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Report
“SOLAR THERMAL INDUSTRY IN INDIA
– DEVELOPER’S PERSPECTIVE”
J.P.TIWARI
Chief Executive Officer
GODAWARI GREEN ENERGY LIMITED
GODAWARI GREEN ENERGY LTD.
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JAWAHARLAL NEHRU NATIONAL SOLAR MISSION (JNNSM)
“the next new stimulant for the Indian power sector”
• One of the eight National Missions laid out in India’s National
Action Plan on Climate Change (NAPCC) that has raised large
business opportunities in the country .
• Aims to incentivize the installation of 22,000 MW of on- and
off-grid solar power using both PV and CSP technologies by
2022 as well as a large number of other solar applications such
as solar lighting, heating, and water pumps.
• ‘Renewable Purchase Obligation (RPO)’ and tradable
‘Renewable Energy Certificates (REC)’ to facilitate inter-state
trade so that RPOs can be met.
• To aid the development of the solar industry, solar-specific
RPOs and RECs have also been instituted.
GODAWARI GREEN ENERGY LTD.
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JAWAHARLAL NEHRU NATIONAL SOLAR MISSION (JNNSM)
“the next new stimulant for Indian power industry”
• Mission Targets
S.NO.
SEGMENT
PHASE-I TARGET
(2010 – 2013)
PHASE-II TARGET
(2013-2017)
PHASE-III TARGET
(2017-22)
1.
Utility Grid Power including
roof top
1000 – 2000 MW
4000 – 10000MW
20000 MW
2.
Off grid solar applications
200 MW
1000 MW
2000 MW
3.
Solar Collectors
7 million m2
15 million m2
20 million m2
• Projects under the Mission have been awarded on preferential
feed-in-tariffs determined through a reverse bidding
mechanism wherein, discount bids have been invited on CERC
determined benchmark tariffs through the trading arm of
India’s largest power producer NTPC- NTPC vidyut Vitaran
Nigam Ltd (NVVN).
GODAWARI GREEN ENERGY LTD.
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GODAWARI GREEN ENERGY LTD.
DEVELOPER OF 50 MW CSP PROJECT UNDER JNNSM PHASE-I
Godawari Green Energy Limited (GGEL) is a flagship company of
HIRA group of Industries in the renewable energy sector based at
Raipur, Chhattisgarh, India.
Successfully bid as one of the seven developers under Phase I of
the National Solar Mission for a 50MW solar thermal plant with
an aim to be the first to execute and commission the project.
The project is being implemented at the Naukh village,
Jaisalmer district in Rajasthan (72.16ON, 27.60OE) and has signed a
Power Purchase Agreement with NTPC Vidyut Vyapar Nigam
(NVVN).
GODAWARI GREEN ENERGY LTD.
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INTRODUCTION –
DEVELOPER OF 50 MW CSP
PROJECT UNDER JNNSM PHASE-I
UNDERLYING THEME OF GGEL’S MISSION STATEMENT :
“COMMIT OURSELVES TO IMPROVING THE
QUALITY OF LIFE OF COMMUNITIES WE
INFLUENCE, BY STRIKING A BALANCE BETWEEN
PROFIT, PEOPLE & PLANET”.
GODAWARI GREEN ENERGY LTD.
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WHY SOLAR ENERGY ?
Growing
Dependency on
electricity
Changing
environmental
conditions due to
conventional
industrial activities
Holistic
approach
towards
sustainable
energy security.
Depleting fossil fuel with
increasing Demand for
power with development
Infinite availability
of Solar energy &
ability of direct
exploitation
GODAWARI GREEN ENERGY LTD.
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WHY SOLAR THERMAL TECHNOLOGY FOR
GENERATION OF POWER ?
Several advantages over solar-photovoltaic projects.
Typically built on a much larger scale, and historically their costs have
been much lower. New technologies being tested have strong potential
to make up the gap created by lowering cost of thin films PV.
Able to generate more units per square km of the land area as
compared to PV.
Best able to match a utility's electrical load due to size and stability.
Works best when it is hottest and demand is greatest.
The heat they generate can be stored, so the output of a solar-thermal
plant does not fluctuate as wildly as that of a photovoltaic system.
Moreover, since they use a turbine to generate electricity from heat,
most solar-thermal plants can be easily and inexpensively Supplemented
with natural-gas boilers, enabling them to perform as reliably as a fossilfuel power plant.
GODAWARI GREEN ENERGY LTD.
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50 MW GGEL CSP PROJECT HIGHLIGHTS
LOCATION :
Village Naukh, District Jaisalmer, Rajasthan
CAPACITY :
50 MW with out Storage
TECHNOLOGY :
Parabolic Trough license SBP – Germany
DATE OF PPA :
10th January 2011
COD AS PER PPA :
9th May 2013
FINANCING :
Completed on 7th July 2011
PROJECT COST :
7900 Million INR
PRIMARY LENDER:
Bank Of Baroda
LENDING TERMS:
70% Debt, 30% from own resources
EPC CONTRACTOR:
Lauren Engineers & Constructors
IMPORTED ITEMS:
Mirrors, Receiver Tubes, HTF, SG, STG - 45%
INDIGENOUS ITEMS:
Solar Frames, BOP, Piping, Civil, Build – 65%
GODAWARI GREEN ENERGY LTD. (only GGEL achieved this %)
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50 MW GGEL CSP PROJECT PROGRESS
Completed in 3 months on 24th May 2011
from Government of Rajasthan (400 Acres)
Water allotment, Transmission agreement,
Consent to Establish, ROW for Raw water
pipeline, Layout Approval from Government of
Rajasthan with in 6 months by 16th July 2011.
LAND AQUISITION:
CLEARANCES :
EPC CONTRACT :
Signed with Lauren on 20th August 2011
SITE PROGRESS :
(as on 31st October 2012)
a. 100% Engineering Completed
b. 95% Procurement Completed
c. 45% Construction Completed
d. 95% Civil work completed
e. 100% of HTF line erected
f. 60% of Solar frames received at site
g. 11% of Solar frames erected
h. Major Components like SG, mirrors, HCE
tubes on site & STG reaching port on 10th
November 2012.
COMMISIONING:
Expected With in the given time frame (9.05.13)
GODAWARI GREEN ENERGY LTD.
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50 MW GGEL CSP PROJECT PROGRESS
ERECECTION OF HEADER & BRANCH PIPING
GODAWARI GREEN ENERGY LTD.
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50 MW GGEL CSP PROJECT PROGRESS
SOLAR COLLECTOR ASSEMBLY BUILDING
GODAWARI GREEN ENERGY LTD.
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50 MW GGEL CSP PROJECT PROGRESS
ERECTION OF SOLAR COLLECTOR FRAMES
GODAWARI GREEN ENERGY LTD.
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50 MW GGEL CSP PROJECT PROGRESS
UNLOADING & ERECTION OF STEAM GENERATORS
GODAWARI GREEN ENERGY LTD.
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50 MW GGEL CSP PROJECT PROGRESS
STG Foundation Ready for Equipment Erection
GODAWARI GREEN ENERGY LTD.
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50 MW GGEL CSP PROJECT PROGRESS
RAW WATER POND & INTAKE WELL
GODAWARI GREEN ENERGY LTD.
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CHALLENGES FACED DURING PHASE – I EXECUTION
1.SOLAR RESOURCES
NON AVAILABILITY OF ACCURATE DATA
Predicted Annual Sum Of DNI
– 2000 TO 2100 Kwh/m2
Year 2011 Ground Measured DNI - 1750 TO 1900 Kwh/m2
QUALITY
• Peaking instead of Flat Curve like Spain & US for the Day.
• Large number of Bad Solar Days in the year with
unsteady & sudden DNI variations especially in summers
on account of sand storms in Rajasthan.
• This forces the design to keep larger solar multiple as
compared to Spanish & US plants and hence larger
mirror area and hence more cost
GODAWARI GREEN ENERGY LTD.
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CHALLENGES FACED DURING PHASE – I EXECUTION
500.00
DNI (Watts / m2)
India
DNI (Watts / m2)
Spain, US
1200.00
450.00
400.00
1000.00
350.00
300.00
800.00
250.00
600.00
200.00
150.00
400.00
100.00
200.00
50.00
0.00
0.00
0:000:000:000:000:000:000:000:000:000:000:000:00
GODAWARI GREEN ENERGY LTD.
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CHALLENGES FACED DURING PHASE – I EXECUTION
1. SOLAR RESOURCES
SOLUTION: Storage to take care of variations and to
store during the peak DNI hours and dispatch during
lean DNI hours.
But during phase-I, taking more exposure on account
of storage over & above the risks associated with the
New Technology in India being implemented for the
first time based upon uncertain Solar resources was
beyond the risk appetite of GGEL & its Lenders.
Also the Base load tariff plan of JNNSM doesn’t
incentivize the sale of stored power.
GODAWARI GREEN ENERGY LTD.
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CHALLENGES FACED DURING PHASE – I EXECUTION
2. FINANCING
•
The understanding of Solar Sector was less and hence
more time taken for project evaluation which increased
the risk associated with the time frame of completion.
• Non recourse funding was a challenge and investors
were forced to furnish corporate guarantee of their
existing companies.
• Intent of the Government and its policy was not
appreciated by the Lending Banks as they did not
consider CSP Projects viable. Many of them still harbor
this doubt. (Since there is no penalty on the purchaser
for their exit from the PPA)
GODAWARI GREEN ENERGY LTD.
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CHALLENGES FACED DURING PHASE – I EXECUTION
2. FINANCING
• Indeed the cost of the project estimated was put to
doubt owing to Non-Awareness of technology and
majority of the equipment being imported.
• The present project itself has seen a exchange rate
escalation of around 25%. Could have been appeased by
Foreign funding. (they require more time for diligence)
• Limited time frame in the policy to achieve closure post
signing of PPA did not allow developers to negotiate
good rates on debts from lenders.
• Paying capacity of State Discoms and payment security.
GODAWARI GREEN ENERGY LTD.
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CHALLENGES FACED DURING PHASE – I EXECUTION
3. POLICY & REGULATORY ISSUES
• Competitive bidding takes care of optimization of resources in
all the front and hence defining any limit on any of the
resources seems to be a bad idea. Because of the limitation
set on land area, high potential cost reducing technologies
are restricted. Say for example, Tower Technology
(Brightsource, Gemasolar ).
• Time limit set on Financial Closure needs to be relooked.
Time limit for project commissioning should also be based on
size of the project and factor number of actual working days
and availability of decision making officials in India.
• No incentives defined for Storage & adopting environmentally
benign technologies like Air Cooled Condenser.
GODAWARI GREEN ENERGY LTD.
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CHALLENGES FACED DURING PHASE – I EXECUTION
3. POLICY & REGULATORY ISSUES
•
Procedure to avail duty exemption is lengthy. Single window clearance of the
cases may solve this issue.
•
Excise duty exemption though available to the developer is not available to
the manufacturer on the raw material purchased by them and hence they
factor the burden in the cost which is transferred back to the developer with
a net zero benefit to the project.
•
No incentives for indigenous sourcing of items more than the limit prescribed
on account of high interest cost on local funding. With imports developers
have an option to get exim funds at lower interest rates.
•
No Incentives defined to motivate developers to commission the plant ahead
of schedule.
•
Clearance of permission to visit the site by foreign nationals require more
than 100 days, which is a big issue at the moment for completion of project in
time.
GODAWARI GREEN ENERGY LTD.
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CHALLENGES FACED DURING PHASE – I EXECUTION
SUPPLY CHAIN & SOURCING
•
Key CSP components like Bend mirrors for parabolic trough
was to be imported. Technologies like tower require straight
mirrors that can be easily manufactured in India
•
Monopolizing by HTF suppliers affected a number of
projects. We too had to pay 5.67 USD per kg instead of 4.0
USD being paid by Spanish developers.
•
SOLUTION : Adopt technologies that are less monopolistic.
GODAWARI GREEN ENERGY LTD.
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BENEFITS POST PHASE – I EXECUTION
• Developers having experience in phase-I will have an
added advantage.
• Awareness of challenges listed before.
• Established supply chain would prepare us better for
future projects and hence build more confidence
amongst lenders.
• Tax exemption issues shall be streamlined.
• Availability of Trained manpower to execute with more
efficiency in future projects.
GODAWARI GREEN ENERGY LTD.
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LOOK AHEAD FOR PHASE-II
• LENDERS TO DISPLAY GREATER CONFIDENCE &
WILLINGNESS FOR LEVEL PLAYING IN SOLAR
PROJECTS.
• GOVERNMENT / RBI MAY ISSUE DIRECTIVES TO
INDIAN BANKERS FOR COMPLIANCE IN LETTER
& SPIRIT
• PROVIDE SINGLE WINDOW FACILITY FOR TAX
RELATED ISSUES. CLEARANCE FROM THE STATE
CAN BE DISPENSED WITH
• GIVE IMPETUS FOR INDIGENIZATION OF CSP
EQUIPMENTS.
• INCENTIVE FOR USING DRY COOLING CAN BE
IMPLEMENTED AT THE PPA STAGE
GODAWARI GREEN ENERGY LTD.
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CONCLUSIONS:
• NEED TO OBTAIN RELIABLE METEROLOGICAL DATA
PARTICULARY DNI.
• LAND ACQUISION SHOULD BE SIMPLIFIED IN A
TIMEBOUND MANNER BY REVENUE DEPARTMENT.
• ECB NORMS BE MADE ACCESSIBLE TO SOLAR
PROJECT PROPONENTS.
• INDIAN BANKS SHOULD CONSIDER CONCESSIONAL
RATE WITH PRIORITY ALLOCATION OF FUND FOR
SUCH PROJECTS WHEN IT IS MANDATORY TO
SOURCE A CERTAIN % OF ITEMS INDEGENOUSLY
GODAWARI GREEN ENERGY LTD.
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RECOMMENDATIONS
• MINISTRY OF NEW & RENEWABLE ENERGY (MNRE)
SHOULD COORDINATE WITH STAKEHOLDERS TO
DEVELOP STRATEGIES FOR ATTRACTING
INVESTMENT.
• GOVERNMENT SHOULD CONSIDER TO DEVELOP RPO
ENFORCEMENT POLICIES AND RECs MARKET.
• MNRE SHOULD FACILITATE COLLECTION &
SHARING OF ACCURACY OF DIRECT IRRADIANCE
(DNI) DATA.
• THERE SHOULD NOT BE ANY % FIXATION FOR
MANDATORY INDEGENOUS SOURCING. ULTIMATELY
THE PRIMARY GOAL OF EVERY STAKE HOLDER IS TO
BRING DOWN THE COST. DEVELOPERS SHOULD BE
FREE TO SOURCE FINANCE AND EQUIPMENTS AS
PER THEIR CHOICE.
GODAWARI
GODAWARI GREEN ENERGY
ENERGY LTD.
LTD.
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THANK YOU!
GODAWARI GREEN ENERGY LTD.
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