The Indian solar market has become remarkable over the last one year, with solar bid prices falling in a narrow range and large developers starting to dominate the solar auctions. This was in sharp contrast to JNNSM central solar auctions in earlier years when developers had bid irrationally low prices, as many of them did not have experience in solar energy development and wanted to make a mark in the hot emerging solar market. Though people had bid low, most solar PV projects got completed as solar panel prices crashed allowing developers to build the projects despite very low prices that they had bid. This was in sharp contrast to thermal power, where many of the large giant ultra-mega power projects either did not get built or went into huge losses as coal prices climbed sharply.

The recent solar power auctions in Madhya Pradesh once again saw the return of the excess competition era, with prices bid as low as Rs 5.05 /kWh ( around USD 8c/kWh) when in the last auction prices were more in the range of Rs 6/kWh. The auction saw around 100 players participating and more than 3000 MW were bid, despite just 300 MW of solar power plants being on offer. There was a large mix of competition with large foreign developers, domestic developers and even small companies participating in the auction. The range of bids was also quite wide with bids between Rs 5-7/kWh. Most of the large developers such as First Solar, SunEdison, Adanis etc. did not get a single MW in the auction. With solar auctions becoming the preferred way of building solar power capacity, large developers have a problem on their hands due to excess competition.

Many companies such as Essel Infra, SunEdison etc. have committed to bid massive capacities but given the trend, they may not reach a fraction. Tamil Nadu government is already facing severe criticism for not awarding the 648 MW solar capacity through solar auctions. Their deal with Adani for Rs 7/kWh is certain to be scrapped. This means that unlike wind power which got fixed feed in tariffs, solar power will keep going the solar auction way.

This means more pain for developers and good times for consumers. While a lot of people have criticized the low bids saying that they will lead to bad quality projects and is not sustainable, I think it is. While some developers may get burnt, the trend of lower prices is here to stay. Solar bid prices in USA, UK and Middle East have ranged from 4c-8c/KWh. While Indian interest rates are higher, the labor cost is cheaper. 8c/kWh has become the new normal for solar prices in India.

Winning Bids

SN Bidder Total Bid Capacity
(MW)
No of Bids Fin Bid Capacity (MW) 3717 Cumulative MW Fin Bid (INR/kWh) Allocated MW
1 Sky Power South East Asia Holding 2 Company Limited 150 3 50 50 5.051 50
2 Sky Power South East Asia Holding 2 Company Limited 150 3 50 100 5.109 50
3 Sky Power South East Asia Holding 2 Company Limited 150 3 50 150 5.298 50
4 Narbheram Vishram, Kolkata 30 2 20 170 5.380 20
5 Narbheram Vishram, Kolkata 30 2 10 180 5.398 10
6 Narendra Kumar Khanna, New Delhi 2 1 2 182 5.451 2
7 Made Easy Education Private Limited, New Delhi 10 1 10 192 5.452 10
8 Fluid Con Engineers, Jaipur 2 1 2 194 5.456 2
9 Rays Power Expert Private Limited, New Delhi 12 1 12 206 5.457 12
10 Design Co, New Delhi 14 3 5 211 5.610 5
11 Renew Solar Power Private Limited, Gurgaon 300 6 51 262 5.630 51
12 Hero Solar Energy Private Limited, Okhla 75 2 50 312 5.641 38

 

India into another Solar scam

We have really come a very long way in India’s solar industry with a recent deal between India’s southern state of Tamil Nadu and the Adani Group for buying power from 648 MW of solar plants at Rs 7/kWh ( (~11c/kWh) considered too high. A lot of the opposition parties are calling it a scam, since a recent tender in another Indian state of Madhya Pradesh saw the lowest bids for solar power coming at just Rs 5/kWh which is around 30% lower than the Adani bid. Note the Indian government has mostly procured solar power through reverse auctions. The results have been quite good with successive auctions seeing lower rates for solar energy with high competition. In fact the recent 300 MW solar power auction saw over 100 large and small companies putting in their bids. This led to the price falling so low. Though some people are contesting the lower prices in the bids as irrational and not sustainable, the Rs 7/kWh is clearly too high as Indian CERC declared Rs 6.49/kWh as the reference price last year. The prices have only come down since then and Rs 6/kWh is considered as a decent price by both developers and governments.

The Adani Group has been aggressively expanding into the solar power area singing MOUs worth billions of dollars with state governments in TN and Rajasthan. It also signed a MOU with SunEdison to build a $4 billion solar manufacturing plant in Gujarat. Considered extremely close to the new BJP government in the center, Adanis have been buying and building plants like there is no tomorrow. They have already bought a number of thermal power plants from distressed owners, despite the Group straining under a massive debt burden. Even as other infrastructure groups like JP Associate, GMR, GVK, Lanco etc. face the prospect of bankruptcy and asset sales, Adani Group has been expanding at a ferocious rate.

The recent deal with TN does not make much sense for the government there, as they could easily get a lower rate through competitive bidding. Even the Adanis have bid only Rs 6/kWh in MP which makes the recent deal even more controversial. Now I don’t think this project of the Adanis will come to fruition, given the huge hue and cry and the simple math which makes this deal seem tainted. The Rs 7/kWh rate was formulated by the government a couple of years ago but given the rapid change in the solar sector, it has already become obsolete.

The solar sector in India has not been left untouched by corruption and unethical practices which is prevalent in all walks of Indian life. The first solar scam was the one by Lanco group which was said to have bid for multiple projects during JNNSM Phase 1 using dummy companies, to circumvent group limits on the capacity allocation. The court ultimately did not think it was a scam as everything was right in a legal sense, though it may not have been completely ethical.

The second big scam was in Kerala where people closely associated with the Chief Minister’s office defrauded investors of crores of rupees through solar investment schemes. Now the Adani Group has become the controversy. Please note there is no evidence of a scam in this case, though it smacks of incompetence by the government officials.

Gamesa enters the Indian Solar Market

Gamesa is looking to aggressively enter the Indian solar energy market, as the country is set to become the fastest growing market in the world. The Indian government is set to come out with tenders for 15000 MW of solar power this year and is choosing on financing from different domestic and international sources for boosting solar energy in the country. Some large renewable energy developers like SunEdison, Abengoas etc. have already made big plans to set up massive capacities in India. Gamesa is not looking at the solar development space, rather it is looking at ramping capacity through EPC. The company has set up a 10 MW solar plant in Tamil Nadu for a clutch of textile companies, who will sell the power to the state government at Rs 7.01/kWh or ~11c/kWh. Gamesa is also looking to set up solar panel / inverter manufacturing capacity in India.

Gamesa like other major wind turbine companies is facing saturation in the wind energy market, while the solar market continue to show double digit growth. In 2015, solar energy should eclipse the wind energy in capacity additions, with 55 GW of solar plant capacity additions being expected. It is imperative for Gamesa and other players like Suzlon to look at solar energy to keep up their growth rates. Suzlon has also firmed up plans to massively increase its solar development and EPC plans. These companies hope to utilize their skills at RE development and land acquisition. They also have experience in project financing for large capacity power plants.

Gamesa has been a successful wind energy equipment supplier and contractor for wind farms in India. While wind energy is also getting a boost by the Modi government, solar energy is where the main action is and Gamesa is ramping up to take advantage.

Solar Power at Indian Airports

The transport industry in India is now considering using solar energy to cut its dependence on thermal power and diesel consumption. The AAI (Airport Authority of India) will now construct solar power plants at its airports to meet its power requirements, according to the MoU signed between AAI and Solar Energy Corporation of India (SECI). Any excess power will be supplied to the grid as well. It will first instal 50 MW capacity solar plants on its roof top surfaces as large areas are available at airports. This will be increased to 150 MW over a time period. AAI has plans to solarize 30 such airports at the moment.

The AAI spokesperson said the solar plants would not only achieve significant savings in power bills over a period of time but also lead to significant saving in carbon emissions. The plants would also make airports self-sustainable so far as energy requirement is concerned, he said.

Source: TOI

Also read about Solar Powered Cars here.

Solar Power in Indian Railways

The Indian Railways is also considering to supply power to the railways using solar energy. A trial run was conducted on a indian railwaysnon-AC coach of the Indian Railway, with solar panels on its rooftop surface. The roof surface of a coach is ~40 square meter and can accommodate a maximum of 18 solar panels. It is generating 17 units of energy on a daily basis, enough to support the lighting system in the coach. The Indian Railways is also considering establishing rooftop solar railway stations, other railway buildings and land. It is planning to generate 1 GW solar power in the next five years. This will reduce diesel consumption and will enable Rs.1.24 lakhs saving per coach year.

“As the pilot project, one non-AC coach has been fitted with solar panels on the rooftop. The trial has been successful so far with the coach generating nearly 17 units of electricity every day. Depending on its success, decision will be taken to convert the entire train into a solar power-enabled one,” said Divisional Railway Manager, Arun Arora.

Source: Dailymail
India is a vast country with large power needs. All these efforts will go a long way in saving power cost and reducing the burden over the states. The transport industry has been considering the adoption of alternative fuel for sometime now. If the power problems get solved by this, I think the industry will then be in a better position to address other service related issues that the customers who are traveling face. Thinking Solar was an excellent idea in my view.

10 GW Solar Park in Rajasthan

Rajasthan might witness another huge solar investment onto its sunny lands. Rajasthan suffers from huge power shortages and a solar park could be the answer to majority of its power woes. The Adani Group of India has signed a JV with the state government to set up a 10 GW solar park in Rajasthan by 2022. This park will entail a 50% ownership by each of the two parties and will attract investments worth INR 60,000 crores. Adani plans to generate 5,000 MW in the proposed solar park. The proposed park will also have its own manufacturing plant and will thus create huge employment opportunity. This park is supposed to be the largest in India till date and will be known as Adani Renewable Energy Park Rajasthan Ltd. It is expected that the solar park will produce clean energy of ~16,600 million units.

Read about Rajasthan Solar Energy Policy.

rajasthan solar

Rajasthan has total commitment to achieve 25 GW of solar capacity by 2022. This JV will be a step towards the state’s goals. Rajasthan government shall provide land for the solar park and also some power infrastructure. Also India has a target to build 25 solar parks of capacity greater than 500 MW across the country. Adani group already has a 40 MW solar plant in Gujarat and is also India’s largest private thermal power generating company. The company had also signed a MoU with SunEdison to invest $4 billion jointly for constructing a solar PV plant in Gujarat. I hope Rajasthan, which is one of the largest power deficit states of our country be successful in constructing this solar park, after its dreams of setting up the Mega solar project was shattered on environmental issues.

“This project will be India’s largest solar park and will also house manufacturing facilities to be set up under the country’s ambitious Make In India initiative. We have embarked upon a mission of becoming a world leader in renewable power generation technologies, with a special focus on solar. The development of Solar Park facility is our contribution towards realization of our Honorable Prime Minister’s campaign and commitment towards clean and green energy in India.” said Mr Gautam Adani, Chairman, Adani Group.

Source: Adani PR

India formalizes its 100 GW target

Till now India’s solar target of 100 GW by 2022, was not officially laid down and was communicated only through the minister’s word of mouth. On June 17th, however the Prime Minister of India formally announced India’s solar target of 100 GW to be achieved by 2022. The total global solar capacity installed by 2013 was 100 GW. This formal announcement has been done under the National Solar Mission, which will further boost the country and inspire it to achieve the targets. Though critics have not been a big fan of the numbers, I believe that even if the country achieves a part of what is laid down, it will be great for our energy deprived nation. Also once India is confident about its energy capacity, will it be able to distribute it to the energy deprived people of our country.

solar panels india

Read more about Solar Power in India.

The 100 GW target consists of 40 GW of rooftop solar installation  and the rest 60 GW would be large and medium scale grid connected solar power projects. With falling costs and improving cell efficiencies, there will be huge opportunities in the installation space, as distributed solar creates much more employment and profit opportunities for smaller players. MNRE has now come out with an appropriate action plan in place and will achieve this target under three parts of 19.2 GW each. Funding will be aided by large PSUs and IPPs. Approximately INR 150 billion of capital subsidy will be provided for rooftop solar.  The state government have also come out with their respective policies. The total investment is calculated to come around $100 billion.

How can solar create jobs in India

This big number will accelerate solar growth in India and will enable the country to be more energy-smart and confident. The manufacturing hub in the country will also create ample job opportunities and will provide employment to the unemployed. This could solve a major issue of the country. It plans to use the industrial technical institutes to train people and has already started a separate ministry to look after skilled manpower development. India should provide training to the youth in installing small scale rooftop projects, solar products and small village microgrids. The government banks need to provide funds at subsidized rates to help them. This will help the youth in gaining some skills and understanding of the solar market. It would be a more practical way rather than funding multi crore projects. I want to remain highly optimistic about the solar sector improving in India and also hopeful about the Achhe din soon returning to the country!