13 per cent or 470 TWh of power is expected to be generated through wind energy by 2030.

capacity by 2030. While the efficiency of bagasse-based combined heat and power plants is expected to increase significantly, the diversion of raw materials for the production of biofuels will affect generation from these plants. Another 4 GW is likely to be added through non-bagassefired plants by 2030.

Bioenergy

Hydropower

The growth of biopower in India has been restricted in recent years owing to increased regulatory and market focus on other sources of renewable energy. IRENA expects a capacity addition of 4 GW from biomass through co-firing of biomass with coal-based power plants. It is assumed that in addition to the co-fired capacity, 1 per cent of all coal-based capacity (310 GW) will be converted to co-firing plants by 2030. Further, stand-alone solid biomass power plant capacity is likely to reach 18 GW during this period. India’s biomass potential stands at 23 GW at present - 18 GW from agriculture and forest residues, and 5 GW from energy crops. However, given the logistical and supply issues associated with energy crops, no capacity is likely to come online from this source. According to IRENA, the capacity of waste-to-energy plants is likely to reach 4 GW by 2030, based on the growth in population, positive government policies and the thrust on better waste management. Bagasse-based cogeneration is expected to add 4.6 GW to the existing

With the impending inclusion of hydropower under the purview of renewable energy, IRENA expects the total installed capacity in this segment to increase to 77 GW by 2030 (excluding pumped hydro), as opposed to about 44.5 GW (as of May 2017). IRENA projects small-hydropower capacity to be about 1 per cent of the total installed hydropower capacity during the period. Generation from these plants is likely to reach 246 TWh per annum. At present, about 11.7 GW of hydropower capacity is under development, while about 5 GW is stalled. IRENA’s assumption is that this capacity will come online over the next few years, and another 15 GW will be added by 2030.

28 ● Renewable Watch ● September 2017

CSP

11.0

Wind

187.0

471

Biopower

26.6

105

Offgrid and rural renewables (solar, wind and biogas)

21.0

Subtotal

518.6

1,207

Non-renewable power

333.0

2,304

Total

851.6

3,511

Source: IRENA

Key challenges The Indian renewable energy market has opened up fairly recently and is currently experiencing teething challenges as the market moves towards self-sustainability, driven by policy adjustments. Its growth over the next decade will see challenges pertaining to the mobility of investments,

high upfront costs and revenue uncertainty fuelled in part by low tariffs, poor grid integration and the regulatory issues surrounding energy storage solutions. Further, IRENA expects policy-based issues in business environments, especially in the current federal and state structure of renewable energy development, power being a concurrent subject. Moreover, better technology at cheaper costs would need to be made available for decentralised energy production and storage solutions.

Enabling strategies The actions required to achieve the intended national targets as well as the projections given by IRENA have already begun to take shape. Better enforcement of renewable purchase obligations, hassle-free land acquisition policies, prioritybased financial lending for the sector and the setting up of green banks and funds along with greater renewable energy access are some of the recommendations made in the working paper. In addition, the creation of an enabling business environment for domestic and international companies to mitigate red-tapism and focus on project development while reducing risks is essential. Moreover, grid integration strategies and the use of innovative technologies will help improve power offtake and result in the overall development of the renewable energy sector to achieve the installed capacity levels as projected. ■

DHANUSH ENERGY LIMITED BUSINESS ASSOCIATES: Dhanush Infrastructures Pvt. Ltd., Boyapati Solar Pvt Ltd., Ammu Abhi Solar Pvt. Ltd., Mahalaxmi Properties, Belmin Ventures Pvt. Ltd., Shri Kenchamba Solar Pvt. Ltd., Patel Shanthi Steels Pvt. Ltd., Athnoor Solar Pvt. Ltd., Arvind Exim Inc, N.Gajendran & Co., Bhagwan Aditya Powers Pvt. Ltd., N. Kotappa Naidu & Co., Solaries Vigour Pvt. Ltd., Anushree Greentech India Pvt. Ltd., Vajrakaya Energy Pvt. Ltd., Trisha Engineers , A. Veeraswamy & Co., D. Jayarama Reddy & Co, Anand & Associates

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

Power from Scrap Energy generation emerges as an effective means of waste management

he growth of municipal waste is directly linked to the population and economic progress of a town, city, state or a country. With a population of around 1.34 billion, India generates about 80 million tonnes of waste each year. This is expected to grow up to 430 million tonnes per year by 2050. Of the total waste generated per year, 80 per cent goes into landfills while less than 20 per cent is treated or recycled. Therefore, the existing landfills are reaching their maximum capacity and there is a growing industry consensus that proper waste disposal techniques will be needed in the near future. Waste-to-energy (WtE) plants have rapidly emerged as an effective solution for waste disposal. According to the Ministry of New and Renewable Energy, India has the potential to generate about 1,700 MW of energy from urban waste including municipal solid waste, sewage and industrial

30 â&#x2014;? Renewable Watch â&#x2014;? September 2017

waste. As of June 30, 2017, the total installed capacity of grid-connected and offgrid WtE plants in India stood at 114.08 MW and 73.29 MW respectively. During 2017-18, no grid-connected WtE capacity has been added so far against the target of 10 MW. Meanwhile, only 2.2 MW of capacity has been added to off-grid WtE plants against the 15 MW target.

Key advantages WtE plants not only provide clean and continuous baseload power, but also address issues concerning the storage and disposal of waste. In addition, in these plants power can be quickly ramped up or down to balance the sudden loss or increase in power and can therefore support renewable energy integration. The technology can also reduce SOx, NOx and greenhouse gas emissions in the atmosphere. Further, logistical issues involved in the transportation of waste to landfill sites which may be located over

long distances can be avoided. The expansion of the industry is expected to create job opportunities for both skilled and unskilled labour. To this end, the Council for Skill Development is in the process of formulating an innovative plan to train waste pickers to make handloom artefacts from segregated waste items. Long-term and improper waste storage in landfills may lead to leakage of harmful elements, which can contaminate the soil and groundwater. This can be easily prevented by converting the waste into energy. According to Walter Howard, chief executive officer, Alter NRG Corp, India is facing a public health problem associated with waste, which can be overcome using the technology available across the world. Therefore, an indirect benefit of WtE generation can be the improvement of lifestyle and eradication of multiple health issues prevalent in communities residing near waste disposal sites.

T R E N D S & D E V E LO P M E N T S The by-products from a power generating unit such as oils, gas and solid waste can be sold to industries or consumers, thereby generating additional sources of income for the plant owner. For instance, the plastic waste recovered can be mixed with tar to increase the life of roads or synthesis gas generated in converters can be used to produce electricity or can be refined into other valuable products such as synthetic natural gas, ammonia and ethanol.

sources of power generation. Incineration plants are susceptible to backlash from residents and non-governmental organisations in case the air quality in these plant sites deteriorates. Therefore, WtE plants will require stringent air pollution norms and implementation guidelines in order to maintain clean air in areas surrounding the WtE plant given that India is already grappling with the improper adoption of air quality norms for thermal power plants and urban transport.

Issues and challenges The implementation of the emerging WtE technology requires proactive government intervention. With the current impetus to achieve solar and wind energy targets, the WtE segment has not received enough policy focus. Although research is being promoted by the government to develop innovative WtE solutions, the implementation of technologies that are available has been rather sluggish. The segregation of waste continues to be the biggest challenge for large-scale technology adoption. A proper waste management cycle is necessary to derive maximum benefits from the technology. Organisations are also facing a scarcity of funds for pilot projects primarily due to the lack of information regarding the technology and competition from alternative

WtE plants under various stages of construction or tendering (as of November 21, 2016) State Andhra Pradesh

No. of plants

Total proposed capacity (MW)

85.0

Assam

5.0

Bihar

12.0

Chhattisgarh

10.0

Delhi

1.6

Gujarat

30.5

Haryana

18.5

The way forward

Himachal Pradesh

1.7

Considering the inherent benefits of the technology, the government can focus on developing WtE to realise its renewable energy targets. The identification of a proper value chain for WtE generation will be extremely important to make the waste management process profitable and self-sustainable.

Jammu & Kashmir

6.5

Jharkhand

23.0

Karnataka

20.0

Kerala

10.0

Madhya Pradesh

32.0

Maharashtra

28.5

Manipur

1.0

Odisha

11.5

In a recent move, the Ministry of Environment, Forest and Climate Change directed that activities such as segregation, composting, refuse-derived fuel production and setting up of WtE plants with up to 15 MW of capacity at existing landfill sites do not require green clearance, thus fasttracking the construction of WtE plants. Several WtE projects have already been tendered. The industry opines that subsi-

Punjab

16.0

Rajasthan

26.0

Tamil Nadu

8.0

Plasma gasification: A practical WtE solution for India Plasma gasification is an efficient WtE generation technology that can process unsorted raw garbage, which has low calorific values. This can be extremely beneficial for India where waste segregation plans have failed miserably. The technology uses intense heat to break molecular bonds in the waste materials and turn them into useful products such as synthesis gas. It creates electric arcs, similar to lightning, by pushing air to create plasma reaching temperatures close to 5,000 degrees C. Such advanced thermal treatment processes can assist in diverting 98 per cent waste from landfills. Plasma gasification plants can process multiple waste streams simultaneously such as municipal solid waste, feedstock, industrial waste, hazardous material and medical waste, and can handle waste with high moisture content. As compared to traditional incineration technologies, the plasma process does not generate bottom ash and can potentially be used to provide high-value downstream products such as liquid fuels in the future. Reportedly, 600-1,000 tonnes per day (tpd) of waste processed in plasma gasifiers is reduced to only 24-40 tpd, which can either be disposed of in a landfill site or can be reprocessed in the gasifier. The technology has been in operation since 2002 and has seen commercial success in many countries. Large-as well as small-scale modular options are currently available in the market but the country is yet to see its large-scale application.

Telangana

11.0

Uttar Pradesh

25.0

West Bengal Total

22.5

405.3

Source: Press Information Bureau

dies and active government support will be required for promoting WtE projects till the market evolves and competition drives down costs to make the projects economically viable. To this end, funding mechanisms and regulations should be put in place. Government agencies need to realise that stalling of large-scale WtE projects could prove to be detrimental and large funds need to be diverted for waste management in metro cities. The authorities need to ensure proper formulation and strict execution of policies to support the technology. WtE technology has seen success in multiple countries such as Japan, the US and China as well as in the European Union countries. India can also harness energy from waste, cleaning the country one landfill at a time. â&#x2013; September 2017 â&#x2014;? Renewable Watch â&#x2014;? 31

Precise String Monitoring Need for innovations to improve O&M efficiency Stable communication technologies

or traditional central solutions, the monitoring data is acquired through a DC combiner. However, recently built projects have been using combiner boxes without string monitoring. All the data collected relies on the central inverter DC input, and only 3 per cent precision can be achieved. Moreover, there are hundreds of strings connected to the central inverter. It is very difficult for operators to do troubleshooting among thousands of photovoltaic (PV) panels. Owing to the low accuracy of the detection components, the displayed string current and voltage can not truly reflect the actual operating states. Without precise monitoring of current and voltage, the inverter cannot track the maximum power point, thus causing energy losses. Furthermore, without string monitoring, big troubles may occur during project commissioning and lifetime opera-

tions and maintenance (O&M). The results generated by the background monitoring system based on voltage and current values are not instructive. This may result in misjudgment, which will create unnecessary workloads and material for troubleshooting. System shutdown in the troubleshooting process will affect the power generation. In the Smart PV Solution, the detection precision of Hall Effect sensors can reach 0.5 per cent, which is much higher than that of the SMUs in DC combiner box, in terms of detecting the voltage and current of PV strings through highfrequency difference algorithm compensation and high-precision instrument calibration. Moreover, the string status can be monitored in real time, alarms are automatically generated in case of errors, and faulty PV strings can be accurately located.

In the Smart PV System, data is transmitted among PV arrays over power line carrier communication (PLCC), while transmitted inside the PV plant via optical fiber, which contributes to more precise smart string detection. PLCC substitutes for RS485, dramatically improving the transmission rate from 9.6 kbit per second (19.2 kbit per second at most) to 200 kbit/s. By using power cables as transmission channels, no dedicated cables need to be routed, which saves the expense on communication cables and construction by Rs 0.09 per watt. The RS485 solution, by contrast, requires a complex construction and underground cable routing. The PLCC solution features high reliability and excellent maintainability because AC power cables are used for transmission, and only faulty modules need to be replaced when the communication fails. On the other hand, an RS485 communications cable is likely to lead to broken connections, which may affect communication. If a cable is broken, it needs to be dug up and replaced. In general, PLCC can eliminate the use of communication cables and improve the reliability. A 20 MW PV plant using Huawei 43KTL inverters was commissioned in May. Problems found on the strings, such as reverse connection, ground faults and panel breakage, have been solved easily by the string monitoring interrogated in the inverter. Only two people undertook all the activities, which were completed in a week. In contrast, in a 30 MW project using central inverters, it takes over a month to track the fault cables with more than five operators. Therefore, the monitoring system can find the real fault and correct

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the fault in time to increase power generation and improve the operations and maintenance efficiencies.

Smart I-V scanning

Benefit 1: Timely Discovery of PV Module Faults z All PV modules in the PV plant are scanned rapidly and peri-

odically through annual inspection, to detect faulty PV strings. The timely processing of the faulty PV strings helps improve energy yield and prevents faults from propagating. z Carrying out I-V tests for PV strings with low output power on

an irregular basis helps in detecting and preventing faults. Benefit 2: Inspection Quality Improvement z The I-V curve can be used to accept PV modules after a PV

plant is constructed, detect faulty products, improve the PV plant quality and reduce the acceptance cost. z It tests the faulty PV strings reported by the system by com-

bining the I-V curve detection result. This significantly improves the PV plant’s inspection efficiency and the fault detection rate, and reduces the inspection workload. Benefit 3: High Automation z The one-click remote operation greatly reduces the PV

plant’s test intensity, requirements for test personnel and test cost. z Automatic analysis of I-V curves reduces requirements for

test personnel. z Automatic generation of reports reduces workloads for test

personnel. Benefit 4: Mining the Value of Historical Data z The system automatically collects statistics about PV string

fault types and the attenuation rate based on PV modules

Smart I-V scanning allows the inverter to export I-V curves, deploys algorithms on the management system, and analyses data. It also identifies modes to scan all PV strings of a solar PV plant and identify hidden PV module faults. For instance, Huawei’s SUN200043KTL requires only one second for scanning, and 10 minutes to output a report including data about a solar PV array in one-click mode, with no testing personnel and experts onsite. This significantly reduces the labour and cost requirements for testing. Test personnel are forewarned about the PV module faults using smart PV string diagnosis, and the health status of the PV plant can be estimated comprehensively to achieve proactive maintenance. The diagnosis precision and efficacy have been certified by TÜV. In a successful trial carried out at Huanghe Hydropower, it was found that 0.17 per cent of PV modules in a PV array were faulty. This is based on Huanghe Hydropower’s previous spotcheck ratio of 0.3 per cent; 97.6 per cent of these faulty PV modules would have escaped detection. The online I-V curve detection function enables the inspection of the features and health status of PV strings of large-scale PV plants. It facilitates O&M by detecting and processing low-efficiency PV strings, improving energy yields and preventing faults from propagating. The online I-V curve detection function has four key benefits which are mentioned in the box. The PV modules function as the main body of a PV system, making the PV module quality a vital consideration. Huawei’s smart I-V scanning technology is a significant step towards freeing solar PV plants of the consequences of PV module faults.

and their historical runtime. Using the collected statistics, it provides suggestions for the future construction of the PV

Summary

plant.

All in all, precise string monitoring helps in troubleshooting at the first place and reducing the operations and maintenance cost with high precision and smart I-V scanning technology. Huawei Fusion Solar Smart PV Solution is the first choice for power plant construction. ■

z When the array attenuation rate changes rapidly or a certain

type of fault propagates throughout the system, the PV plant owner can adjust the O&M policy accordingly. This improves the O&M efficiency, reduces costs and increases the plant PR.

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

Reviving Pumped Storage Operationalising PSPs to promote grid stability By Swarna Kesavan

he short-term power market has witnessed significant growth in the past few years. Against less than a 0.5 per cent share in the total power generation a decade ago, the share of power trading touched 4.4 per cent in 2009-10. More than 30 billion units (BUs) were traded in the short-term market in 2009, taking the total size of the market to Rs 190.2 billion. The segment is likely to attract further interest in the next two to three years as merchant capacity that is currently under construction becomes operational and participates in the short-term market. India is proactively working towards achieving the ambitious 175 GW by 2022 renewable energy target, which is over three times the current installed capacity of 58 GW. Wind and solar plants are subject to daily cyclic natural fluctuations as well as seasonal fluctuations, which lead to grid instability. To be able to smoothly integrate the planned renewable energy capacity, the grid must be prepared to provide quick response to handle huge amounts of variable power. This emphasises the need for energy storage as it can ease the introduction of very high shares of renewable energy, improve security and efficiency of electricity transmission and distribution, stabilise market prices and also ensure greater security of energy supply. World over, while new storage technologies are being tested, hydropower pumped storage plants (PSPs) continue to be the oldest and largest energy storage technology available for utilities.

ing mode during power-deficit situations in the grid. It provides other advantages like large grid storage and long discharge time, high ramp rate, voltage support, grid stability, black-start facility, balancing the grid for demand-driven or generationdriven variations and improving the overall economy of power system operation, besides increasing the capacity utilisation of thermal, solar and wind stations. PSPs are the only long-term, technically proven solution without any restriction of unit capacity. They are cost-effective, efficient, have operationally flexible energy storage on a large scale and available on short notice. On the flip side, PSPs are site specific, expensive, entail long construction times, and make obtaining environmental clearances difficult.

At present, India has nine PSPs with an installed capacity of 4,786 MW. Of these, only five PSPs aggregating 2,600 MW are working in pumping mode. Recognising the importance of PSPs to support the integration of renewable energy, the Central Electricity Authority (CEA), in June 2017, held a meeting with the concerned stakeholders for operationalisation of existing PSPs. These stakeholders highlighted the existing status of PSPs in the country and the issues and challenges, as well as made recommendations to resolve them. Reviving PSPs is complementary to the larger effort of optimising the existing 45 GW hydropower capacity in the country to provide peaking and other services to the grid. To this end, the Power System Operation Corporation of India (POSOCO)

Optimising existing hydropower capacity POSOCO’s recent study involved a plant-wise survey of the existing hydropower capacity with respect to various parameters. It has been observed that of the existing capacity of 45 GW, a maximum of only 32 GW is utilised during the monsoon season and about 25 GW during the rest of the year. The suboptimal level of hydropower utilisation calls for an operational and regulatory revisit. The report indicates scope for additional peaking support of 3,000-5,000 MW with an equivalent amount of backing down during off-peak hours from the existing hydropower stations. The gain from optimised despatch annually is estimated to be 5 paise per unit, which translates into savings of Rs 6 billion annually at the all-India level. Achieving additional peaking support would require reduction in the outage time of hydro machines, changes in tariff regulations, optimal coordination, inflow forecasting, silt forecasting, and a series of other activities that need to be undertaken to value hydro. Specifically, there is a need to switch to multi-part tariff for state hydropower projects, which is currently being followed for central generating stations. This would incentivise the state stations to also provide peaking support at the required time to be able to recover the fixed charges. Broadly, the report notes that hydropower could support grid stability by providing ancillary services, reactive power support (through synchronous condensors) and black-start service. Further, a flexibility matrix for each power station needs to be developed on various parameters including ramp-up and ramp-down time and start-up and shutdown time. “We need to start preparing ourselves for 2022 so that hydro is flexible by then. Saying that

PSPs offer the unique advantage of acting as a load in the pump mode by raising water to the upper reservoir during times of surplus power and running in generat34 ● Renewable Watch ● September 2017

hydro should become flexible is easy, but a lot of work needs to be done to achieve it, including defining the flexibility matrix, devising methods to measure it, paying for it and incentivising flexibility,” says S.K. Sonee, adviser, POSOCO.

T R E N D S & D E V E LO P M E N T S has undertaken a study on “Operational Analysis for Optimisation of Hydro Resources and Facilitating Renewable Integration in India” (see box). The country’s first PSP, Nagarjunasagar in Telangana, was commissioned during the 1980-85 period. However, it is not operating in the pumping mode as the tail pool dam is not yet operational. Same is the case with Sardar Sarovar in Gujarat and Panchet Hill in West Bengal. The fourth PSP that is not operating in the pumping mode due to vibration problems is Kadana Stages I and II in Gujarat. Bharat Heavy Electricals Limited (BHEL) has been appointed to study and rectify the issue at the Kadana PSP, while Telangana and Andhra Pradesh have to work together to make the tail pool dam operational and resolve issues related to discharge quantum and time duration. The tail pool dam at Sardar Sarovar is under construction and is likely to be completed by October 2018. In the case of Panchet Hill, it has been decided not to operate the project in pumping mode due to land acquisition issues in the lower reservoir. The CEA has identified a potential of 96,524 MW across 63 schemes for pumped storage operation across the country. This does not include PSPs on small streams/nallahs and schemes that could be taken up on the existing reservoir schemes in operation, where PSPs could be set up by constructing another reservoir upstream or downstream. Regionally, the western region (WR) has the highest PSP potential at 41 per cent or 39,684 MW due to the topographical features with steep gradients of rivers originating from the Western Ghats. The CEA has taken up a basin-wise review, which would be completed in 2019. Two PSPs are currently under construction – the 1,000 MW Tehri PSP in Uttarakhand and the 80 MW Koyna Left Bank in Maharashtra. They are expected to be commissioned in 2018-19. In addition, a dozen projects aggregating 9,430 MW are at various stages of planning, including survey

PSPs at various stages of development Project

State

Installed capacity (MW)

Agency

Present status

Tehri PSP Koyna Left Bank

Uttarakhand

1,000

THDC India

Under construction

Maharashtra

GoMWRD

Kundah (Stage 4)

Under construction

Tamil Nadu

500

TANGEDCO

DPR prepared

Turga

West Bengal

1,000

WBSEDCL

DPR concurred by CEA

Lugupahar

Jharkhand

2,800

DVC

To be taken up for S&I

Malshej Ghat

Maharashtra

700

NPCIL and THDC

DPR prepared; IA yet to be signed with state government

Humbarli

Maharashtra

400

NPCIL and THDC

Under S&I

Warasgaon

Maharashtra

1,200

GoMWRD

Under S&I

Chikhaldara

Maharashtra

400

GoMWRD

Under S&I

Sholayar I

Kerala

810

KSEB

Yet to be taken up under S&I

Sholayar II

Kerala

390

KSEB

Yet to be taken up under S&I

Poringal Kuthu

Kerala

KSEB

Yet to be taken up under S&I

Sharavathy

Karnataka

450

KPCL

Under S&I

Varahi

Karnataka

700

KPCL

S&I likely to start soon

Total

10,510

GoMWRD: Government of Maharashtra, Water Resources Department; TANGEDCO: Tamil Nadu Generation and Distribution Corporation Limited; NPCIL: Nuclear Power Corporation of India Limited; KSEB: Kerala State Electricity Board Limited; KPCL: Karnataka Power Corporation Limited Source: CEA

and investigation (S&I) and preparation of detailed project reports (DPRs) (see table). At a recent meeting, CEA representatives stated that to make PSPs commercially viable there is a need to implement differential tariff for peak hours. Further, PSPs must be considered as a grid element rather than an energy generation source. Therefore, a market-based mechanism of operation through regulatory treatment will help in improving the commercial viability of PSPs. This will also help in justifying funding support, if any, for operationalising the existing non-operating PSPs and future PSPs from the Power System Development Fund and the National Clean Energy and Environment Fund. It has also recommended that the balancing cost must be shared on a pro rata basis by all states in the region as although renewable energy resources are concentrated in certain states, all the states are required to meet their respective renewable purchase obligations. Given that hydropower is a state subject,

state governments will need to take the initiative to allocate the identified schemes to prospective developers. Further, it would be more cost-effective to locate PSPs where one of the reservoirs is already existing or under construction. Flexible scheduling for PSPs and multipurpose projects must be included in the Indian Electricity Grid Code. It was further pointed out that some of the identified schemes in the WR are located in areas declared as wildlife sanctuaries, which may require the state and central governments to denotify such areas for the development of PSPs. Going forward, hydropower, particularly PSPs, is expected to play an important role in providing power storage and maintaining grid stability. It is an appropriate time for planning and for regulatory agencies to intervene and take requisite measures to ensure that the available resources are utilitised to their maximum potential in line with the overall objective, given the funding and other constraints associated with new ventures. ■ September 2017 ● Renewable Watch ● 35

COMPANIES

Kshema Power Aims to develop 1,000 MW of projects per annum By Dolly Khattar and Ashay Abbhi

he dynamism of the Indian renewable energy sector is evident from the constantly changing regulatory, financial, competitive and business models. Wind and solar power tariffs have fallen steeply, thereby boosting investor confidence in the sector while squeezing developer margins. Such developments have compelled companies to transform their business models to cater to the growing demand for innovation in order to succeed in the evolving market. Kshema Power is one such company that has used innovative business models and succeeded in becoming a leading player in the wind power engineering, procurement and construction (EPC) space.

36 ● Renewable Watch ● September 2017

Company background Kshema Power began as a proprietorship firm with a vision to harness wind energy in Kerala. However, low wind power potential in the state and the consequent lack of commercial feasibility for capital-intensive wind projects turned the company’s attention to the wind-rich state of Tamil Nadu. Kshema Power won its first order in 2003 to procure land for a 50 MW wind farm for Denmark-based NEG Micon (later acquired by Vestas). This was followed by two more projects from the same client and led to the company’s transformation from a proprietorship to a complete EPC solution provider.

During the company’s growth phase, from 2005 to 2009, Kshema Power was involved in major wind farm development. Barring wind turbine procurement and installation, it undertook all works such as identifying and procuring land, getting the necessary approvals, studying historical wind data, erecting civil foundations, and undertaking transmission line works. In 2009, the company achieved a major milestone of developing 500 MW of wind power capacity for Vestas. In 2014, the company forayed into the solar power EPC segment with an order to develop 50 MW of capacity for SunEdison in India. In 2016, the company marked another milestone, achieving a cumulative

COMPANIES installed wind capacity of 2,500 MW.

process of expanding its client scope to include independent power producers (IPPs) as well.

Capacity profile Kshema Power has a total of 2,500 MW of wind capacity. Of this, 1,800 MW is installed in Tamil Nadu, which has been the key focus area for the company. Another 500 MW has been developed in Madhya Pradesh and the remaining is in other states. The company also has 25 MW of projects in Kerala, of which 10 MW is under construction and 15 MW is operational. The company has focused only on providing EPC services to its clients and has consciously stayed away from the operational aspect of wind farms. This is primarily because most of its clients are original equipment manufacturers (OEMs) with end-user agreements and power purchase agreements in place, which limits the scope of work for companies like Kshema. In addition to wind, Kshema Power has undertaken grid integration of about 90 MW of solar power capacity. Further, the company has set up 400 km of transmission lines and 650 MVA of substations. Going forward, the company is looking to undertake 100 MW of turnkey projects in Karnataka. According to Ramakumar P., chief marketing officer, Kshema Power, the company’s focus in solar is likely to be on the rooftop segment for commercial and industrial customers. These projects will be developed under the capex model as opposed to the emerging RESCO (renewable energy service company) model.

Business model The company believes that the shift from feed in tariffs to competitive biddingbased project allocation is a positive move for the wind power segment. Kshema Power’s business model involves building large wind farms under the capex model (the company provides upfront investment to develop the farm) and then selling it to customers or OEMs, which further sign contracts with discoms or end users for power procurement. Kshema Power is in the process of developing a 400 MW wind farm in Tamil Nadu.

It is likely to sell the farm to the winners of the wind capacity auctioned by the Solar Energy Corporation of India (SECI) in the future. The company’s model of building large wind farms helps developers procure large capacities at a single wind-rich location as opposed to developing smaller multi-location wind power projects. To this end, the company believes that competitive bidding will be the preferred route. Kshema Power does not sell its assets to companies that are looking to offset their internal power consumption as captive consumption only caters to the short-term vision and does not provide enough returns for such large wind farms. Apart from building capacity in Tamil Nadu, the company is developing projects in newer markets like Karnataka and Maharashtra. In the present wind power scenario, there are only a few companies that are capable of providing complete wind farm solutions, from land procurement to grid-level substation connections. Since the company has been operating across the entire wind power value chain, it enables efficient project execution in stipulated time. Moreover, the company does not sell wind farms that have been under development for less than 12 months. This helps create greater project credibility for customers, who can expect reasonable returns within the given duration. So far, Kshema Power has worked with only OEMs in the wind industry such as Siemens Gamesa and ReGen Powertech. The company is currently in the

Given that the wind power segment in India is dominated by IPP projects and wind turbines provided by OEMs, Kshema’s model of developing a complete wind farm and then selling the asset stands in contrast. However, Ramakumar believes that the mode of project development should be best left to the customer. Wind power IPPs today are experienced with 300-500 MW worth of assets, and are aware of the relevant business models and their comfort zones. Kshema Power believes in providing an alternative to IPPs for project development and then working in their comfort zone. The company uses a model of continuous investment. Given its scope of work, identifying the right wind regime becomes the most important part of the project development process. To this end, Kshema Power has 30-35 wind masts at any given time at various locations to determine the feasibility of projects. The collection of such vast data over a long period across different locations enables it to give an accurate estimate to the client. While this helps the company meet customer expectations, it also helps keep a realistic check on the company’s performancelevel commitments.

Outlook Kshema Power is one of the few companies that have aligned themselves with the transformation taking place in the country’s wind power segment. The company is expected to benefit from the move towards competitive bidding as it sells its underconstruction projects to the winners of SECI’s wind power tenders. Meanwhile, the segment stands to benefit from players such as Kshema Power that takes the complete onus of project development, thereby increasing the country’s installed capacity. With over 400 MW of capacity under development, the company is working towards developing at least 1,000 MW of projects every year until 2020. ■ September 2017 ● Renewable Watch ● 37

COMPANIES

EESL Diversifies its portfolio to drive future growth By Puneet Kumar Arora

nergy Efficiency Services Limited (EESL) was established in 2009 as a joint venture of four central power sector undertakings – NTPC, the Power Finance Corporation, the Rural Electrification Corporation and Power Grid Corporation of India Limited (Powergrid) – to facilitate the implementation of energy efficiency-related projects in the country. EESL works closely with the Bureau of Energy Efficiency and is leading the market-related activities of the National Mission for Enhanced Energy Efficiency. One of the youngest corporate entities under the Ministry of Power, EESL, which was till now best known for successfully implementing flagship government schemes such as Unnat Jyoti by Affordable LEDs for All (UJALA) and the Street Light National Programme, is now entering a new phase of growth through the diversification of its activities. The company has forayed into the solar space with the launch of multiple projects and is also spearheading the government’s National Electric Mobility Mission that seeks to have 400,000 electric vehicles (EVs) across the country by 2020.

Solar programmes EESL is the implementing agency for the Atal Jyoti Yojana (AJAY), a sub-scheme under the off-grid and decentralised solar application programme of the Ministry of New and Renewable Energy (MNRE). AJAY seeks to install solar street lights in Assam, Bihar, Jharkhand, Odisha and Uttar Pradesh where household grid connectivity is less than 50 per cent as per the 2011 census. The total cost of the scheme is Rs 4.99 billion and it is expected to be 38 ● Renewable Watch ● September 2017

will be used exclusively by government departments in Delhi and the National Capital Region (NCR). EESL has also floated tenders for 3,000 AC charging points and 1,000 DC ones. Around 400 chargers will be provided in the first phase at different locations in Delhi and NCR.

Smart meters completed by end-March 2018. Besides AJAY, EESL is also implementing the MNRE’s Solar Study Lamp Scheme for School Going Child scheme in these five states in partnership with the Indian Institute of Technology (IIT) Bombay. The scheme entails distribution of 7 million solar study lamps to schoolgoing children by December 2018. While EESL is responsible for tendering and procurement of the material, IIT Bombay is the overall executing body for the programme. According to S.P. Garnaik, chief general manager (technical), EESL, the scheme works on a co-financing model, where out of the total cost of a solar lamp of around Rs 600, Rs 500 is paid by the government while Rs 100 is paid by the beneficiary. Further, under the solar agricultural demand-side management programme, EESL is providing solar energy-based minigrid solutions to farmers to power their agricultural pump sets, which otherwise draw power through the main electricity grid or diesel generators. The programme is expected to help farmers receive considerable revenue on a monthly basis by selling the excess power to the grid for a period of 25 years. Meanwhile, the company has also received requests for installing solar rooftop systems on buildings and is right now analysing the feasibility of the same.

Electric mobility EESL has recently invited global bids for 10,000 EVs, running up to 150 km on single charge, for use by government departments. The company plans to buy these vehicles in two phases. In the first phase, it plans to acquire 1,000 vehicles, which

In July 2017, EESL issued a tender for the procurement of 5 million smart meters for the implementation of smart grid projects in Haryana and Uttar Pradesh. Installation of these smart meters along with their associated communication and IT infrastructure will enable discoms in these states to obtain real-time energy consumption data of each consumer for subsequent analysis and undertake various other initiatives such as time-of-day/timeof-use billing, prediction and management of peak demand, providing real-time energy consumption data to consumers, prepaid billing facility, and remote connection and disconnection of load. EESL will make the entire upfront investment towards the installation of these smart meters as well as maintain the whole infrastructure for the next 10 years. It expects to recover its investment from the savings accruing to discoms in subsequent years.

Key challenges and future plans According to Garnaik, the major challenge that the company faces in most of its programmes is the supply-demand mismatch. At some places, while manufacturers are ready to supply the product, there is a lack of demand from consumers. Another challenge is the lack of a pan-Indian implementation chain, which is necessary given the scale of EESL’s schemes. The company also needs to put in place mechanisms to address quality-related complaints likely to arise as the programmes mature. Despite these challenges, EESL has set a target of doubling its turnover every year for the next five years. Going forward, it is looking to move away from launching schemes targeted only at the consumer and government sectors to expanding its offerings for commercial entities as well. ■

COMPANIES

Micromax Energy Limited Forays into the solar segment backed by an innovative portfolio

he country’s ambitious renewable energy targets have opened up new avenues, driving many companies to foray into the sector. A case in point is Indian consumer electronics major Micromax Energy Limited, which has entered the country’s solar energy space under the brand name Microlyte. The company provides solutions for energy generation, savings and storage.

Capacity portfolio Micromax Energy Limited produces multi-crystalline solar modules ranging from 3 W to 315 W. These modules adhere to global specifications and can be used in a wide range of residential, commercial and industrial solar power plants. In addition, the company provides energy storage solutions such as solar home uninterrupted power supply systems and inverter batteries. It also manufactures lithium-ion batteries. The recently launched Hybrid Plus solar energy solution is suited to Indian conditions and works both in the presence and absence of a grid connection. It is a completely grid-independent solar energy solution that provides free power backup. It is designed for homes, offices and commercial set-ups, giving a power output of 5-250 kW. The solar energy solution is aimed at addressing the issues of poor power quality and frequent outages. The company has launched another product called “Smart ESS”, which aims to leverage the cheaper energy supplied at night (typically from 10 pm to 5 am) to reduce the total cost of energy to the consumer. The Smart ESS solution also removes the need for provisions for peakload demand conditions as the peak surges can be supplied internally leading 40 ● Renewable Watch ● September 2017

restricted due to a price ratio of 4:1, when compared to lead-acid batteries. The company remains optimistic on improving this ratio and is positive that it can deliver lithium-ion batteries at 2.5 times the cost of its lead-acid counterparts, which can be further reduced to 1.5 times within a year of launch.

to reduced cost for the consumer. The energy storage solution can be connected to solar-based power generation as well. The solution is primarily targeted at small commercial establishments, banks, cold storages and small industries with energy billings of Rs 0.2 million-Rs 0.3 million per month. Mukesh Gupta, cofounder and managing director, Micromax Energy Limited, believes that cost savings will be around 32-33 per cent of the total amount spent on conventional energy without the provision of solar panels, and even more with the inclusion of solar panels in the set-up.

Manufacturing Currently, Micromax Energy Limited has three factories, located in Rudrapur, Hyderabad and Bhiwadi. At its Rudrapur facility, the company undertakes the production of inverters at a capacity of 10,000 units per month. The lead acid batteries for its older products are also indigenously produced. However, the company outsources the production of solar panels for its energy solutions, and has no plans of manufacturing these in the near term. Micromax is also the first Indian company that produces lithium-ion batteries. This has put Micromax in a unique position to lead and drive the uptake of the technology in India, which has hitherto been

While the company does not have a dedicated operations and maintenance team, it intends to use its existing nationwide network of distributors and dealers. To this end, its personnel are being trained to provide maintenance as and when required and become competent to install smallscale solutions. While Gupta is positive about the sector, he is also slightly cautious and believes that the government should contribute a lot more. He says, “The government is not developing backward integration systems and is not promoting industries that can contribute to the advancement of the sector. It should establish communication with companies to facilitate the same rather than talking on the surface without palpable development plans to back it up.”

The way forward Going forward, Micromax will be head-tohead with both the incumbents as well as newer players, given the low entry barriers in the segment. While the company has struck the right chord by providing a onestop energy solution, the lack of a dedicated in-house maintenance team weakens the proposition to some extent. This may not be a deal-breaker if the company can assure and demonstrate quality and speedy maintenance in its early projects. Micromax is currently well positioned to fill the technology gaps in the market and find a niche for itself. ■

PERSPECTIVE

Interview with Amitabh Kant “The future lies only in renewable energy” Think tank NITI Aayog has set an ambitious target of 100 GW of clean energy by 2019-20 and wants financial provision for generation and infrastructure rather than for capacity creation only. It has unveiled a three-year action agenda emphasising the need for strengthening the renewable purchase obligation (RPO) system, encouraging renewable-rich states to sell power to those with a deficit and developing storage solutions to boost clean energy adoption in the country. In an interview with Renewable Watch, Amitabh Kant, chief executive officer (CEO), NITI Aayog, talked at length about the current state of the sector, the prevailing issues and possible solutions. Excerpts... What progress has been made by the renewable energy sector over the past one year? Amitabh Kant Chief Executive Officer, NITI Aayog

“A trading platform needs to be created for power surplus and deficit states so that renewable energy deficit states can easily meet the RPO target.”

There has been exponential growth in the renewable energy sector. It witnessed its highest ever capacity addition of 11.3 GW during 201617 (a 62 per cent increase over 2015-16). Of this, solar power capacity addition was 5.5 GW (83 per cent increase over 2015-16) and wind power capacity addition was 5.5 GW (60 per cent increase over 2015-16). The sector is witnessing lower solar bidding tariffs. In 2015-16, the bidding tariff was Rs 4.34 per kWh, which reduced to Rs 3 per kWh in 2016-17. In a recent bidding, the tariff further came down to Rs 2.44 per kWh. Similarly, tariff bidding for wind has come down to Rs 3.46 per kWh. What are the key unresolved challenges in this space? Is the sector headed in the right direction to achieve the 175 GW target by 2022? Currently, the sector is facing problems such as non-honouring of old power purchase agreements (PPAs), signed at a higher rate by the discoms. This has led to a slowdown in the solar tendering process by the states as well as delays in signing PPAs following the finalisation of bids. However, PPAs are contractual obligations and have to be honoured by the discoms. As of June 30, 2017, the total installed renewable capacity was about 60 GW, which is 34 per cent of the 175 GW target to be achieved by 2022. To this end, the Ministry of New and Renewable

42 ● Renewable Watch ● September 2017

Energy has prepared a year-wise roadmap. The Ministry of Power has also notified a trajectory to attain 17 per cent RPO by 2018-19, of which 10.25 per has to be solar and the remaining nonsolar. In order to achieve the target, RPO compliance is a must. The states need to purchase renewable energy certificates if the RPO targets are not being met. The Green Energy Corridors project, which is currently under implementation, is likely to remove transmission bottlenecks, which will allow easy evacuation and transmission of renewable energy. Discoms should be encouraged to set up solar plants in renewablerich states to fulfil the RPO targets. A trading platform needs to be created for surplus and deficit states so that renewable energy-deficit states can easily meet the RPO target. Apart from this, the grid has to be managed smoothly. For a sustainable grid, we also need balancing power for renewables because of their intermittency. Hydropower, gas-based power, battery storage and flexible power from coal may be considered for balancing renewable energy. In addition, accurate forecasting and scheduling is necessary. What initiatives are being taken to channelise investments in the renewable energy sector? The government has come up with different schemes for channelising investments in the renewable energy sector. The 100 GW solar target has been bifurcated into 60 GW of groundmounted grid-connected and 40 GW of gridconnected rooftop solar power. Both modes have different routes of investment.

PERSPECTIVE The government has come out with the concept of large solar parks, which would cater to about 70 per cent of the 60 GW ground-mounted grid-connected solar power target. The government was providing 30-40 per cent viability gap funding (VGF) from the National Clean Energy Fund. However, there is no demand for VGF given that the solar tariff has been reduced to less than the coal-based power tariff. Under the solar park scheme, the government is providing funds to develop basic infrastructure. In the rooftop solar segment, the government is providing support to the states for the implementation of grid-connected rooftop installations. This scheme has provision to offer incentives ranging from 25 per cent to 60 per cent of the benchmark cost, depending on the category of the state. Besides, the sector is getting funds from international financial institutions. What is the motivation behind the government’s plan to reclassify large hydro as renewable energy? According to the International Renewable Energy Agency, renewable energy is defined as the energy derived from natural sources, which are replenished at a faster rate than they are consumed. Solar, wind, geothermal, hydro and some forms of biomass are common sources of renewable energy. However, wind, solar, wave and tidal energy are considered as variable renewable energy sources. So far, hydropower has not grown expeditiously in our country. India has a hydro potential of about 148 GW. Of this, 44 GW (29 per cent) has been harnessed. The overall share of hydro in terms of installed capacity has declined from 50 per cent in

“Non-honouring of old PPAs, signed at a higher rate by the discoms, is a key issue and has led to a slowdown in the solar tendering process. However, PPAs are contractual obligations and have to be honoured by the discoms.” 1962-63 to 14 per cent as of June 2017. However, generation from hydro stations during 2016-17 accounts for 10 per cent of the total energy generation. The government has an agenda to ensure universal access to electricity, meet the nationally determined contribution commitment of non-fossil-based capacity of 40 per cent and achieve 175 GW of renewable capacity by 2022. Renewables need a balancing capacity and hydro will play a major role in this. Declaring hydro as renewable energy will make it eligible for all the benefits associated with renewables, which will, in turn, encourage developers to take up stalled hydro projects and realise the country’s hydro potential. What are the key initiatives being taken by the government to promote manufacturing? The annual cell manufacturing capacity in the country is about 3 GW and the module manufacturing capacity is about 8 GW. We are aiming to increase the manufacturing capacity significantly to meet the demand requirement through domestic production. This sector has to be supported through the Modified Special Incentive Package Scheme of the Ministry of Electronics and Information Technology. The scheme is available for both new projects and expansion projects. The scheme provides a capital subsidy of 20 per cent in special economic zones (SEZs) and 25 per cent in

“Renewables need a balancing capacity and hydro will play a major role in this. Declaring hydro as a renewable energy source will make it eligible for the benefits associated with renewables, which will encourage developers to take up stalled hydro projects.”

non-SEZs for units engaged in electronics manufacturing. Do you think the Ujwal Discom Assurance Yojana (UDAY) will be a long-lasting solution for the state discoms to overcome their financial stress? Since its inception, 26 states and one union territory (Puducherry) have joined UDAY. However, Tamil Nadu and West Bengal have not joined it. Under UDAY, 75 per cent of discom debt taken over by the states and 60 per cent of capital expenditure by the centre (for improving infrastructure and reducing aggregate technical and commercial [AT&C] losses) are covered. The remaining debt and capital expenditure are being serviced by the discoms. UDAY will reduce the loan burden on discoms. It has helped in reducing AT&C losses, which have come down to 20.2 per cent in 2016-17 from 21.1 per cent in 2015-16. In fact, Himachal Pradesh, Haryana, Goa, Rajasthan, Uttarakhand, Gujarat and Puducherry have shown a significant improvement in AT&C loss reduction. The power purchase cost has reduced in seven states – Goa, Jammu & Kashmir, Gujarat, Bihar, Andhra Pradesh, Telangana and Haryana. However, billing and collection efficiency needs to be improved. UDAY may provide a sustainable path for discoms to overcome their financial stress. However, for long-term financial sustainability, they have to undertake structural reforms in terms of operational parameters. What is the role of energy storage in resolving the intermittency problem of renewables? September 2017 ● Renewable Watch ● 43

PERSPECTIVE complement this move. The government also notified UDAY in 2015 for the operational and financial turnaround of discoms. The efforts under UDAY will help reduce AT&C losses to 15 per cent and eliminate the gap between the cost of supply and the average tariff by 2018-19.

The role of energy storage is critical in resolving the intermittency problem of renewable energy. There are various types of storage options available: hydro, battery energy storage systems (BESS), pumped hydro storage, gas-based power plants and thermal power plants. However, the main issue is the optimal use/location of various types of balancing energy sources/ energy storage devices so that the variability of renewable energy generation can be tackled in a smooth manner. Pumped storage power plants offer the unique advantage of acting as baseload in pump mode by raising the water to the upper reservoir in times of surplus power and operating in generating mode during deficit power situations. Further, large-sized batteries can be charged during off-peak hours and discharged at a faster rate or at a controlled rate when required. These batteries can also be used for balancing the variability of renewable generation, which further helps meet the balancing needs of the grid. Given that the RPO targets are not being met, what is your view on the introduction of a renewable generation obligation (RGO) for thermal power producers? The RGO will not be incremental to the RPO. The renewable energy produced by each coal/lignite-based thermal generator will be sold under the bundling scheme. In case an obligated entity procures renewable power, the state electricity regulatory commission will consider the entity to have met the RPO target to the extent of power bought from renewable energy generating units. Thus, RGO merely ap44 ● Renewable Watch ● September 2017

pears to bring thermal generators into the mix and make it convenient to meet the RPO. It will not result in expanding the requirement for renewable energy overall. How can the country’s overall power situation be improved on the transmission, distribution and generation fronts? Transmission Developments in the power sector emphasise the need for accelerated implementation of a national power grid to enable the scheduled/unscheduled exchange of power as well as provide open access to encourage competition in the power market. In view of this, a nationwide synchronous power grid, interconnecting all the five regional grids, was established with the commissioning of the 765 kV single circuit Raichur-Sholapur line on December 31, 2013. Further, the interregional transmission capacity has been increased from 27,750 MW as of March 2012 to 76,550 MW as of June 2017 and the inter-regional transfer capacity requirement would be 118,050 MW by 2021-22 to meet the increasing load requirement. Power Grid Corporation of India Limited is working to augment the transmission capacity as per the load requirement. Distribution In order to enable continuous supply, the government has taken up a joint initiative with all the states to provide 24x7 power to all. In fact, schemes such as the Deendayal Upadhyaya Gram Jyoti Yojana for rural areas and the Integrated Power Development Scheme for urban areas

Further, distribution is largely state government owned and there is a need to push a market-oriented financial model to usher in competition and create an electricity market. The distribution segment may improve if focus is laid on providing open access to all categories of consumers irrespective of load, expansion of the electricity market through power exchanges and active participation of central/state power sector undertakings in short-term sale or purchase of electricity. There is also a strong need to separate “content” from “carriage” to usher in competition and provide more choices to consumers. Generation At present, the country is in a comfortable position on the power supply and generation fronts. In 2016-17, peak and energy deficits were only 1.6 per cent and 0.7 per cent respectively. The country’s total installed capacity is 329 GW and 50 GW is under construction. Over and above, we have a target of 175 GW of renewable capacity addition by 2022. Therefore, as far as supply is concerned, generation capacity is in a comfortable position. What is your outlook for the power sector in general and renewable energy in particular? Overall, power sector growth has been encouraging at about 4 per cent. As of July 2017, the overall installed capacity was about 329,000 MW, of which, 60,000 MW is renewable power (wind and solar), 44,600 MW is hydro and 6,780 MW is nuclear. The share of renewable capacity in the overall installed power capacity is likely to increase. According to the Central Electricity Authority, no coalbased power is expected to be added beyond 2022; hence, the future lies only in renewable energy. ■

2 Annual nd

POWER LINE SUMMIT 2017 October 10, The Imperial, New Delhi  Agenda:

October 10,Plants 2017, The Imperial, New Delhi Future of Coal-fired Demand Outlook Oil to Electricity: E-mobility Hype and Reality Real Cost of Renewable Power Tomorrow's Grid Impact of Uday and The Way Forward for Discoms Next Steps in Market Evolution Stressed Assets Changing the Planning Paradigm

Organiser:

Partner Exchange:

For registration opportunities, please contact: Naorem Yaiphaba | Conference Cell Email: conferencecell@indiainfrastructure.com | Tel: +91-111-441034610 (D), 41034615, 41034600 (B) | Mobile: +91-99971722464 Conference Cell, India Infrastructure Publishing Pvt. Ltd., B-117, Qutab Institutional Area, New Delhi 110016. Fax: +91-111-226531196, 46038149

PERSPECTIVE

“Make India a model country for wind power” Views of MNRE’s Anand Kumar At a recent conference, “Wind Power in India”, organised by Renewable Watch, Anand Kumar, secretary, Ministry of New and Renewable Energy (MNRE), discussed the issues and challenges facing the wind power sector and the way forward...

ndia has a wind power potential of 300 GW, of which only 32 GW has been harnessed so far. The government has set a target to reach 60 GW of wind capacity by 2022. Although the sector surpassed its annual target in 2016-17, there is concern regarding capacity addition this year. We do not know where we are heading and how much capacity will be added this year and the next year. We have taken stock of the situation and although things are not looking very promising, we are trying to do our best. The sector is in a leading position as far as manufacturing is concerned with a capacity of about 10 GW. The industry supplies equipment to not only local developers but also to foreign ones. Given this position of strength, the manufacturing industry should attempt to sustain this advantage. It must try to exploit the economies of scale and reduce the cost of wind power. On comparing the wind and solar segments, it is evident that we do not have as strong a solar manufacturing base as we do for wind. However, the problem with the wind segment is intermittency in supply. We need to take various scheduling and forecasting measures to make this power consistent. Also, we need to look at hybrid set-ups between solar and wind to increase the consistency of power and ensure grid stability. With a not-so-promising scenario, we need to bring all our stakeholders on board, analyse where we are going wrong, where new strategies are needed, and how can we reinstate stakeholders’ faith in government policies.

46 ● Renewable Watch ● September 2017

way and we have encouraged the state governments to conduct bidding. In order to bring uniformity in bidding, we are in the process of releasing wind bidding guidelines, similar to what has been done in the solar segment. The draft has been finalised and these guidelines will be issued soon. We are also working on the guidelines for hybrid set-ups, which should be released in the next few weeks.

PPA renegotiation

Curtailment of wind power The central government has advised the state governments to give must-run status to all forms of renewable energy. In a recent debate in Madhya Pradesh on the must-run status, the government took cognisance of the matter and issued an advisory to the state governments that must-run status has to be honoured. Whenever there is an issue of curtailment, all developers have the right to protest because curtailment without due reason cannot be done.

Competitive bidding The paradigm shift from feed-in tariffs to the competitive bidding regime has led to a price of Rs 3.46 per unit. For the second round of bidding, we are waiting for the squatting issue to be settled, which is pending with the Central Electricity Regulatory Commission. We hope that it gets sorted soon. We have proposed to float 1,000 MW of contracts every month till March 2018. State-wise bidding is a good

Concerns regarding the dishonouring of power purchase agreements (PPAs) have created a sense of uncertainty in the sector. In Karnataka, the tariff was finalised but the state government refused to honour the PPAs. We have advised the state government to take up the issue with the state regulatory commission and honour the agreements. If needed, instructions under Section 218 of the Electricity Act can be issued to the state regulatory commissions to comply with the PPAs. The entire issue of dishonouring of PPAs and revisiting PPAs affects the confidence of investors. Actions like what happened in Karnataka have shaken the confidence of investors, which is not good for the industry. Keeping the well-being of the industry in mind, we have to formulate firm policies and ensure that all contractual agreements are honoured. The ministry is very clear that all contracts must be honoured.

Termination penalty Whenever a developer and any authority enter into a contractual agreement, it is based on the request for proposal. All clauses of a contract must be negotiated before signing the contractual agreement.

PERSPECTIVE This is one issue that has been plaguing the delivery of projects across various infrastructure sectors. The details of the contractual agreements are not considered before bids are put in. Any confusion regarding the contractual clauses should be put forward before the contract is signed. To illustrate, when I was in the road sector, I had set up a company called National Highways and Infrastructure Development Corporation Limited (NHIDCL). The contracts required that the developer complete 10 per cent of the physical work within six months of the date of commissioning. Initially, nobody raised any question against that. The contracts were signed and the mobilisation advance was drawn. Four months into the project, the developers began asking for extensions. If, as an authority, I had granted them an extension, my credibility as an authority would have been at stake. The issue was that we were not being honest to the situation. Difficulty in the mobilisation of equipment during the rainy season along with diverse and difficult geological conditions makes it logistically impossible to complete 10 per cent of the project within six months. We were not taking the bull by the horns and acknowledging that an amendment was needed. No wonder all contracts were running into problems within six months. Taking cognisance of the problem, the time frame for the completion of 10 per cent of the project was revised to a year. We changed our bidding document and our draft contractual agreement accordingly. We also changed the milestones so that nobody could find fault with us. Changing the milestones, penalties and benchmarks beforehand can result in a smooth process. The problem arises when changes are sought subsequent to the signing of agreements. So my request to all developers is to come forward with any discrepancy in the contractual agreement before it is signed.

RPO Only 10 states have fulfilled their renew-

“Concerns regarding the dishonouring of PPAs have created a sense of uncertainty in the sector. Keeping the well-being of the industry in mind, we have to formulate firm policies and ensure that all contractual agreements are honoured.” able purchase obligations (RPOs). Ten more states are in the process of doing so, and have 60-90 per cent RPO fulfilment, whereas the rest are far behind. We have held a meeting with the state regulatory commissions and made it clear that the states and union territories that do not fulfil their RPOs will face penalties. We are positive on the wind programme and plan to bring out six new tenders of 1,000 MW this year. We also plan to publish a schedule in advance for the bidding due next year. However, all of this is subject to the condition that developers do not form cartels and demand unreasonable rates. The moment we find rates are becoming unreasonable, we will not go ahead with any further bidding. We should all play a fair game.

Robust payment mechanism I am all for a robust payment mechanism. The ministry will introduce some stringent clauses regarding payment in the contractual agreement. We must standardise the definition that payment should be made within a certain period; failure to do so would result in a penalty at a certain rate, as is the case in other infrastructure

sectors. In the road sector, non-payment within 20 days leads to a penalty for the authority. To ensure that the authority did not have to pay any such penalty, I made it mandatory that in case the file gets delayed on any desk, the person concerned would be liable to pay the penalty personally. All the files moved on time and all payments were made on time.

Offshore wind Along with taking steps to harness onshore wind power, we must look at offshore wind. We have windy states that are now supplying power to the non-windy states through RPOs. We have asked for estimates from non-windy states on how much power will be required so that they can plan their bids. We should not stop at 300 GW because to meet the power demand of 1.3 billion people at the growing future rate of power consumption, we have to start looking at other means right away. The MNRE is committed to harnessing offshore wind. There is, no doubt, the argument that harnessing offshore wind energy is very expensive as of now, but a foray into this space is required nonetheless. Various countries are harnessing offshore wind power at reasonable rates, and so can we. We must address the problems that we face and not sweep them under the carpet. Developers also should play a fair and equitable game. I believe that to succeed in the wind segment we need to work out a framework with a win-win situation for all stakeholders. Let us have long-term strategies and make India a model country for wind power. I am positive that if we do so, we will not only achieve the 60 GW by 2022 target but also exceed it. ■ September 2017 ● Renewable Watch ● 47

PERSPECTIVE

“Challenges in providing grid connectivity” Views of SECI’s Jatindra Nath Swain In 2016, the Solar Energy Corporation of India (SECI) issued a 1 GW tender under the competitive bidding mechanism. This brought a transformation in the wind segment, pushing tariffs to as low as Rs 3.46 per kWh from the prevailing Rs 5 per kWh. After the successful allocation of projects under the first tender, a second tender for 1 GW of capacity has been launched. At the “Wind Power in India” conference organised by Renewable Watch, Jatindra Nath Swain, managing director, SECI, highlighted the key features of the wind tenders, the challenges faced by SECI, and the way forward. Excerpts...

s the nodal agency, SECI carried out the first transparent bidding in the wind energy segment initiated by the Ministry of New and Renewable Energy (MNRE) in collaboration with the Ministry of Power. The 1 GW tender was announced on June 14, 2016. The guidelines for the same were issued in October 2016 and the final capacity was allocated in February 2017. As per the guidelines, SECI had to complete the process of selecting the trading company before inviting bids for wind projects so that the bidders could have clarity on the counterparty before signing the power purchase agreement. The selected trading company was entitled to charge a trading margin as agreed mutually between the parties or as decided by the Central Electricity Regulatory Commission for long-term power purchases. The main objectives of the tender were to facilitate the supply of wind power from high-wind potential states to those with relatively low potential, encourage competitiveness by scaling up project sizes and introduce competitive bidding. The MNRE met the objectives by offtaking the power to discoms of non-windy states like Uttar Pradesh (499.9 MW), Bihar (200 MW), Jharkhand (200 MW), Assam (50 MW) and Odisha (50 MW). On successful allocation of the first 1,000 MW capacity to Mytrah Energy (250 MW), Green Infra (250 MW), Inox Wind (250 MW) Ostro Energy (250 MW) and an additional 50 MW to Adani Green Energy, SECI decided to issue another tender for 1,000 MW on May 4, 2017. The guidelines for the new

48 ● Renewable Watch ● September 2017

tender remained the same, except that an additional 100 MW can now be allocated to central public sector enterprises willing to undertake the development of interstate transmission systemconnected projects on a build-own-operate basis. There was active participation in these two wind tenders, owing largely to SECI’s established reputation in the solar industry, project visibility, and the assurance of timely payments for fixed terms as per the MNRE guidelines. However, SECI faced certain challenges in terms of providing grid connectivity for the projects and substations, evacuation of power and grant of long-term open access. The developers that were granted capacity are still seeking connectivity approvals. The successful bidders of the first tender cannot execute projects owing to the lack of grid connectivity. With regard to interstate connectivity, those who own the grid want to set up a plant in regions with higher wind speeds such as Tamil Nadu. This would allow them to generate electricity at competitive rates. The transmission network in these states has repeatedly come under scrutiny for failing to accommodate renewable power, thereby adding to SECI’s challenges. The limited enforcement of renewable purchase obligations (RPOs) by the government and lack of a comprehensive renewable energy law that can provide long-term certainty to investors about the policy and

regulatory framework are other hindrances. The profitability of utilities continues to be under pressure. The delay in receiving payments from the financially burdened state discoms affects not only wind developers but also investor confidence in the segment. Despite these challenges, the future of wind power seems promising. The bids in the second tender were oversubscribed three times as compared to 2.5 times in the first tender, which is a positive sign for the segment. Interstate transmission and evacuation problems are also being addressed through Green Energy Corridor projects across India. There has been considerable improvement in RPO compliance by noncomplying states such as Bihar. The Ujwal Discom Assurance Yojana has helped improve the financial health of discoms. States like Gujarat and Tamil Nadu have come out with independent wind tenders at the state level and other states like Rajasthan are expected to follow. Given that the segment is expected to witness additions of 5 GW annually, with SECI implementing 40-50 per cent of the overall targeted capacity, the outlook for the segment is optimistic. In addition, SECI has proposed to incentivise states that meet their RPO targets. In sum, a visible project pipeline and greater authority with independent project developers, along with government initiatives will go a long way in achieving the set targets. ■

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PERSPECTIVE

Auction Impact Uncertainty and upheaval in the wind segment The results of the first tranche of 1,000 MW capacity tendered in February this year have had a mixed response. With drastically low prices being discovered in the tender, the industry is concerned about the competitive pressures and the renegotiation of old power purchase agreements (PPAs). Meanwhile, the wind power manufacturing segment is distressed due to the low capacity additions expected over the next two years as the market struggles with challenges as it transitions to a competitive bidding regime. At Renewable Watch’s recent “Wind Power in India” conference, industry stakeholders discussed the current scenario and future prospects of the segment, the reasons for the falling tariffs and their recommendations to the Ministry of New and Renewable Energy (MNRE). Excerpts... Sanjay Nagrare Sembcorp Green Infra Limited currently has an operational capacity of 1,000 MW and 250 MW capacity is in the construction phase. The wind energy segment is in the midst of change, moving from the feed-intariff (FiT) regime to a competitive biddingbased mechanism. There are multiple teething problems regarding the upcoming wind power capacity, supporting infrastructure and domestic manufacturing. We expect the government to help provide the right environment where everyone makes reasonable returns and the industry eventually grows. Grid integration and integrating renewable energy with conventional sources in a manner that there is a set-up akin to the “energy-on-demand” mechanism are the goals that the industry must strive to achieve. To this end, renewable energy storage solutions and renewablethermal hybrids are some options that the government needs to promote. Once the initial hiccups are addressed, project allocation through auctions will prove to be a favourable policy change for the industry. We are quite optimistic about the Indian

wind power market. Increasingly, the market is becoming more transparent, creating a comfortable environment. One of the problems emerging now is the refusal to sign PPAs of the previously allocated power plants by discoms. We feel that all PPAs that were signed should be honoured to create a stable regime. Moreover, steps have been taken to integrate renewable energy with the grid. There has to be an enabling framework to bring down the levellised cost of electricity for Indian consumers. We feel that bids are at a realistic level, bringing value to the whole process. For instance, earlier project sizes varied in the range of 25-50 MW, with a few of them going up to 150 MW and suddenly it has gone up to 250 MW due to auctions. This increases the value of the project’s finances by providing scale. Moreover, there are emerging means of financing that provide capital at a lower cost. In addition, newer technologies and innovative wind turbine generators have increased the plant load factors, all of which translate into a lower levellised cost of electricity.

Regarding the issue of payments, we feel that some states have improved, but there are no systemic reasons for that improvement. For curtailment-related challenges, we see an encouraging trend of increased emphasis on scheduling and forecasting. This would certainly improve the issue of curtailment. What we are looking for from the MNRE is certainty, in terms of the opportunities that are going to be available in the market. To this end, the bidding pipeline should be made more transparent so that companies could plan accordingly. Also, there should be guidelines for states to help them conduct the bidding with clear dos and don’ts. Similar to the central bids, PPA risks need to be addressed for state bids as well through robust payment security mechanisms. Sudhir Nunes Orange Renewable is an independent power producer (IPP) in the renewable space. Our wind power vertical has an operating capacity of 567 MW, while that of solar stands at 190 MW. At Orange, we

Sanjay Nagrare

Sudhir Nunes

Head, Business

Chief Executive

Mahesh Palashikar

Development and

Officer, Wind

Chief Executive

Commercial,

Business, Orange

Officer, GE

Sembcorp Green

Renewable

Renewable Energy

Infra Limited

50 ● Renewable Watch ● September 2017

PERSPECTIVE

“The wind energy segment is in the midst of change, moving from an FiT regime to a competitive bidding-based mechanism.”

move quickly with the bidding mechanism so that we can add significant capacity in 2019. Over the past year, we have become more optimistic regarding the sector because of the introduction of competitive bidding. There are only a few countries that have the overall visibility of a target of anywhere from 3-5 GW per annum.

“The key message is that the industry needs to move quickly with the bidding mechanism so that we can add significant capacity in 2019.”

Sanjay Nagrare

Since we are participating in the bidding process, I would not want to comment on tariffs. However, it must be noted that in the first bid, there was a drop of about 30 paise purely because of a technicality in the way the bid was structured. This has, however, been modified in the current bid. Also, with the increase in competitive pressure, companies are looking closely into various factors of financing, design, life and any other factor that will allow them to lower their costs. Given the current circumstances we expect that tariffs are probably going to be low for the upcoming tranche as well.

Sudhir Nunes

have been preparing for a competitive bidding environment in the wind power space, to which end we changed our strategy and entered the arena of self-developed projects, marking a deviation from the strategy of our peers. As a result, we did a few projects including 100 MW and 50 MW in Madhya Pradesh and another one in Maharashtra. We have also focused on building a pipeline of greenfield projects of approximately 2 GW that are currently at various stages of development. Our experience as a developer has been varied. On the one hand, we have benefited greatly from the understanding of the true economics and risks of projects, which has helped us not only in looking at the upcoming turnkey projects opportunistically, but also in being able to negotiate the contracts more effectively. On the other hand, given the obstacles we have faced for project execution as well as getting the PPAs, we have developed a healthy respect for the original equipment manufacturers and project developers. There have been some serious troubles, particularly in the recent projects that have come online at a time when there has been a fair amount of pushback from the discoms as they are not interested in offtaking FiTbased wind power due to high tariffs. The key message is that the industry needs to Ramkumar P.

In terms of the issue related to late payments by discoms and curtailment, there is one state where the curtailment has not improved and a legal battle continues between developers and discoms about its reasons. A similar situation prevails in some other states, such as Andhra Pradesh but those are due to delays in providing transmission access. On the flipside, even as the issue of payments continues to be severe, some states like Rajasthan have improved in this respect. One of the suggestions to MNRE would be to strictly enforce the must-run rights of renewable power plants. Further, lifting the restrictions and allowing full tariff availability on early commissioning would help the segment grow. Also, the strength of the termination penalty must be increased, similar to what Gujarat offers in its PPAs.

Chief Marketing Officer, Kshema Power

Mahesh Palashikar Renewable energy is one of the biggest businesses at GE, and includes onshore and offshore wind power, hydropower and the blade manufacturing business through its recently acquired LM Wind

Power. The fundamental philosophy of the company is to be continuously aggressive in the pursuit of a lower levellised cost of electricity through technological innovations. Therefore, irrespective of the policy regime the technology barriers need to be pushed to bring down the costs of power. Moreover, GE has an industrial internet operating system called Predix, which is an open source platform where the company develops applications for improving the asset performance. India continues to be one of the largest electricity consumers and given the economic trends and expected industrial growth, the demand for power will continue to increase. Therefore, there are opportunities not only in terms of total energy consumption but also renewable energy production. One reality that the country needs to accept is that about 70-80 per cent of the wind markets in the world today are auction based. This is a reality that we better accept and adapt to. As we wake up to this fact, we need to identify ways to perfect the process for which we may need to learn from other countries that have already done it. The trends we see globally are not new to the domestic market either. These are bigger MW ratings, larger rotors and taller hub-heights. However, the Indian setting has much lower wind speeds as compared to China. So, through the available technology mentioned above, the levellised cost of electricity must be brought down through additional technological breakthroughs in India. This could be done through the use of different material in the wind turbine or the design of the towers or September 2017 ● Renewable Watch ● 51

PERSPECTIVE

“Our philosophy is to be continuously aggressive in the pursuit of a lower levellised cost of electricity through technological innovations.”

opment, rooftop and grid-connected solar power plants, and power transmission and distribution projects. Its work portfolio includes about 2,500 MW of capacity distributed across Tamil Nadu, Madhya Pradesh and Kerala. We have about 900 MW of wind power projects under development at various stages in Karnataka, Tamil Nadu and Maharashtra.

“The MNRE should look at enforcing state-specific directions for investors to get greater clarity on bids.”

Kshema Power’s experience in this business has been a mixed bag. We have witnessed a sharp change in the existing industry practice, which will prove to be good given the rise in energy consumers and the challenge to keep the cost to lowest levels possible. Getting the right kind of land and ensuring smooth gridconnectivity have been some of the primary issues in the wind industry. What makes it even more challenging is the fact that these need to be addressed during the short duration of project completion schedules specified in the development guidelines.

are much different from those available on paper. Moreover, there are issues with respect to the right-of-way and access to the lines. Despite these risks and challenges, the new trends in the wind power industry are going to be project allocation and tariff determination through reverse bidding and innovation to optimise the project execution process.

Ramkumar P.

Mahesh Palashikar the control systems. The cost reductions by bringing these changes will not be small, instead they may result in a breakthrough decrease in the cost of energy. We believe that whatever the progression in the auctions, there are four or five major stakeholders in the field. There is an investor who expects certain equity returns; then there is a lender who can only afford so much of debt level, and further, there is the technology provider who can only go up to a certain point to survive. The ministry should look at a phased ramp-up of the capacity of auctions and we believe there are multiple global examples that we can learn from for better implementation of this. In addition, progressive and not retrospective certainty in policies is required. Ramakumar, P. Kshema Power is focusing on three business verticals including wind farm devel-

While IPPs are optimistic about the way the market has turned around, only the execution of the projects will really determine the commercial sense of these projects. This is important because when it comes to the physical execution of the project we have seen high cost overruns at multiple locations. For example, in the case of Tamil Nadu there have been cost overruns because the actual land costs

In the current scenario, it seems as if the industry did not expect tariffs to fall to such drastically low levels. So, with the impending second 1,000 MW tender by the Solar Energy Corporation of India (SECI), there is still some scepticism regarding prices. We feel that while the bids were aggressive in the first auction, they are going to remain at similar levels for the impending second tranche as well. It is important for SECI’s initiatives to be complemented by the states. However, except Tamil Nadu and Gujarat, not many states have come forward to take it up. So the question arises as to where the future wind capacity is going to come from, beyond the already saturated wind power states. Meanwhile, we are developing projects worth 500 MW in Maharashtra and about 380 MW in Karnataka, which are both good wind states. But the investors do not seem to be quite convinced regarding this. This will, however, change with growing capacity addition. Our recommendations to the MNRE are that it should look at enforcing state-specific directions for investors to get greater clarity on bids. Further, given that each state has a different wind regime, there is a need for state-specific guidelines that can help projects become more attractive. ■

52 ● Renewable Watch ● September 2017

PERSPECTIVE

Lighting Up Lives Solar innovation by IIT Madras drives economic growth in rural India Aditya Lolla, Project Officer, Center for Decentralized Power Systems, Indian Institute of Technology Madras

Many studies have already established the direct link between energy access and higher incomes, thereby validating a high correlation between energy availability and human development, especially in developing countries. Today, nearly 300 million people in rural India lack access to grid-connected power while those who do have access, endure poor quality grid power, with either no power or power outages for a large part of the day. It is in this context that solar energy, when it is made affordable, introduces a completely new paradigm with an opportunity to directly target remote communities and bridge infrastructural, economic and social gaps. India is blessed with a high level of solar irradiance. With the prices of solar panels falling rapidly, especially in the past few years, solar power is set to become commercially mainstream, encouraging many entrepreneurs as well as private investors. What is needed now is the development of energy-efficient systems, which can reduce the power requirement from solar panels and take advantage of the falling prices. Decentralised rooftop solar photovoltaic (PV) can offer the most affordable power solution, irrespective of whether the grid is present or not. Solar-DC Inverterless, a technology developed by the Indian Institute of Technology, Madras, is one 54 â&#x2014;? Renewable Watch â&#x2014;? September 2017

such energy-efficient innovation that is lending weight to this narrative. In a traditional alternating current (AC)based solar power solution, direct current (DC) power generated at the solar PV panel needs to be converted to AC for being combined with the grid. An AC-toDC converter is required when solar and grid power is to be used to charge the battery (which is inherently DC) and a DCto-AC converter is needed to run AC appliances. Now, losses in each of these converters is at least 15 per cent at the lower power levels (less than 1 kW), and the total losses in the system would be nearly 45 per cent, excluding battery losses. As a result, the affordability of solar power takes a beating. Incidentally, all appliances today are becoming DC based and employ AC-to-DC drivers, adding to inefficiencies and costs. Solar-DC Inverterless overcomes this chal-

lenge as it involves moving to DC appliances on a 48V DC internal distribution line within homes with charge controller (Inverterless), allowing the entire system to operate on DC. A single AC-to-DC converter is required to draw power from the grid, if desired. It leverages the power advantages that DC appliances bring and couples it with an extremely energy-efficient charge controller. This system is 90-94 per cent efficient and as a result, the system sizing requirement falls by more than half as compared to an equivalent AC-based solar solution. Ultimately, this results in a per unit cost of around Rs 4 and an energy bill saving of 50 per cent compared to its AC counterpart.

But what does this mean for rural India? The solar-DC system broadly has three benefits. It reduces the power bill significantly for lower-income rural homes. It provides power backup for grid loadshedding and ensures 24x7 good quality power sup-

Image credits: Abhinav Ram Aluka

ural India, home to about 833 million people, is gradually ushering in new growth opportunities for the corporate sector, and is set to become a vital cog in the countryâ&#x20AC;&#x2122;s growth story over the next decade. However, one of the biggest hindrances to this narrative is the lack of access to good quality, reliable power supply.

A home in Kundithal, a tribal hamlet in the Nilgiri forest, running on Solar-DC Inverterless

PERSPECTIVE

Local entrepreneur installing Solar-DC Inverterless in a home in Jogi Thanda hamlet in Nalgonda, Telangana

A home in Belagavadi village in Karnataka, powered by SolarDC Inverterless technology

ply. Further, it makes decentralised solar the most affordable option for powering homes in the lower tier of the energy ladder.

Thar desert to fluvial villages along the Brahmaputra river in Assam, from tribal hamlets in the Nilgiri forest reserve in Tamil Nadu to cotton farming hamlets in Telangana, Solar-DC Inverterless has made its way into different types of terrains and homes. In each of these places, there was a conscious effort to develop an ecosystem for the implementation of Solar-DC Inverterless technology to ensure the sustenance and evolution of the technology. A pool of local technicians for repair and maintenance work had to be developed, which, in turn, created a platform for budding local entrepreneurs. Consequently, feedback coming in from all these places is suggesting significant gains, not just in terms of power consumption but also in terms of education, health and rural entrepreneurship.

Today, Solar-DC Inverterless is powering more than 10,000 households across 11 states in India. In Rajasthan, as many as 71 villages with 4,000 households in Jodhpur and Jaisalmer districts have been fully electrified using this technology. In Assam, as of August 2017, about 6,000 off-grid homes have been installed with these systems, leading to 100 per cent electrification in about 90 villages. It has also been deployed at several places that have grid connectivity but suffer from frequent and long hours of load shedding. Several other proof-of-concept deployments are being carried out in different states including Andhra Pradesh, Odisha, Tamil Nadu and Telangana. From villages in Rajasthan’s

For instance, consider Belagavadi, a vil-

Light for the first time in the pitch-dark nights of Bhomji ka Gaon – Solar-DC Inverterless in Rajasthan

lage two hours north of Bengaluru in Karnataka, with 220 homes running on this technology. The statistics available from the Bangalore Electricity Supply Company suggest that grid consumption in many of these households has reduced by 40 per cent post the deployment. More interestingly, a new dynamic emerged wherein more people chose to stay back in the village even during the hot summer months compared to the previous years when they would migrate to Bengaluru in search of temporary work during these months. As a result, local productivity is on the rise. This clearly points towards a correlation between good quality, affordable power and local jobs/business development, leading to a greater impact on the economic development of the poorest and the most vulnerable. The more obvious benefits brought about by extending the hours of available light through solar energy were visible at all the deployment sites, with women taking up activities like making handicrafts and children studying even after sundown. A simple innovation is enabling vulnerable groups overcome an issue bigger than poverty – poverty of their aspirations. Therefore, it is crucial to build on the momentum that has been created by making available high quality, clean power to rural homes at an affordable cost. The need of the hour is the creation of a conducive financial and institutional environment to unlock the true potential of solar energy and bring about huge improvements in education, health care, irrigation, communication and tourism in rural areas. Solar-DC Inverterless has shown how the most vulnerable population, operating with predictable access to power, can usher in economic activity that is otherwise not possible. It underlines how improving access to solar power can play a telling role in pulling communities out of poverty, and inspire socially and financially inclusive solutions. India is on the cusp of a solar power revolution. The time has come for India to leverage the promise of solar energy in its truest sense. ■ September 2017 ● Renewable Watch ● 55

STATE FOCUS

RAJASTHAN

Renewables Frontrunner Rajasthan strives to overcome challenges to maximise its potential the past 24 months, at least 19 petitions have been filed by more than half a dozen players, alleging that the frequent backing down of renewable energy generation by states like Rajasthan during the peak season, citing grid security as the reason, has resulted in cumulative generation losses of over Rs 1 billion for these firms. The petitioners included ReNew Wind Energy, CLP Wind Farms, Orange DND Wind Power, Ostro Renewables, Clean Wind Power (Devgarh), Mytrah Vayu and Tanot Wind Power.

ajasthan receives the highest solar irradiation in the country, along with high wind speeds. It also has plenty of wasteland to install solar and wind power plants. To its credit, the state has tapped this potential and emerged as one of the largest renewable energy producers in the country. As of July 2017, Rajasthan had a total installed solar capacity of 1,961 MW, and a wind power capacity of 4.4 GW, the second and fourth highest in the country. Despite being the best destination for renewable energy development in India, Rajasthan is mostly in the news for the issues being faced by solar and wind developers in the state. These issues range from delayed tendering processes and payments by discoms to inadequate transmission infrastructure and backing down of the grid. The latest issue pertains to the state discoms delaying the release of the late payment surcharge (LPS) to wind power generators even after the state regulator, in August 2017, directed

56 ● Renewable Watch ● September 2017

them to clear all dues within three months. The discoms are looking to get a 50 per cent discount on the LPS due to wind power producers, most of whom are not willing to agree to the same as it will impact their project returns. Discoms are already reportedly delaying payments to wind and solar power generators by 6-12 months, putting the cash flows of the smaller renewable firms in particular under severe stress. This has largely been a result of the stressed balance sheets of discoms, which are not in a financial position to release payments. Existing investors in the sector are also wary on account of discoms in the state curtailing solar and wind power, and issuing backing down instructions randomly, asking generators to unplug from the grid. In response to the backing down instructions by utilities, a number of petitions have been filed by developers before the central and state power regulators. Over

All these issues have had an adverse impact on investor confidence in the state’s renewable energy sector. Renewable Watch takes a look at the state’s current renewable energy status, the ongoing initiatives, upcoming tenders and policies, and the way forward...

Solar: Big play The state’s solar power policy, which came into effect on October 8, 2014, set a target of 25,000 MW to be achieved through utility-scale projects, solar parks, etc. This is considerably higher than the Ministry of New and Renewable Energy’s (MNRE) target of 5,762 MW. Moreover, the state has a target of installing 2,300 MW of solar rooftop capacity. In order to achieve this, the state government has introduced net metering for grid-connected systems. As of December 2016, 19.08 MW of rooftop capacity had been installed in the state as against the sanctioned capacity of 31 MW. The solar segment in the state has seen a growth rate of about 24 per cent during the past five years. In October 2016, the Rajasthan Electricity Regulatory Commission also revised its solar renewable pur-

RAJASTHAN

chase obligation (RPO) targets, in line with the national solar RPO trajectory. For the years 2017-18 and 2018-19, these targets have been set at 4.75 per cent and 6.75 per cent respectively, requiring 1,997 MW and 2,963 MW of power generation. Currently, 440 MW of solar park capacity is under development while 240 MW is in the pipeline. However, 2,671 MW of capacity still remains unallocated. The state holds the second position in the country, after Andhra Pradesh, in terms of operational solar park capacity. Rajasthan has been in the limelight for record low solar bids in the country over the past year. Bids as low as Rs 2.62 per kWh and Rs 2.44 per kWh were seen in the recently held tenders at the Bhadla solar park, and this has set the tone for future tariffs to be determined under upcoming tenders in the country. In fact, following the Bhadla solar park bidding, many states’ discoms have asked developers to renegotiate their tariffs. There are several reasons for Rajasthan becoming the trendsetter for low tariffs. The state receives the highest solar irradiation in the country. Moreover, there has been a fall in domestic debt costs by up to 1 per cent in the past year. Further, factors such as lower solar park charges; healthy balance sheets of participants and access to low-cost foreign capital; rela-

Solar parks in Rajasthan Location

Capacity (MW)

Bhadla Phase II, Bhadla

680

Bhadla Phase III, Bhadla

1,000

Ugraas, Nagnechinagar and Dandhu

750

Essel Surya Urja Company of Rajasthan Limited

421

Adani Renewable Energy Park Rajasthan Limited

villages, Phalodi Tehsil, Jodhpur district (450 MW); and Lavan and Purohitsar villages, Pokaran Tehsil, Jaisalmer district (300 MW) Fatehgarh and Pokaran, Jaisalmer Source: MNRE

tively stronger rupee resulting in low project development costs and hence lower tariffs; and the Solar Energy Corporation of India’s (SECI) improved credit rating of AA+ have reduced risks as far as power offtake is concerned. In addition, the entry of foreign firms and a number of domestic players having access to a large pool of low-cost funds has allowed developers to quote such low bids. The above factors have increased the competition in the Indian solar power space, and with developers vying for the limited number of bids available in the solar space, the tariffs have plummeted. Despite Rajasthan’s huge solar potential, the state suffers from heavy transmission and distribution (T&D) losses. In addition, curtailment remains a serious issue. Solar

4.02

4.31

3.33 2.78

2.50

1.81

2.00

1.27

1.50

0.94

1.00

0.69

0.55

0.33

0.50

0.29

0.54

0.00

2014

Source: Renewable Watch Research

2015

Surya Urja Company of Rajasthan Limited Adani Renewable Energy Park Rajasthan Limited

4.00

3.00

Rajasthan Solar Park Development Company Limited

500

Wind and solar energy in Rajasthan (GW)

3.50

Solar park developer

Bhadla Phase IV, Bhadla, Jodhpur

5.00 4.50

STATE FOCUS

2016

2017

Wind - Capacity addition per year

Solar - Capacity addition per year

Wind - Cumulative installed capacity

Solar - Cumulative installed capacity

developers face curtailment as forecasting has not yet been made mandatory, and the problem is aggravated due to the inadequate interstate power transmission infrastructure. Meanwhile, the state discoms, which are already under debt, have been unable to honour their power purchase agreements, making the developers hesitant towards setting up power plants in the state. However, seeing the progress under the Ujwal Discom Assurance Yojana (UDAY), developers are again keen to invest in solar park projects in the state. Further, given the large number of solar parks in the state, green energy corridors (GECs) are being set up to ease power evacuation and reduce congestion in transmission lines in order to prevent curtailment. According to the Power Grid Corporation of India, transmission lines are being set up near Bhadla Phases II and III, Essel Saurya (Phalodi/Pokhran) and Fatehgarh (Jaisalmer) solar parks. In the Bhadla solar park, three 132 kV pooling substations will be constructed for power evacuation with a facility to upgrade to 220 kV in the future. The lines will be interconnected with the 400 kV high voltage substation at Bhadla. The power will be evacuated to the 400 kV Mokla substation and the 765/400 kV Jodhpur substation through a double circuit line. It is speculated that Rs 14,100 million of financing will be required for setting up the transmission infrastructure at the Bhadla (Phase II and III) and Pokhran solar parks, whereas September 2017 ● Renewable Watch ● 57

STATE FOCUS Rs 5,480 million will be required for the Fatehgarh solar park. Leveraging its rich solar potential, Rajasthan has been one of the first states to employ solar power for agricultural use by promoting solar pumps. In addition to a 30 per cent subsidy offered by the MNRE, the Rajasthan government provides a 56 per cent subsidy through the Rashtriya Krishi Vikas Yojana.

Wind: Still banking on FiTs According to the National Institute of Wind Energy, Rajasthan has a total wind power potential of 18,770.5 MW at 100 metres hub height. So far, only 4,305.50 MW of wind capacity has been installed in the state, leaving a vast untapped potential. In contrast to the competitive bidding process, Rajasthan recently released wind feed-in tariffs (FiTs) for 2017-18. The FiT set for the wind power plants in the Jaisalmer, Jodhpur and Barmer districts is Rs 4.87 per kWh with the accelerated depreciation (AD) benefit and Rs 5.26 per kWh without AD. In regions other than those specified above, the FiT stands at Rs 5.12 per kWh and Rs 5.52 per kWh, with and without AD respectively. With no notification on future plans, the states’ stance on the adoption of competitive bidding is still awaited. Nevertheless, Rajasthan has recognised the benefits of competitive bidding after the tender released by SECI resulted in tariffs as low as Rs 3.46 per kWh. The state officials agree that lower tariffs will translate into greater offtake of wind power by discoms, thus facilitating the fulfilment of the nonsolar RPO through wind capacity addition. However, the wind energy segment in Rajasthan is facing several challenges, the biggest issue being payment delays faced by developers. These delays directly translate into diminished margins, and increase the cost of wind projects. Discoms argue that the payments are delayed because of the high tariffs. Even though the state has reduced the FiT in light of the recent 58 ● Renewable Watch ● September 2017

RAJASTHAN

bidding-based tariffs, the tariffs are still not as low as the ones observed as a result of competitive bidding. Moreover, the power evacuation infrastructure in the state is insufficient to cater to the installed as well as upcoming capacity. This leads to the curtailment of wind energy. It is common for the state load despatch centre to curtail wind power during the pre-monsoon and monsoon months when wind speeds are high, citing erratic and unpredictable wind behaviour during the day leading to possible load tripping. Due to this the developers are unable to get planned returns on their investment. To resolve this issue, the state will implement forecasting and scheduling guidelines. Meanwhile, to fully exploit the state’s wind potential in solar-rich locations, Rajasthan is actively moving towards solar-wind hybrid projects. To this end, three areas have been identified, Dag, Gara and Basi, with a potential of 3,961,500 units, 3,512,032 units and 3,506,152 units respectively per MW per year.

Struggling discoms Rajasthan still suffers from high aggregate technical and commercial losses with its three utilities accounting for a combined loss of 24.88 per cent in 2016-17. Even though the situation has improved under UDAY, Jodhpur Vidyut Vitran Nigam Limited reported 21.36 per cent losses, Ajmer Vidyut Vitran Nigam Limited 23.53 per cent losses and Jaipur Vidyut Vitran Nigam Limited 28.69 per cent losses, in 2016-17. This has affected the discoms’ financial health and their ability to meet the RPO targets. Non-solar and solar RPO targets for 2016-17 were set at 8.9 per cent and 2.5 per cent respectively, but the state reached a total RPO compliance level of 78.9 per cent. In the past, state discoms have complied fully with the set targets, but now they are faltering. Therefore, unless the financial condition of discoms improves, the RPO targets will not be met. Moreover, the state has now attracted negative sentiment due to the non-payment of dues by the discoms. In addition, the aver-

age cost of the supply-aggregate revenue requirement gap was high at Re 0.65 per unit. Under UDAY, tariff revision has been filed but the new tariff order has not been issued yet. As of June 2017, Rajasthan ranked eighth under the UDAY state/discom quarterly performance ranking. The state has already issued bonds to improve the status of its discoms, and is planning to issue bonds worth Rs 7,612 million in the future. With these initiatives, it aims to enhance its T&D capabilities and increase power generation in the state.

Conclusion Rajasthan has set a benchmark in both solar and wind capacity addition. The state has immense renewable energy potential, and with proper policy implementation, it can achieve the set targets. In addition, upcoming solar parks in the state are expected to attract huge investment while the current tariff trends are expected to continue in the future. Rajasthan discoms have benefited from UDAY, and with the introduction of GECs for inter-and intra-state transfer of renewable energy, the losses and curtailment are expected to come down. The state has an active interest in maximising its renewable energy potential through programmes for rooftop solar, solar pumps and wind-solar hybrid power plants. In order to achieve its RPOs, Rajasthan will have to increase its wind power capacity by introducing competitive bidding. This will benefit both the developers and the discoms. Moreover, with increasing renewable energy penetration, implementing the scheduling and forecasting guidelines will become a priority for the state. Considering the role of energy storage in improving renewable energy integration, the authorities are planning to undertake large-scale implementation of these projects on a priority basis. By reassessing the policies and implementation mechanisms, and consolidating its plan of action, the state can meet its renewable energy targets and attract greater investment in the sector. ■

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SPOTLIGHT

RENEWABLE FINANCING

Attracting Equity Changing risk profile calls for innovative financing mechanisms

ndia’s ambitious targets, record capacity additions and a steep fall in tariffs in 2016-17 have attracted global attention, with domestic as well as international investors and developers expressing interest in the country’s renewable energy sector. This rapid capacity addition has necessitated financing through non-conventional mechanisms. An estimated $100 billion of asset finance will be required to realise the 175 GW by 2022 target. To this end, equity financing has emerged as a successful mechanism for funding renewable energy projects.

Equity financing Equity finance enables a financier to own a permanent share in the project. Unlike debt, where the investor is repaid the borrowed amount with a certain interest, equity finance not only provides funds for the project but also diversifies the owner-

60 ● Renewable Watch ● September 2017

ship, thereby distributing the risks associated with the project. In other words, equity-based investments pay for themselves even after the investment has run its due course. This reduces the cost of capital for developers by precluding the need for them to pay interest and thereby increasing the net profit from the project.

funds to bid for new tenders.

Financing through equity enables developers to share their business and expand it. It also enables them to raise capital and acquire professional expertise about the sector from investors. Moreover, equity financing is a popular option for companies that are looking to invest in green projects but lack the core competency to develop them. For projects being developed by new entrants and start-ups, the infusion of capital in exchange for stake in the project can help the developers avail of multiple benefits to grow and use the

Private funds are typically raised by companies that usually do not participate in public trading and, therefore, the money is directly injected into the company. Another innovative mechanism has emerged in the recent past that allows financiers to invest capital directly into projects in lieu of partial ownership of renewable power plants. While this decouples the investor from the risks associated with the company, it also reduces the risk of the capital being diverted for purposes other than what it is intended for. Considering the high risk compo-

Multiple methods of raising capital through the equity route are prevalent in the Indian renewable energy market, including private funding, publicly raised funding, mergers and acquisitions, and infrastructure investment trusts (InvITs).

SPOTLIGHT

RENEWABLE FINANCING

nent associated with greenfield projects, this type of financing is restricted to only operational projects. In public funding, capital is raised through an initial public offering or through a divestment of company shares on the stock exchange. Declining power tariffs, large orders and low returns have compelled companies to go public and dilute their ownership to generate sufficient money for fulfilling their project commitments. In addition, public funding opens up the investment space for renewable energy and provides a common platform for both companies as well as individuals to purchase shares of renewable energy companies listed on the stock exchange. Mergers and acquisitions (M&As) provide another alternative for raising funds. This form of equity financing is becoming increasingly popular, with big market players being acquired by even bigger players. With steeply declining tariffs, many companies lacking competency and funds are finding it difficult to compete with big market players for upcoming projects. To this end, merging two companies or the acquisition of one company by the other is becoming popular, thus benefitting both parties. An example of this is the recent acquisition of Welspun Renewables by Tata Power Renewable Energy Limited (TPREL). The move has been advantageous for both companies as Welspun lacked the requisite expertise and funds to win project bids and TPREL was seeking expansion of its resources for developing more projects. In addition, M&As have increasingly become the preferred tool for new companies or financiers wanting to enter the renewable energy market. In February 2017, Japanbased JERA, Inc., a joint venture between the Tokyo Electric Power Corporation and Chubu Electric Power, acquired a 10 per cent share in ReNew Power Ventures Private Limited for $200 million to enter and take advantage of the growing renewable energy sector in India. InvITs too have found significant application in the Indian renewable energy space

owing to the policy and regulatory amendments by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India, and greater tax benefits. InvITs are useful for making the developers’ tied-up capital available for investment, as well as attracting foreign equity and lowering the loan exposure of domestic lenders. Recently, IL&FS and Mytrah Energy floated wind energy-specific InvITs, which are awaiting SEBI’s approval.

Challenges Equity finance for renewable energy projects comes with its own set of challenges. Funds raised through this mode have a larger gestation period, given the contractual formalities for the transfer of ownership. While this may not be an issue for a developer with no or completed assets, it could prove to be detrimental for those with approved or under-construction projects. Moreover, developers need to ensure high returns for investors as compensation for the risks. Equity investments in India are heavily skewed towards companies focusing on low-risk renewable energy segments like wind and solar power. This inhibits investments from being channelled into other green technologies such as small-hydropower, waste to energy, biomass energy and geothermal energy. Additionally, the renewable energy market is tightly controlled by government policies. In India, the sector being relatively new, the policies are revised within short durations, thereby increasing the risk factor. Moreover, there is confusion regarding policies, and lapses in

implementation by the regulatory authorities are common. Given the steep fall in tariffs discovered in the first competitive bidding for 1,000 MW of wind projects, the risk of power purchase agreements signed at higher tariffs being dishonoured and delayed payments have increased. In addition, since there are only a few renewable energy-rich states, investments could be limited to projects that are developed only at these locations with attractive policies and investment benefits not finding their way to underserved areas. The need for low-interest debt requires the equity-based capital to remain invested in a project for a long duration of time.

Conclusion Renewable energy investments in India have seen a major shift in the past year with players from national and international markets showing interest in funding solar and wind projects. Although the market offers significant opportunities to investors in terms of the quantity of projects envisaged, the quality of returns has dwindled over time due to various factors. Although innovative funding mechanisms are being explored and promoted by the government, policy and regulatory bottlenecks need to be managed in order to remove investor inhibitions. Moreover, multiple operational issues exist in this space that requires immediate solutions to lower the risk of capital for projects. With falling margins and depleting returns, the renewable sector could be faced with waning investor interest, which can only be countered through innovative equity financing mechanisms. ■ September 2017 ● Renewable Watch ● 61

SPOTLIGHT

RENEWABLE FINANCING

Debt Surge Bonds and borrowings drive capital influx in the renewables market By A shay A bbhi

ith the constantly evolving ecosystem of the Indian renewable energy market, financial instruments too have developed over the years. The government envisages an investment requirement of $100 billion to realise the renewable energy targets over the next five years. Access to capital, which was once a challenge for the fledgling market, has now become a key driver for sector growth, owing to the low interest rates and longer tenors. Further, record capacity additions and steeply falling tariffs that guarantee power offtake by discoms have significantly increased investor confidence. This, in turn, has made way for newer financial instruments, especially in debt financing.

Bond market In the first seven months of 2017, India’s green bond issuance reached $2.1 billion, including $1.5 billion raised by the Greenko Group and Azure Power together in just two weeks in July. The amount is enough to fund the debt of over 3.5 GW of renewable energy projects. Green bonds are debt instruments for climate-focused investment solutions that have helped reduce the overall cost of funds. These bonds are particularly useful for institutions such as the Green Climate Fund, the Green Investment Bank and the Indian Renewable Energy Development Agency (IREDA), which are mandated to invest in only clean energy options. In 2016, the cumulative global valuation of green bonds since their inception in 2007 reached $180 billion. The annual issuance peaked in 2016 at $81 billion, nearly double that issued in the preceding year ($41 billion), indicating a rapid increase in the availability of debt capital for renewable 62 ● Renewable Watch ● September 2017

energy projects across the globe. Despite having entered the market fairly recently, India has emerged as one of the largest green bond markets in the world, driven by favourable policies and an evolving business environment. The first green bond in India was issued by YES Bank in 2015. Since the issuance of its $3,300 million bond with a term of seven years, several public and private companies have issued bonds. Noteworthy among these are masala rupee bonds worth Rs 20,000 million issued by NTPC in October 2016. These bonds have a fiveyear maturity and an interest rate of 7.48 per cent. NHPC issued corporate bonds worth Rs 45,000 million, while Axis Bank issued maiden green bonds of $500 million in June 2016. The market grew to cumulatively reach $2.7 billion in 2016, making India the seventh largest green bond market in the world.

file of its customers that mainly comprise financially poor discoms. This indicated the inherent challenges associated with the green bond and renewable energy markets in India. The credit profile of customers, therefore, assumes significant importance while raising capital through bond issues. The greater the risk associated with customers, the lower will be the credibility of the debt bond. Another emerging debt instrument, yieldcos, are bonds for the pooled operational assets of a company. For instance, all the assets of a company, irrespective of their size, location and type, can be pooled together to issue bonds that can then be subscribed to by financial institutions. This helps reduce risk as the bond is issued against the company’s portfolio instead of a particular project, thereby reducing subscription costs considerably.

Commercial lending On the flip side, Continuum, backed by Morgan Stanley, failed to raise capital for its $400 million bond due to the weak pro-

Borrowing capital for renewable energy projects is no longer restricted to domestic banks; multilateral banks and non-banking

Recent Bond Deals (April 2016-July 2017)

M = million; Bn = billion; Wt Avg = Weighted Average Source: Media reports

RENEWABLE FINANCING

financial institutions (NBFCs) too are looking to invest in the Indian market. Multilateral banks typically offer low-interest loans as compared to domestic banks. The tenor of capital borrowed from these banks is usually 15-18 years against 7-8 years provided by Indian banks. Also, the involvement of international banking entities improves the credibility of projects, further increasing investor interest. In the past year, 24 deals have been signed between companies and commercial lenders, a key deal being the one between the Asian Development Bank (ADB) and the World Bank Group. ADB gave a $390 million loan to ReNew Power and another Rs 11,375 million to Mytrah Energy Limited (on a project finance basis). It also provided a $1 billion loan to Power Grid Corporation of India Limited for strengthening its grid infrastructure. In an institution-to-institution deal, ADB loaned another $200 million to IREDA, which provides low-interest capital for renewable energy development. The World Bank Group has provided loans of $1.02 billion to the Indian government, in addition to $625 million to the State Bank of India (SBI) as a long-term loan exclusively for the development of the renewable energy sector. Germanybased KfW has given loans worth Rs 3,000 million each to the Kerala and Maharashtra governments for the development of two large floating solar park projects with a total capacity of over 40 MW. The bank has given another $1 million as a soft loan to the Government of India for investment in green projects. Moreover, the New Development Bank (erstwhile BRICS Development Bank) has provided Canara Bank with loans worth $250 million for investment in the sector. Entities such as IREDA, PTC Financial Services, Infrastructure Development Finance Company (IDFC), India Infrastructure Finance Company Limited, Infrastructure Leasing & Financial Services, SBI Capital Markets and L&T Infrastructure Finance Company are some of the key NBFCs that have provided financial support to Indian renewable energy develop-

ers. Further, prominent international NBFCs have also provided long-term capital as loans to renewable energy companies. Primary among these is the Overseas Private Investment Corporation, an independent US government agency, which has loaned $20 million to Azure Power for a period of 15 years at a capital cost of 4.74 per cent. It has also provided $250 million to ReNew Power and another $20 million to the Indian government. Considering the growth of the renewable energy sector, private NBFCs have emerged as significant lenders. This increases the competitiveness of debt capital, thereby improving the terms of borrowing from these entities. Some of the new NBFCs are Tata Cleantech Capital, a joint venture between Tata Capital and IFC; and SREI Infrastructure Finance Limited (SIFL). Among domestic commercial borrowings, IDFC has granted loans worth Rs 6,750 million to Solairedirect Energy, while the National Bank of Agriculture and Rural Development has loaned Rs 2,050 million to the Rural Infrastructure Development Fund of Haryana. Another prominent deal is the one between the Abu Dhabi Investment Authority (ADIA) and Greenko Energy Holdings for loans worth $230 million. Greenko secured another $155 million in loans from ADIA in partnership with GIC Private Limited (earlier known as the Government of Singapore Investment Corporation). An emerging debt-based financial instrument is the credit guarantee scheme. This involves a third-party credit guarantee agency assuming the post-construction

SPOTLIGHT

project performance risk and insulates the lender from payment delays and defaults, thereby guaranteeing its return on investment. This is helpful in the Indian context as the discoms’s poor financial health is resulting in reduced investor interest in the renewable energy sector. It enables financial institutions to extend loans or invest in bonds at competitive prices.

Future outlook India is expected to require capital worth $20 billion per annum for the next five years to achieve its renewable energy target of 175 GW by 2022. The evolution of debt financing over the past year has set the pace for the realisation of these targets by significantly reducing the cost of capital. Moreover, competitive interest rates with longer tenors have lent considerable credibility to debt financing instruments. However, real-time challenges pertaining to the grid integration of renewable energy and the backing down of solar power plants despite having a “must-run” status continue to exist. Focused government policies and favourable developments amidst improvements in the renewable energy space have reduced the risks associated with green projects. Meanwhile, owing to low tariffs, the offtake of renewable power has improved and the issue of discom payments is being resolved through multiple measures by the government, thereby improving investor confidence in the sector. In this context, debt instruments such as green bonds are expected to gain traction in the market, while commercial borrowings from domestic and international multilateral organisations are likely to increase over the next few years. ■ September 2017 ● Renewable Watch ● 63

SPOTLIGHT

RENEWABLE FINANCING

Treading Cautiously Lenders adopt a wait-and-watch approach amidst uncertainty in wind regime The wind energy segment has undergone a number of significant changes in the recent past, such as a move from the feed-in tariff (FiT) regime to competitive bidding for project allocation. As such, the segment is faced with uncertainty, which could slow down the pace of growth following a record year. Caught in the crosshairs of these regime and policy changes are financiers, who have adopted a cautious approach to future lending as well as to their past investments. At the “Wind Power in India” conference organised by Renewable Watch recently, leading financiers discussed the current lending environment, key challenges in the industry and ways to overcome them. Excerpts... C.M. Khurana The wind energy sector has seen a lot of activity recently. We surpassed the 2016 estimates by adding capacity worth Rs 54 billion as compared to the target of Rs 40 billion. While 2,300 MW was added in 2015, 3,500 MW was commissioned in 2016, the highest in terms of incremental capacity addition so far. India Infrastructure Finance Company Limited (IIFCL) has undertaken 33 projects so far, aggregating sanctions of Rs 39 billion, of which our disbursements are Rs 29 billion covering 2,800 MW. Out of the 33 projects, 32 have already achieved commercial operation date (COD). However, compared to last year, there are fewer projects in the pipeline.

introduced an element of uncertainty, which reduces the viability of projects. We feel that contracts have to be binding under all circumstances. Some degree of specificity and certainty will have to prevail; otherwise all industry assumptions will go haywire.

The shift to competitive bidding is an indicator of the proactive stance of the government towards the wind segment. An element of aggression is expected in the initial stages, which will be balanced over a period of time as people gain experience.

The renewable energy sector has been asking for financial innovation and IIFCL has come up with a series of new instruments to finance the sector. We undertake direct lending of up to 20 per cent of the project cost. In addition, we are open to a “takeout finance scheme”, which refers to the refinancing of a project a year after it has achieved COD. In fact, one can charge a lower rate of interest through back-ending so that the developer can have the benefit of having completed the project. Moreover, we have reduced our base rate to 8.95 per cent along with the spread, which is now at 20-25 paise, down from 40 paise. Both of these amounts to a benefit of almost 50 paise.

The renegotiation of power purchase agreements (PPAs) has created some scepticism regarding the industry. It has also

Quasi-equity instruments are also on the table, by way of which we fund 10 per cent of the project cost. When the borrower is

unable to raise equity, we provide debt on which interest is charged but not recovered for the first five years. Meanwhile, credit enhancement is also available to wind project developers. Through this instrument, we help them in tapping the bond market for more capital. Further, IIFCL provides a guarantee by which the developer’s rating automatically becomes “AA” or “AAA”, which makes it investible, enabling it to borrow from the bond market. It is my belief that five years down the line, there will be ample power, reasonable tariffs and reasonable prices if we move in the right direction.

Rupesh Singh The wind industry is undergoing a paradigm shift from the FiT model to a competitive bidding model, as a result of which we are witnessing less activity this year as compared to last year. Attempts to renegotiate PPAs and the issue of grid curtailment have made us cautious about the sector at the moment. As of now, Axis Bank has an exposure of Rs 50 billion. Recently, we also conducted a green

C.M. Khurana

Rupesh Singh

Chief General

Senior Manager,

Sitesh Kumar Sinha

Manager, India

Larger Corporate-

Vice-President,

Infrastructure

Credit, Axis Bank

PTC India

Finance Company

Financial Services

Limited

64 ● Renewable Watch ● September 2017

SPOTLIGHT

RENEWABLE FINANCING

bond infusion of $500 million, which has been fully deployed. The wind segment is currently weighed down by a number of issues. One of the challenges is the big data problem. In our financial models, the most sensitive variable is the plant load factor (PLF). There is empirical evidence of a wide divergence between the findings of wind assessment studies and real-time PLFs. Further, there are issues regarding land acquisition and right of way. There is also a growing concern that capacity addition is running ahead of evacuation infrastructure. While new capacity addition takes 10-12 months, installing evacuation infrastructure takes nearly two to three years. Therefore, evacuation planning has to be in place before adding capacity. Based on the credit rating of the developer, we offer rates ranging from 9.5 per cent to 11 per cent and repayment tenors of 15-18 years. We have the standard financial products by way of which we support the project in the operational phase, with a topup available in the construction phase. Apart from this, we have another product by way of which we open a line of credit backed with a counter-guarantee by nonbanking financial companies (NBFCs) and institutions such as IREDA. Although there is a sense of caution in the wind energy segment that can be attributed to a number of factors such as renegotiation of PPAs, delays in payments and inconsistency of power generation, we remain positive that the segment will become stronger. We are committed to increasing our presence and are selectively looking at opportunities to enable the segment to grow.

Sitesh Kumar Sinha PTC India’s portfolio currently comprises 3,000 MW of sanctioned wind capacity. Since 2012, Rs 40 billion has been disbursed, while current outstanding disbursements stand at Rs 35 billion. At present, there are fewer greenfield wind projects compared to last year. However, a trend analysis of wind installations in the past couple of years shows that more than 50 per cent of the installations have taken place in the last two quarters of the year, owing to certain commercial benefits. Therefore, new capacity additions are still expected to happen by the last two quarters of 2017-18. As an NBFC, our rates are slightly higher than those of commercial banks. We charge more than 10 per cent for projects under construction. Meanwhile, we also offer a discount after COD, typically of 2550 paise. However, being an NBFC enables us to offer a longer repayment tenor of up to 20 years. Apart from the basic financial tools, we offer mezzanine financing at a holding company level, wherein our institution funds temporary liquidity till the project achieves financial closure. In addition, an instrument for working capital is being designed and is expected to be launched soon. This instrument is primarily for any company facing liquidity issues postCOD. We also try to be a part of long-term lending so that the prospects of achieving financial closure are visible to us. Further, the declining financial health of original equipment manufacturers affects us significantly. As a result, project implementation gets delayed, which impacts the tariff, in turn affecting the viability of the project. We are trying to decouple such projects in order to make them viable.

K. Yeptho Deputy General Manager, Indian Renewable Energy Development Agency

As a lender, before the introduction of bidding, wind was considered a more secure segment than solar, not only in terms of generation but also in terms of construction and operation. However, with the tariff decline and the resultant PPA renegotiation issues in the market, the longevity of these

issues has become our biggest concern. The central and state governments must work towards settling these issues for the wind industry to get back on track.

K. Yeptho In 2016, IREDA sanctioned and disbursed funds of about Rs 25 billion. This year, the company has approved sanctions of about Rs 14.85 billion, of which Rs 8 billion has been disbursed to the wind segment. Capacity addition in 2016 was the highest ever. However, in comparison, 2017 does not look as promising even as there are projects happening on the ground. From the perspective of bankers, there is still activity in the segment by way of refinancing of projects. From a greenfield perspective, there are fewer projects compared to the past two to three years. Regarding the renegotiation of PPAs, an interesting point is that while there have been discussions, no such renegotiation has actually taken place. The banking and investment community is waiting and watching at the moment. IREDA charges between 9.7 per cent and 11 per cent for wind projects, based on the credit rating of the developer, while allowing a repayment period of 15 years. We provide securitisation (loan against future receivable surpluses) for all renewable energy projects. We have had a good number of small-hydro projects taking advantage of this instrument along with multiple wind and solar developers. Apart from this, we have short-term loans for equipment manufacturing and other associated services. What we have observed is that the price is mostly decided by equipment suppliers because in addition to providing equipment, they are providing engineering, procurement and construction services as well. Perhaps with the ongoing aggression in bidding, the suppliers will have to rework their approach. This could result in some compromise on the part of the suppliers. Overall, I am still positive about the Indian wind energy industry. ■ September 2017 ● Renewable Watch ● 65

SPOTLIGHT

RENEWABLE FINANCING

Financing Moves Equity and debt deals Key equity deals between April 2016 and March 2017 Acquirer

Target company/project

Issue size

JERA

ReNew Power Ventures Private Limited

$200 million

India Business Excellence II and India

Jindal Power’s stake in Indian Energy Exchange

Rs 980 million

Gale Solarfarms, Tornado Solarfarms, Abha Solarfarms,

Undisclosed

Stake (%) 10.0

Deal month February 2016

4.1

April 2016

Undisclosed

April 2016

Business Excellence II A Suzlon Energy

Aalok Solarfarms and Shreyas Solarfarms Torrent Power

Torrent Solargen’s solar and wind portfolio

Rs 806.3 million

100.0

May 2016

Tata Power Renewable Limited

Welspun Renewables

Rs 92,490 million

100.0

June 2016

CLP India

Suzlon Energy’s 100 MW solar project

Rs 735 million

49.0

June 2016

Amplus Energy Solutions Private Limited

SunEdison’s rooftop solar portfolio in India

100.0

June 2016

GIC and ADIA

Greenko Group

$230 million

June 2016

CDPQ, SGRF and KIA

Resurgent Power

Sembcorp Green Infra

Mulanur Renewable Energy Private Company*

Rs 1,580 million

74.0

June 2016 August 2016

Senvion India

Kenersys India

Undisclosed

100.0

August 2016

International Finance Corporation

Hero Future Energies

$125 million

Undisclosed

August 2016

100.0

October 2016

49.0

October 2016

100.0

October 2016

Greenko Group

SunEdison’s utility-scale renewable assets and portfolio in India

$392 million

Ostro Energy Private Limited

Suzlon Energy’s 50 MW solar project

Rs 490 million

IDFC Alternatives

Jindal Steel and Power’s 24 MW wind project in Satara in Maharashtra

Undisclosed

Canadian Solar

Two Suzlon Energy’s solar projects in Telangana

Rs 264 million

49.0

October 2016

LM Wind Power**

$1,650 million

100.0

October 2016

International Finance Corporation

Hero Future Energies

$125 million

Undisclosed

January 2017

Dino Energy Corporation

Prestige Ocean Holding and Investments’ upcoming 100 MW solar

Undisclosed

100.0

January 2017

Rs 10,000 million

100.0

March 2017

project in Haryana Leap Green Energy

Inox Wind’s 260 MW wind portfolio across Rajasthan, Maharashtra, Madhya Pradesh and Tamil Nadu

Abu Dhabi Investment Authority

ReNew Power Ventures Private Limited

$265 million

Undisclosed

*Special purpose vehicle that has 25.5 MW of wind power capacity in Tamil Nadu; ** Includes LM Wind Power’s global business; NA: Not available Source: Renewable Watch Research

66 ● Renewable Watch ● September 2017

SPOTLIGHT

RENEWABLE FINANCING

Key domestic and external commercial borrowings between April 2016 and March 2017 Borrower

Size of issue

Lenders

Solairedirect Energy

Rs 6,750 million

Infrastructure Development Finance Company

Terms

Power Grid Corporation of India Limited

$500 million

Asian Development Bank

20-year term including 5-year grace period; interest rate determined in accordance with ADB's LIBOR-based lending facility

ReNew Power

$390 million

Asian Development Bank

Power Grid Corporation of India Limited

$500 million

Asian Development Bank

Indian Renewable Energy Development Agency

$200 million

Asian Development Bank and Government of India

Rural Infrastructure Development Fund Haryana

Rs 2,050 million

National Bank for Agriculture and Rural Development

Rs 10,000 million

United States Agency for International Development

Mytrah Vayu Energy Limited

$31 million

ACME Solar Energy Private Limited

$73 million

Piramal Enterprises Limited

Government of India

$1,000 million

World Bank Group

Greenko Energy Holdings

$230 million

Abu Shani Investment Authority

Canara Bank

$250 million

New Development Bank (BRICS)

Greenko Energy Holdings

$155 million

GIC and Abu Shani Investment Authority

Bhageria Industries

Rs 960 million

EXIM Bank

Power Grid Corporation of India Limited

Rs 1,000 million

Asian Development Bank

Government of India

$22.93 million

World Bank Group

State Bank of India

$625 million

World Bank Group

Mytrah Energy Limited

Rs 11,375 million

Asian Development Bank

Essel Infra

$312 million

Piramal Enterprises and APG Asset Management

Loan will be provided on a project finance basis Funds to be used for expanding the company’s solar business

Azure Power

$20 million

Overseas Private Investment Corporation

ReNew Power Ventures

$250 million

Overseas Private Investment Corporation

Government of India

$20 million

Overseas Private Investment Corporation

Maharashtra and Kerala governments

Rs 3,000 million

KfW

Government of India

$1,050 million

KfW

15-year term; capital cost 4.74 per cent

Soft loan

Key bond issues between April 2016 and March 2017 Issuer

Month of issue

Issue size

Terms

YES Bank

September 2016

$3,300 million

7-year bond

TPC

October 2016

Rs 20 billion

Masala rupee bonds; 7.48 per cent interest; 5-year maturity

April 2017

Rs 20 billion

7.25 per cent interest; 5-year maturity

Greenko Group

July 2017

$500 million

Bonds subsidised by 8.7 per cent

NHPC

July 2016

Rs 45,000 million

Corporate bonds

Axis Bank

June 2016

$500 million

Maiden green bonds

Azure Power

July 2017

$500 million

5.5 per cent yield; Bids received for $1 billion

REC

June 2017

$450 million

10-year bond listed on London Stock Exchange; 3.96 per cent yield

Renew Power

November 2016

$5 billion

Certified green bonds

Asian Development Bank

May 2017

Rs 3 billion

Offshore bond with 6 per cent interest; 3.5-year maturity

L&T Infra Finance

July 2017

IFC has so far invested $103 million into the bond

NA: Not available Source: Renewable Watch Research

September 2017 ● Renewable Watch ● 67

UP AND COMING

Up and Coming Nanophotonic Solar Thermophotovoltaic Device Solar photovoltaic (PV) panels have an average efficiency of 15 to 20 per cent, which decreases over the lifetime of a power plant. Due to this, large tracts of land are required for setting up megawatt-scale projects. To overcome these challenges, extensive research is being conducted across nations to increase the efficiency of solar cells. To this end, a team of MIT research scientists have demonstrated a nanophotonic solar thermophotovoltaic (STPV) device that can help more than double the present theoretical efficiency limits of a normal solar panel. This, in turn, would lead to twice the power generation from a given area of the solar panel, ensuring savings in land area and costs. This is the first time that an STPV device has been showcased, which has higher solar-to-electrical conversion efficiency as compared to a normal PV cell. Moreover, the cell claims to theoretically reach efficiency limits greater than that of an ideal solar cell. This study was supported by the SolidState Solar Thermal Energy Conversion (S3TEC) Center, which is funded by the U.S. Department of Energy. A conventional solar cell does not take advantage of all the photons due to which part of the solar energy is dissipated as unusable heat. However, in this new technology, an intermediate component is present which first allows the absorption of heat. Further, the heat is absorbed up to temperatures that

enable the intermediate component to emit thermal radiation. This emitted radiation can then be absorbed by the solar cell to generate electricity. The device consists of a two-layer intermediate absorber material. The outer layer, which faces the sunlight, is composed of an array of multi-walled, vertically aligned carbon nanotubes, which absorb the light’s energy and turns it into heat very efficiently. This layer is bonded tightly to a layer of nanophotonic crystals. These crystals can be modified to emit precisely determined wavelengths of light when heated. The crystals should be heated to an operational temperature of about 1,000°C. In the experiment, it was observed that the crystals continued to emit a narrow band of wavelengths of light, which precisely matched the wavelength that could be captured by an adjacent PV cell for electricity generation. Therefore, the heat which is re-emitted as light can be converted into exactly the colours that match the PV cell’s peak efficiency. During operation, a conventional solar-concentrating system with lenses or mirrors will be used to focus sunlight in order to maintain high temperatures. In addition, an advanced optical filter that lets through all desired wavelengths of light to the PV cell will be used. Any wavelengths reflected by the optical filter will get re-absorbed, thereby maintaining the heat levels of the photonic crystal. The research team has already produced an initial test device with a measured efficiency of 3.2 per cent and with further effort, 20 per cent efficiency is expected to be reached, sufficient for a commercially viable product. The system offers a number of advantages over conventional PV cells. The photonic device produces emissions based on heat rather than light. Therefore unlike PV cells, it remains unaffected by brief changes in the environment such as sudden cloud covers. Moreover, if it is coupled with a thermal storage system, power can be provided aroundthe-clock. In other words, continuous on-demand power can be made available. In addition, by absorbing the entire energy that would have been wasted away as heat, the device can prevent damage of solar-concentrating systems that is sometimes caused by

68 ● Renewable Watch ● September 2017

UP AND COMING

excessive heat generation. This was confirmed by running tests in which a PV cell with STPV components was used first under direct sunlight and then with the sun completely blocked such that the cell was illuminated only by the secondary light emissions from the photonic crystal. The results proved that the actual performance matched the theoretical predictions. The researchers state that the next step would be to find methods to make larger versions of the small, laboratoryscale experimental unit as well as developing ways to commercially manufacture these systems. The initial tests were done on a 1 cm chip, but follow-up tests will be done with a 10 cm chip. Moreover, it would be important to make this technology economically feasible and cost effective for its widespread use and uptake. In conclusion, this innovation has paved the way to practically utilise the entire spectrum of sunlight for electricity generation, which cannot be currently done through any type of conventional solar cells. Moreover, the technology can be easily implemented as it retains the use of a PV cell with only an addition of a nanophotonic crystal layer. When it reaches commercial operation, it can be extremely beneficial for nations like India, which face scarcity of land acquisition. As the country receives high solar irradiation throughout the year, solar energy is one of the most viable forms of renewable energy available for electricity generation. In addition, the technology could solve the grid integration issues of solar PV that are caused by sudden cloud covers, making solar energy more reliable and less variable.

Solar Squared A growing focus on energy efficiency has put pressure on researchers and market players to incorporate energy-efficient technology into the existing and new infrastructure. Passive design features that maximise energy efficiency can be added to on-site renewable energy generators in order to reduce infrastructural energy needs. Several technological advancements are taking place as the world moves towards self-sufficient, zero-energy-consuming spaces. For example, researchers at the University of Exeter, UK, aim to create buildings with innovative glass blocks to enable them to generate their own power. They are developing a pioneering technique that could accelerate the widespread implementation of building integrated photovoltaics (BIPV) net-zero-energy buildings. The blocks, called Solar Squared, are designed to fit seamlessly into new buildings as well as old. They are similar to the

existing glass blocks designed by Tesla, allowing daylight to concentrate around a property by replacing traditional bricks and mortar with transparent glass bricks. Solar Squared blocks have intelligent optics that focus the incoming solar radiation on to small solar cells when placed vertically, thus enhancing the overall efficiency of solar cells. The blocks can then be linked and wired to one another to generate electricity, which will then be available to power the building, be stored in batteries and charge electric vehicles. As reported by research agencies, buildings consume more than 40 per cent of the electricity produced across the globe. If integrated seamlessly into the building, this new technology will allow electricity to be produced at the site of use. In addition, these blocks reportedly have better thermal insulation than traditional building materials. Thermal insulation reduces the heat transfer, thus saving the fuel or energy needed to heat up the building or to keep it at a particular temperature. The Exeter team is led by Hasan Baig, a research fellow at the university’s Environment and Sustainability Institute. The team has created a start-up company Build Solar to market and produce the pioneering product. The founder Hasan is of the opinion that BIPV as an industry is growing at 16 per cent per annum, and setting up a company that can cater to this growing market will prove beneficial for the country’s economy in the long term. The patent-pending technology is at the prototype stage, and the team is in the process of fine-tuning its designs in order to test the technology at various pilot commercial spaces. The product is expected to be launched in the market in 2018. ■

September 2017 ● Renewable Watch ● 69

WORLD VIEW

Clean Energy Transition New Zealand’s renewable generation and grid integration plans

ew Zealand is emerging as a global leader in the renewable energy sector. The country has ambitious goals and robust policies in place to increase the share of renewable energy in its energy mix to 90 per cent by 2025. It has also set an example for other countries with regard to renewable energy integration and is well on track both technologically and financially to achieve its energy transition targets. The rise of the digital economy has increased competition in the electricity sector, thus driving technological innovations. To further increase its renewable energy generation, New Zealand needs to establish a flexible grid, and develop energy storage and backup generation solutions, particularly for dry years, when hydropower generation reduces significantly. Going forward, investments in the country’s transmission network will be driven by the need to renew and redeploy transmission assets for efficient renewable integration.

Power sector outlook The country has a competitive electricity market. Currently, there are over 200 power stations in New Zealand and five large generation companies producing the majority of electricity. The country had an installed capacity of over 9,600 MW as of end-2015, of which over 57 per cent was contributed by hydro sources, 19 per cent by thermal, 18 per cent by renewable energy and the remaining 6 per cent by other sources such as cogeneration plants. The country’s renewable segment mainly comprises geothermal and wind energy. The national transmission grid is owned and operated by Transpower, a state70 ● Renewable Watch ● September 2017

Generation focus

owned enterprise. Transpower is responsible for new grid investments and all transmission development processes such as obtaining approval, arranging access and undertaking construction (subject to review and approval of the investment proposals by the Commerce Commission). The country’s two main islands, the North Island and the South Island, have their own power grids, which are interconnected via a high voltage direct current (HVDC) undersea cable. New Zealand has over 11,646 km of transmission lines, of which over 50 per cent are at the 220 kV level and over 40 per cent are at the 110 kV level. Transpower also owns 569 km of 350 kV HVDC overhead lines and 40 km of submarine cables, and over 700 km of transmission line infrastructure at the 66 kV and 50 kV levels. It has about 180 substations between the 66 kV and 220 kV levels.

As of end-2015, renewable energy resources accounted for around 80 per cent of New Zealand’s total electricity generation output. The government’s renewable energy strategy aims to increase the share to 90 per cent by 2025. During 2016, renewable generation increased largely due to favourable hydrological conditions, grid and generation investments and the decommissioning of the Southdown and Otahuhu thermal plants at the end of 2015. According to Transpower’s Annual Planning Report 2015 (Mixed Renewables Scenario), about 583 MW of new capacity is expected to be connected to the grid between 2016 and 2020. Another 923 MW is likely to be developed over the following five-year period. Some of the major planned projects are the Tauhara geothermal project Stage II (200 MW), the Turitea wind project (183 MW), the Wairau hydro project (70 MW), the Hawke’s Bay wind farm (65 MW) and Todd Energy’s gas plant (100 MW).

The Electricity Authority has entered into a service provider contract with Transpower to ensure effective grid management. As a system operator, Transpower is also responsible for the real-time operation of the electricity system.

Transmission focus Going forward, New Zealand will focus on strengthening and upgrading the existing

Expected generation capacity addition (MW) 475

298 250 210 140 98 35 0 2017

2018

2019

0 2020

2021

2022

2023

2024

Note: The data is based on the mixed renewables scenario in Transpower’s Annual Planning Report 2015 Sources: Transpower’s Annual Planning Report 2015; Global Transmission Research

2025

WORLD VIEW grid network, which involves the replacement and reconductoring of the transmission system. According to Transpower’s 2015 Integrated Transmission Plan, the utility forecasts around NZD 1.47 billion of capex requirement for the 2016-20 period. One of the key projects being implemented by the company is the Bunnythorpe-Haywards reconductoring project, which involves the upgradation of transmission lines between the Bunnythorpe substation near Palmerston North and the Haywards substation in Hutt Valley. Under the project, Transpower plans to replace the existing conductors with zebra aluminium conductor steel reinforced (ACSR) conductors rated to operate at 75 °C, and wires on the two transmission lines between the Bunnythorpe and Haywards substations in order to increase the capacity of each line by about 12 per cent. The project is expected to entail an investment of up to NZD 161 million, which is likely to increase consumers’ bills by an average of 0.041 cents per unit. The project is likely to be completed by 2020.

Key planned transmission projects in New Zealand Project

Voltage (kV)

Scheduled commissioning

110/33

2018

Lower South Island Grid Reliability

220

2019

Bunnythorpe-Haywards A and B reconductoring

220

2020

Oteranga Bay-Haywards A reconductoring (Churton Park section)

350

2020

Bunnythorpe-Wilton (Judgeford to Wilton) reconductoring

220

2021

Brunswick-Stratford B reconductoring

220

2023

Central Park-Wilton B reconductoring

Source: Transpower

of conductors on the Churton Park section of the Oteranga Bay-Haywards A line. This line forms a part of the HVDC link between Benmore in the South Island and Haywards in the North Island. The project is scheduled to be completed by 2020. Some of the other key projects to be undertaken are the 110/33 kV Central ParkWilton B, the 220 kV Bunnythorpe-Wilton (Judgeford to Wilton) and the 220 kV Brunswick-Stratford B reconductoring projects, all of which are scheduled to be commissioned by 2020-23.

Smart grid Another major project being implemented by the company is the Lower South Island Grid Reliability project, being built at a cost of NZD 62.4 million. Under the project, Transpower plans to connect the Gore substation to the existing 220 kV North Makarewa-Three Mile Hill line; install a new 220/110 kV transformer at the Gore substation; replace transformers at Invercargill and Roxburgh; install a series capacitor on one circuit of the North Makarewa-Three Mile Hill line to improve balance power flows into Southland; and install special protection systems on the 220 kV and 110 kV networks. The project will help reinforce the regional network in the Southland area during dry periods. The project will help improve power supply to around 95,000 people in Southland. Another major project being implemented is the 350 kV Oteranga Bay-Haywards A reconductoring (Churton Park section) project, at a cost of NZD 28 million. The scope of work includes the replacement

Green Grid programme to explore future trends in renewable electricity generation and household demand, and develop indepth knowledge of electricity networks and power management. The programme aims to ensure reliable, safe and affordable renewable energy access in New Zealand. It entails engaging with a wide range of end users, across the industry and the government, to ensure that changes to the network and new management practices are applied uniformly. The programme being undertaken by the University of Otago team, led by the Centre for Sustainability, focuses on exploring consumer demand for new technologies such as solar photovoltaic, electric vehicles (EVs) and smart appliances, as well as current patterns of demand and opportunities for demandside management. The country has seen a rapid increase in the uptake of EVs, from around 1,000 as of end-2015 to around 2,500 at the end of 2016.

The concept of intelligent electricity grids, involving the integration of new information and communication technologies with power transmission lines and distribution cables, is being actively explored by the New Zealand government. To meet its target of achieving 90 per cent renewable energy electricity generation by 2025, the government has identified technical standards to facilitate the development of a smart grid in the country. As per a report by the US-based consultancy Northeast Group, Australia and New Zealand are together expected to invest $ 6.1 billion in smart grid infrastructure between 2017 and 2027.

Conclusion

Going forward, New Zealand is planning to develop and expand projects such as smart metering, battery energy storage, advanced sensors and grid communications systems. Although progress on this front has been slow, the government is taking suitable measures to equip its grid with new technologies. It is also working on the

New Zealand’s electricity sector continues to focus on investments in renewable energy and upgradation of the transmission grid. The country’s renewable energy generation is in line with its goals. Timely realisation of these ambitious targets will further strengthen the country’s position as a global leader in the renewable energy market. ■

The country has set ambitious goals to cut its greenhouse gas emissions to 30 per cent below the 2005 levels by 2030, and has introduced strong policies to increase the number of EVs.

September 2017 ● Renewable Watch ● 71

PROJECT WATCH

Progress Update Plants of 1 MW and above capacity Project developer/Nodal agency

Location

Solar NTPC

Simhadri, Andhra Pradesh

NTPC

NTPC premises, Ramagundam, Telangana

Indian Oil Corporation Limited

Digboi refinery, Assam

Indian Oil Corporation Limited

Indian Oil LPG bottling plant in Madanpur Khadar, Delhi

Indian Oil Corporation Limited

Paradip refinery, Odisha

Military Engineering Services

Ambala, Haryana

Military Engineering Services

Mhow, Madhya Pradesh

New and Renewable Energy Development Corporation of Andhra Pradesh

Pathapadu village, Vijayawada, Andhra Pradesh

Greater Visakhapatnam Smart City Corporation Limited

Raiwada canal, Visakhapatnam, Andhra Pradesh

Greater Visakhapatnam Smart City Corporation Limited

Mudasarlova reservoir, Visakhapatnam, Andhra Pradesh

Railway Energy Management Company Limited

Indian Railways premises across India

Maharashtra State Power Generation Company

Satara, Maharashtra

Maharashtra State Electricity Generation Company

Maharashtra

Bosch

New Mangalore Port Trust, Mangaluru

SME Technology Services Limited

Jawahar Navodaya Vidyalayas across India

ACME Cleantech Solutions

Adilabad, Telangana

ACME Cleantech Solutions

Medak, Telangana

Wind Inox Wind

72 â&#x2014;? Renewable Watch â&#x2014;? September 2017

Kutch, Gujarat

PROJECT WATCH

Progress Update Plants of 1 MW and above capacity Capacity (MW)

Project status

20.00

Bids invited

–

15.00

Bids invited

–

1.00

Bids invited

–

2.00

Bids invited

–

7.50

Bids invited

–

1.00

Bids invited

–

5.00

Bids invited

–

1.00

Bids invited

–

5.00

Bids invited

–

2.00

Results awaited

–

67.38

Project allocated

–

60.00

Bids invited

–

50.00

Bids invited

–

4.00

Commissioned

Expected/Actual date of completion

August 2017

18.78

Bids invited

50.00

Commissioned

September 2017

50.00

Commissioned

September 2017

100.00

–

September 2017 ● Renewable Watch ● 73

PHOTOGALLERY

Sector Snapshots

Piyush Goyal, M inister o Raj Kum f Railwa ar Sing ys and h, the n Coal (le Charge) e w Ministe ft), gree for Pow r of Sta ts er and te (Inde New an penden d R enew t able En ergy

Nitin Ga dkari, M Shippin inister o g and W f R oad ater Re Transpo Rejuven sources rt and H ation (s , River ighways econd fr last-mil Develop , om righ e conne ment an t), flags ctivity, d Ganga at Huda off the e-ricksh City Cen aws for tre metr o statio n, Gurg aon

74 â&#x2014;? Renewable Watch â&#x2014;? September 2017

s the Swis ident of s in re , P g , n ti Leuthard elegation mee h Doris iness d s oyal wit u G b h a s t u . Piy ight), a lhi ration (r New De Confede

inha, umant S Delhi; S T er; II w , o P ta h R eNew R aj Me (CEO), ment; r Bodh r p o e s lo ic s e ff v fe O e D ft) Pro ecutive esource (From le Chief Ex i, at the uman R an and IIT Delh ter of H r, is to in c e Chairm M ir ce for r, D a , k o ll e a e d c R x en Java agopal lhi tre of E m n a e R C Prakash . II V w e h T De fessor ha R eN tion wit in ra S o t b n and Pro a a ll um up in co of the S ent, set launch nvironm E d n a Energy

PHOTOGALLERY

Anand K umar, S ecretary , Ministr delivers y of Ne the key w and R note ad enewab dress a “Wind P le Energ t R enew ower in y, able Wa India” c tch’s onferen ce

r, Directo anaging M t the , a in s a k a Nath Sw dia, spe ra In d f n o ti n a o J e orporati nferenc nergy C dia” co Solar E er in In w o P d “Win

(From le ft) Sudh R enewa ir Nune ble; Ma s, CEO, hesh Pa Wind B usiness lashika Sanjay , Orang r, CEO, Nagrare e GE R en , Head, Comme ew rcial, S Busines embcorp s Develo able Energy; Chief M pment a Green In arketing nd fra; and Officer, R amaku Kshema “Wind P mar P., ower in Power, at the India” c onferen ce

s Busines t, Solar n e t id n s e d Vice-Pre rapu, Indepen s, a xecutive Budhav Busines Sajay, E . h .V k K e ) js ar ffshore ft a O le R t, ; n m a e s e ro (F ame , Presid nferenc mens G dia” co N. Shah Unit, Sie wer in In Bimlesh o d P n d a in t; W an at the “ Consult Energy, Suzlon

September 2017 ● Renewable Watch ● 75

PEOPLE

avindra Kumar Verma, chairman, Central Electricity Authority (CEA), has industry experience of over 38 years. He began his career as a power system planner with the CEA in 1981, later moving to grid operations where, in 1987, he designed and operated a system in the load despatch centre at the Northern Regional Electricity Board. For the next 14 years, he was involved in managing supply to the entire northern India. It was a challenging assignment that forced him to find new reserves of stamina and discipline. Huge shortages meant that he and his team were firefighting all the time. He used to spend consecutive nights in the control room and worked in shifts for 10 years. Then, for the next four years, he worked as executive engineer, operations, and again had to work like a machine. He rose up the ranks and worked in distribution for a while. Distribution, Verma notes, is a very important segment because it has direct interface with the consumer and, since it collects revenue from the consumer, it drives the entire power sector. Unfortunately, distribution had been neglected for a long time. In 2001, Verma became director, in 2014 chief engineer and then in 2016, principal chief engineer, a member as well as chairman. His work spans a large range. He led the inter-ministerial central team constituted with the states for preparing state-specific documents for providing 24x7 power for all. He is chairman of the technical committee of the National Smart Grid Mission set

Kenichi Yokoyama Country Director, Asian Development Bank

s country director of the Asian Development Bank (ADB), Kenichi Yokoyama heads ADB’s Indian Resident Mission, where he is responsible for the overall country assistance strategy, the identification of new projects, and sovereign lending and technical assistance operations. Starting his career with the Japanese government in 1983, as a water resources engineer, Yokoyama shifted to ADB in 1999 after working as a development attaché in the Embassy of Japan in Dhaka for three years. At ADB, he worked as a project engineer until 2012 when he became country director for Nepal. His five years there were his most memorable, in view of the number of challenges encountered, such as major earthquakes in 2015 and a difficult implementation environment related to capacity constraints and political interference. With regard to the current state of infrastructure in the country, Yokoyama says, “The gross fixed capital formation has declined over the past five years, from 34 per cent to 27 per cent 76 ● Renewable Watch ● September 2017

Ravindra Kumar Verma Chairman, Central Electricity Authority

up to evaluate detailed project reports and finalise benchmark costs. Verma has also been instrumental in finalising the functional requirements of advanced metering infrastructure, including the technical specifications of single-phase and three-phase whole current smart meters. Alongside all this very high-level work, he is equally concerned about providing connections to the last villages that are still languishing in darkness. Verma graduated as an electrical engineer from the Delhi College of Engineering, following which he passed the Combined Engineering Services Examination conducted by UPSC for the prestigious Central Power Engineering Services in 1979. On the personal front, Verma says that he likes to spend time with his family, which comprises his wife and their sons, who are both engineers. He enjoys watching movies and walking, when time permits. He calls himself a firm believer in God and says his belief that it is God, not us, who is doing everything, is growing stronger by the day. ■

of GDP. This needs to be reversed for India to transform more rapidly with faster job creation. For this, cities need to be rejuvenated through long-term planning, and reforms in land use and building restrictions. Public and private investments in infrastructure are also urgently needed. The manufacturing sector needs to be linked to global value chains through the creation of economic corridors and the Make in India initiative. We want to build a strong project line-up to bring $3 billion-$4 billion of investments annually.” Yokoyama believes that his strength lies in working long hours and taking up challenges that require perseverance. With an analytic bent, he has a systematic approach and works with his team to produce results. A civil engineer from a Japanese university, he has a master’s in agricultural economics from Stanford University. His family, comprising his wife and two daughters, lives in Japan and he visits them once in two months. In his spare time, he enjoys exercising, listening to classical and popular music, and reading articles on diverse subjects. A nature admirer, Yokoyama prefers quiet beaches, deserts and mountains. He is also keen to visit places of cultural heritage such as ancient temples and artistic buildings. On his personal goals, Yokoyama says, “It would be good to write about the dramatic experiences I have had in the developing world, and the places I have visited with my family and friends.” ■

PEOPLE

Siddharth Malik Founder and Managing Director, Megawatt Solutions Private Limited

iddharth Malik is founder and managing director of Megawatt Solutions Private Limited, a company that leverages various clean energy technologies to provide economical solutions to help reduce fuel costs and carbon emissions. Malik is responsible for the overall management of the firm and represents the industry on various government committees and industrial platforms. In the past, he has worked with multiple companies in the energy sector such as Kinsale Energy LLC as an adviser in its energy procurement services group; and as a corporate strategist and business developer at US-based Quadlogic Controls Corporation, in the field of metering and smart grid infrastructure solutions. He also served as manager at Con Edison, New York, after completing his degree in engineering and management at the University of Pennsylvania. Commenting on the country’s renewable energy sector, Malik says, “India as a nation is at a crossroads and has carved

he vast potential of the Indian solar market brought Kanika Khanna back to India from the US where she studied and worked for five years. In February 2012, she founded SunKalp Energy to provide data-propelled engineering, procurement and construction services along with after-sales support for rooftop solar power plants. She was instrumental in developing the company’s solar rooftop digital application, SunKalp Partner app. The app, which was launched in 2013, provides customers with facilities like instant quotes with detailed cash flows for rooftop projects ranging from 1 kW to 500 kW as well as break-even analysis for different scenarios of tariffs, debt, generation and other variables. Khanna, who is chief technology officer and director of SunKalp Energy, notes that rooftop capacity plays a major role in the renewable energy development of any country. In India, she believes that rooftop solar technology will grow to about twice its current market size over the next few years. Khanna’s vision and passion stem from her strong educational background and work experience. A graduate from the Massachusetts Institute of Technology with a specialisation in manufacturing engineering, she also studied production and industrial engineering at the Delhi College of Engineering. After completing her master’s, Khanna joined Cummins, where she worked as a quality engineer and subsequently as a system integration engineer, leading the manufacturing, product design and testing teams for various projects. One of Khanna’s most memorable assignments was the

out its own strategy to enable sustainable renewable energy growth, economically and climate-wise.” According to him, no country today matches India’s activity in the renewable energy sector. He calls this an “action-packed” energy landscape with new discoveries being made across all energy options – nuclear, solar, wind, biomass, hydro, etc. It is leading by example for the world to follow. Looking back, Malik says his most memorable assignment was his stint with Con Edison, a utility service provider for electricity, water, steam, gas, etc., in New York City. It gave him a deep understanding about underground stations and the challenges in supplying uninterrupted energy to the city of New York. The utility also offered a highly diverse environment, with people from all walks of life, which was a great learning experience for Malik. He defines his managerial style as affinitive and participative. His biggest strength lies in his ability to simplify the most complicated tasks and align diverse interests to accomplish the task at hand. Outside of work, he likes to spend his time reading about new developments in science, playing the guitar and tennis, and going on long nature walks. His wife Rishika is a lawyer specialising in nuclear law, a sculptor and a “great mother” to their three-year-old daughter, who is a powerhouse of energy and a born musician. ■

Kanika Khanna Chief Technology Officer and Director, SunKalp Energy

deployment of a solar power plant on the rooftop of an open-air cafe. The project required extensive structural innovation and design engineering, and was executed by installing the plant on a transparent roof. This allowed natural light to come into the cafe while also helping avoid the production of greenhouse gases. Khanna has a fairly inclusive management style, with the employees being involved in decision-making, thereby encouraging them to contribute directly to the company’s success. She feels it is important to identify the strengths of each employee and considers herself adept in placing the right talent in the right job. One of the few women in the industry, Khanna does not let gender disparity come in the way of achieving company goals. She believes that vision, passion and experience are important ingredients for success. A keen trekker, she takes 15-day treks to the mountains once a year to unplug and unwind. Khanna’s parents are involved in the family business, while her brother is studying mechanical engineering from New York University. ■ September 2017 ● Renewable Watch ● 77

DATA AND STATISTIC S

Solar Growth State-wise capacity addition Annual increase in capacity (MW) State

2014-15

2015-16

2016-17

Andhra Pradesh

126.77

435.11

1,294.03

Cumulative capacity till June 2017 2,010.87

Arunachal Pradesh

0.00

0.24

0.01

0.27

Bihar

0.00

5.10

103.42

111.52

Chhattisgarh

0.50

85.98

35.28

128.86

Gujarat

83.65

119.12

130.20

1,262.10

Haryana

2.50

2.59

66.01

81.40

Jharkhand

0.00

0.19

7.08

23.27

Karnataka

46.22

68.24

882.38

1,180.38

0.00

13.02

61.16

74.20

205.00

217.79

80.67

857.04

82.23

25.01

66.61

452.36

Odisha

2.26

35.16

12.50

79.42

Punjab

168.75

219.79

388.89

809.45

Rajasthan

228.85

327.83

543.00

1,961.21

Tamil Nadu

54.12

919.24

630.01

1,697.32

Telangana

61.25

360.80

759.14

1,609.27

5.00

0.00

0.09

5.09

Uttar Pradesh

42.16

72.24

193.24

359.00

Uttarakhand

0.00

36.15

192.35

233.48

West Bengal

0.00

0.56

18.37

26.14

Kerala Madhya Pradesh Maharashtra

Tripura

Andaman & Nicobar Islands

0.00

1.46

6.56

Delhi

0.32

8.82

25.99

40.27

Lakshadweep

0.00

0.75

Puducherry

0.00

0.06

0.08

Chandigarh

2.50

2.31

10.51

17.32

Dadra & Nagar Haveli

0.00

2.97

Goa

0.00

0.71

Manipur

0.00

0.03

Meghalaya

0.00

0.01

Nagaland

0.00

0.50

Daman & Diu

0.00

4.00

6.46

10.46

Jammu & Kashmir

0.00

1.00

0.36

1.36

Himachal Pradesh

0.00

0.20

0.53

0.73

Mizoram

0.00

0.10

0.00

0.10

Assam

0.00

11.78

Other data from rooftop division (cumulative)

0.00

58.31

0.00

58.31

1,112.10

3,018.88

5,525.79

13,114.59

Total Source: Ministry of New and Renewable Energy

78 â&#x2014;? Renewable Watch â&#x2014;? September 2017

DATA AND STATISTIC S

Solar Cities Progress State-wise funds allocated and released under the programme Cumulative disbursement and funds sanctioned up to July 24, 2017 State/Union teritorry

No. of cities

Funds sanctioned (Rs million)

Funds released (Rs million)

Andhra Pradesh

346

165

Assam

Arunachal Pradesh

Bihar

Chandigarh

999

882

Chhattisgarh

340

Gujarat

1,341

Goa

Haryana

346

Himachal Pradesh

340

179

Karnataka

1,036

Kerala

Maharashtra

1,741

335

Madhya Pradesh

148

Manipur

Mizoram

299

253

Nagaland

Delhi

Odisha

997

Punjab

390

Rajasthan

Tamil Nadu

299

Telangana

Tripura

296

137

Uttarakhand

137

Uttar Pradesh

149

West Bengal

150

Jammu & Kashmir

Puducherry

299

10,174

2,507

Total

September 2017 â&#x2014;? Renewable Watch â&#x2014;? 79

DATA AND STATISTIC S

REC Trading on IEX and PXIL Growth between August 2016 and August 2017 Trading summary Particulars

IEX

PXIL

August 2016

August 2017

August 2016

August 2017

Solar

Non-solar

Solar

Non-solar

Solar

Non-solar

Solar

Non-solar

Buy bids (no.)

21,937

136,352

–

81,545

18,041

122,539

–

207,960

Sell bids (no.)

2,192,565

7,336,837

–

7,742,478

1,290,791

5,407,315

–

4,189,386

21,937

136,352

–

81,545

18,041

122,539

–

207,960

3,500

1,500

–

1,500

3,500

1,500

–

1,500

Cleared volume (no.) Cleared price (as per REC)

Category-wise participation (no.) Participant category

IEX

PXIL

August 2016

Participants

Cleared volume

Participants

Cleared volume

Participants

Cleared volume

30,240

26,000

291

70,176

148

36,158

35,936

19,387

1,000

60,000 1,500

40,000

1,000

20,000

500 0

February 2017

March 2017

April 2017

May 2017

June 2017

July 2017

August 2017

1500

1,500

1500

1,000

600,000 500,000

800 400,000 600

300,000

400

200,000

200

100,000 0

February 2017

March 2017

April 2017

May 2017

June 2017

July 2017

August 2017

IEX market clearing price

PXIL market clearing price

IEX market clearing price

PXIL market clearing price

IEX cleared volume

PXIL cleared volume

IEX cleared volume

PXIL cleared volume

Sources: Indian Energy Exchange; Power Exchange India Limited

80 ● Renewable Watch ● September 2017

Cleared volume (no.)

80,000 2,000

700,000

1,200

1000

100,000

2,500

900,000 800,000

1,400 1,000

3,000

Market clearing price (Rs per REC)

120,000

1,500

3,500

1,600

Cleared volume (no.)

Market clearing price (Rs per REC)

140,000

1,500

Price and volume trends (non-solar)

Price and volume trends (solar)

1500

Voluntary buyers

4,000

August 2017

Cleared volume

1,500

Captive consumers

August 2016

Participants

Discoms Open access

August 2017

PRODUCT RELEASE

Products in the Market iPLON launches fuel save controller

iPLON has launched a photovoltaic (PV)diesel generator (DG) hybrid fuel save controller. The controller acts as an interface connecting the DG, the PV system and the load, thereby managing the need-based PV feed-in power according to the load and generation profiles of the system. Although iPLON’s fuel save controller is ideal for a plant with one DG set, it can be extended to include over 10 DG sets. The key features of the system are: z Maximised solar output and minimised DG output z Inverter output control z Protection of reverse power current z Active-reactive power control and power factor correction z Site-specific customisation z Fully automated system operation z Remote maintenance and system management through iPLON cloud services z Scalable system ranging from kW-to MW-scale installations. Currently, the solution has been deployed across multiple sites in India by companies like SMA Solar Technology, Danfoss Industries Private Limited, Kaco New Energy, Sungrow and Huawei. Parker Hannifin launches two cloud-based sensor solutions Parker Hannifin has launched two cloudbased sensor solutions – SCOUT™ Cloud Software and SensoNODE™ Gold Sensors. The software provides a

wireless, remote monitoring solution for preventive maintenance of solar panels. The solar panels attached to the tracker have an expected load that should be supported at all times. A change in this supported load can sometimes indicate structural damage that needs to be addressed before the scheduled visit of field technicians. SCOUT Cloud Software and SensoNODE Gold Sensors monitor and transmit the pressure levels of the trackers, letting asset managers identify individual panels that may need service. In a normal scenario, workers need to visit each field to inspect the solar arrays for damage and degeneration. The cloud-based solution can quickly and easily monitor several fields of arrays from an internet-enabled desktop allowing them to access asset condition from any place. The solution also allows them to receive notifications via email, text or in-messaging, record readings and observe trend changes. Apart from structural damage, it keeps a record of the hydraulic load readings. A consistent increase in the readings indicates wear and tear of the tracker due to failing pump, motor or other system issues. Thus, the overall cloud-based system can play a significant role in preventive as well as corrective maintenance of solar systems.

APsystems launches the YC600 microinverter APsystems has launched YC600, a dual-module, utility-interactive microinverter with reactive power control (RPC) technology and Rule 21 grid support functionality at Solar Power International in Las Vegas, USA. The YC600 is designed to accommodate high output PV panels, offering enhanced capability and meeting the latest grid compliance standards. These include Underwriters Laboratories 1741 Supplement A requirements for California Rule 21, voltage and frequency ride through, and RPC for European and Australian Department of Environment regulation requirements. Offering 300 VA peak output power per channel, the YC600 microinverter works with 60-and 72-cell PV modules and offers dual, independent maximum power point tracking (MPPT) per panel. The unit can operate within a wider MPPT voltage range, leading to a greater energy harvest for homeowners. The YC600 is built on the successful APsystems’ line of multi-module microinverters, simplifying installation and reducing logistics costs. The unit features both integrated ground and direct current connectors for fast, trouble-free installation. It also maintains inherent compliance with the National Electric Code 690.12 for rapid shutdowns. In addition, an integrated ZigBee antenna offers broadband communication over a mesh network for fast and accurate data monitoring. All these put together offer a number of new and advanced features and functions over competing products in the market. The product is available in Australia and Asia-Pacific, and will be available in the US and the Europe, Middle East and Africa region in the last quarter of 2017. ■

September 2017 ● Renewable Watch ● 81

EVENT WATCH

Upcoming Events

Power Line Summit 2017 October 10, 2017 New Delhi, India

Renewable Energy India Expo

4th Conference EUAnnual PVSEC 2017 on

September 20-22, 2017 New Delhi, India

Amsterdam,2013 Netherlands March-April Mumbai, India

Smart Cities in India

Transmission Lines, Towers and Substations

October 26-27, 2017 New Delhi, India

Windaba 2017 and WindAc Africa

WindEurope Conference and Exhibition 2017

November 14-16, 2017 Cape Town, South Africa

November 28-30, 2017 Amsterdam, Netherlands

Global RE-INVEST 2017

Energy Storage and Microgrids in India

December 7-9, 2017 Greater Noida, India

82 â&#x2014;? Renewable Watch â&#x2014;? September 2017

January 11-12, 2018 New Delhi, India

Wind Power in India September 25-29, 2017

October 30-31, 2017 New Delhi, India

Intersolar India 2017 December 5-7, 2017 Mumbai, India

Solar India 2018 Expo May 23-25, 2018 New Delhi, India