Monday, March 1, 2010
The Union Cabinet is going to consider the mission document, which requires India to generate 1,000 mw of solar power every year by 2013. A complete package has been proposed to propel the power sector into `solar reforms' that could lead to annual production of 20,000 mw by 2020 if phase I of the solar mission goes well. The country currently produces less than 5 mw every year.
In the first phase, between 2010 and 2013, the government is also proposing to generate 200 mw of off-grid solar power and cover 7 million sq metres with solar collectors.
The mission, if approved by the Cabinet, will entail three phases with the ambitious targets and financial mechanisms for the latter two phases being reviewed on the basis of performance in the first three-year phase.
By the end of the final phase in 2022, the government hopes to produce 20,000 mw of grid-based solar power, 2,000 mw of off-grid solar power and cover 20 million sq metres with collectors.
Solar lighting systems would also be provided to 9,000 villages under existing schemes by providing soft loans which would be refinanced by the Indian Renewable Energy Development Agency Limited.
Instead of the large direct subsidy to solar power producers suggested earlier, the government has decided to integrate solar power production and sale into existing power purchase mechanisms.
NTPC Vidyut Vyapar Nigam Limited (NVVN) shall in the first phase be made the nodal agency to buy solar power from producers at the rate recently established by Central Electricty Regulatory Commission. It would then sell it to state utilities which would be credited against the compulsory renewable energy purchase targets which the respective state electricity regulatory commission sets up. Specific targets for solar power may also be set up for the utilities to buy as part of their power portfolios.
NVVN will bundle solar power with the unallocated central pool to sell it to state utilities.
The government also plans to do away with customs and excise duty on import of capital equipment as well as ease the duty rates for raw material and inputs.
Roof-top solar power will be promoted by providing a generation based incentive for self-use as well as putting the power on to the grid.
To enhance human resources involved in the sector, it wants to train at least 1,000 engineers to specialise in the field besides providing scholarships to 100 engineers to study abroad in the first phase of the mission. IITs and other engineering institutes will be asked to set up specialised courses to meet the industry's demand.
To promote innovative uses of solar power, a venture capital fund will be set up to promote start-ups in collaboration with institutes like IIMs. A national centre of excellence for research on solar power is proposed as well to push research and development in the emerging field.
The government has proposed a Solar Energy Authority or a Mission with an additional secretary rank official to head the executive arm.
Friday, January 29, 2010
Saturday, January 2, 2010
According to a recent TOI report, The Rajasthan Renewable Energy Corporation (RREC )has received 90 proposals worth 3,000 MW capacity to set up solar power ventures. That is a potential Rs. 51,000 crore in the offing. RREC has already approved proposals from over 11 companies including Azure Power India Private Limited, Reliance Industries, Jindal Power, Par Solar, GVK Power and Infrastructure Ltd, Moser Baer Photovoltaic Ltd. This says a lot about the government’s aggressive new stance in regard to power projects. In a country traditionally dependent on coal and natural gas, newer and friendlier alternatives such wind, hydro, and solar power offer new opportunities.
One of the hurdles solar power will face is the high upfront costs in infrastructure. According to a report, the cost per megawatt of solar power is close to Rs 20 crore, while that of coal and natural gas is almost four times lesser Rs 4-5 crore. We believe that solar’s long-term advantage over non-renewable, dirty fuel sources is clear. Fortunately, the Indian government has taken a bold step of making a long-term investment in the growth of this sector with it’s announcement of theJawaharlal Nehru National Solar Mission. Solar’s ability to pay off in the long run as well as the subsidies it can earn from the government due to it’s long term, strategic importance to solving our energy and climate crises. Moreover, an investment in the solar sector will mean thecreation of more jobs, versus other sources of power, particularly as the JNNSM brings more manufacturing of solar power plant components to India. Solar PV plants generate 0.91 jobs per Gigawatt hour (GWh), versus coal, which generates 0.11 jobs per GWh.
Azure Power is at the forefront of this national effort. Because we design, finance, construct, and operate our plants, our incentives are aligned to produce the most clean power at the lowest cost. We get paid per unit of power we produce, whether by our commercial or utility customers. We work throughout India, supported from our operations centers in Delhi and the US.
Please contact us if you are interested in powering your future with clean, reliable solar energy.
Inderpreet S Wadhwa has mostly been associated with start-ups and Fortune 500 companies. He also co-founded and sold a software education company in Silicon Valley a few years back.
And though he's still associated with the word 'silicon', it does not relate to information technology. Instead, he's now the founder & chief executive officer of Azure Power, a solar photovoltaic company that he founded two years ago in India [ Images ].
That makes him the first entrepreneur to sell solar power commercially in India.
"I returned to India after 15 years to make a difference, besides making money," says Wadhwa. In 2007, he started on his vision to set up India's first private solar power plant.
"Many small and big companies have entered the fray but none of them have commissioned any projects yet," he adds.
Commercial and sentimental reasons dictated his choice of Punjab. "I was born in Amritsar, so I wanted to give something back to this place," he said.
Besides, the Punjab government is offering a peak rate (peak hours are billed at higher rates) for sale of power from solar projects at Rs 8.93 per Kwh (kilowatt-hour) from 2011-12, higher than the Rs 3 to 4 per kwH it pays for conventional energy.
This doesn't quite cover costs (Rs 12-20 per kwh) but because the power purchase agreement with Punjab is valid for 25 years, Wadhwa reckons he'll make money at some point since the costs of solar power generation are expected to decline at 7 to 9 per cent per year by 2020. Hence, Azure Power gets the benefit of reduced costs over time and it also does not have to look out for buyers during this period.
After planning to generate 18 Mw power through solar PV power plants, the state government has started to allocate other such projects. Being environment-friendly and pollution-free, the Punjab government has stated that these projects should be eligible forcarbon credits under the Clean Development Mechanism.
Wadhwa claims that his power plant is cost-effective -- the 1 Mw plant costs Rs 17-19 crore (Rs 170-190 million).
Compared to this, public sector Bharat Petroleum Corporation Ltd [ Get Quote ] is building a 1 Mw PV power plant in Mohali for Rs 25 crore (Rs 250 million).
Wadhwa argues that his costs will fall further once the prices of silicon and PV modules fall. "Besides, the ministry of new and renewable energy allows for a further generation-based subsidy (varies in each state) which makes it a viable proposition," says Wadhwa.
Azure Power received initial venture capital funding from Helion Ventures (an India-focused venture fund) and Foundation Capital (a global investment fund which focuses on start-ups).
All these states offer different peaking rates and assure purchase of solar power for a given period of time in a bid to encourage renewable energy projects and reduce carbon emissions.
By September 2010, Wadhwa plans to set up another plant in Punjab to take the capacity to 4 Mw. He also plans to set up an 8 Mw plant in Gujarat by the end of financial year 2009-10.
To finance these plants, he has two more investors lined up. One is the International Finance Corporation, the commercial lending arm of the World Bank, which is planning to make a quasi-equity investment of $10 million (around Rs 46 crore -- Rs 460 million) in upcoming solar power projects in Punjab and Gujarat.
"The debt to equity ratio is 2:1, so we expect to raise a total of around Rs 150 crore (Rs 1.50 billion) in the form of stake sale and bonds," says Wadhwa. He, however, declines to divulge the name of the other investor.
And how does he plan to raise the rest of the money? "Ongoing costs for these plants are minimal. Every proposed plant will generate money that can be ploughed back. Besides, we can always go for an initial public offering (IPO)," says Wadhwa.
Azure Power's uniqueness lies in the fact that the company designs, finances, owns and operates solar power plants. The solar PV modules are imported from countries like China and Wadhwa's team assembles the important modules as "completely knocked down kits".
"Had the quality been better and cost of modules manufactured in India been lower, we would have considered buying the solar PV modules from India itself," rues Wadhwa.
He explains that the solar PV modules imported from China and the US can generate more power per cell and hence occupy less land. "This helps us reduce the cost of setting up plants," says Wadhwa.
"My aim is to be a leading solar power generator in India by offering viable and socially-responsible alternatives to conventional sources of energy," he says.
The favourable policy of the MNRE and the government's National Solar Mission, he hopes, will only further his cause.