© LANCO Group, All Rights Reserved

SPV Power Technology in India

Satyendra KumarLanco Solar, India

satyen.kumar@lancogroup.com

ASEAN-IndiaWorkshop on Cooperation in New and

Renewable Energy

05-06 Nov., 2012Vigyan Bhawan, New Delhi

Power Sector in India – Role Solar Can Play

India’s Current Solar PV Installation Base

Agenda

SPV Technologies

Lessons Learned

Conclusions

Norway

Canada

UAE

USA

Australia

Japan

France

Germany

Russia

S. Africa

World Avg

China

Brazil

India

Pakistan

Nigeria

0 5,000 10,000 15,000 20,000 25,000 30,000

24,867

17,061

16,891

13,654

11,217

8,071

7,931

7,149

6,435

4,759

2,875

2,631

2,232

778

436

126

Kwh/annum

India lacks significantly in Per Capita Consumption

Source: World Bank, CEA

USAChina

Japan

Russia

India

German

y

Canad

a

France

Brazil

Italy

0

200

400

600

800

1000

12001084 1050

280233

194138 125 119 104 102

GW

India ranks 5th in terms of Installed Ca-pacity

Source: EIA, CEA

India – Electricity Opportunity

India per capita Electricity Consumption is lagging well behind World Average and this would catch up fast owing to rising levels of Disposable Income

An average of 16 GW of power generation capacity installations required each year till 2020 to meet fast growing demand for electricity power

Source: D&B Industrial Research Service

India has huge potential for solar power deployment

Source: MNRE, Edelweiss Research (As at June30, 2012

Solar Power Density in India

India receives on an average 4-7kWh/m2 of solar energy daily with an average of 250-300 sunny days in a year

Rajasthan and Gujarat receive maximum radiation in the range of 6–6.6 KWh per square meter

Cumulative grid connected Installed solar power capacity is quite low in India

Accounting for a negligible proportion of India’s power capacity

Capacity additions in Indian solar industry have been miniscule as compared to the additions globally

India yet to optimally utilize its solar potential

Grid connected Solar Power(Cumulative Capacity)

1,035 MW

Additions during last year (FY12) 446 MW

Off-grid Solar PV plants(Cumulative Capacity)

85 MW

Solar Water Heating – Collector Area(Cumulative Capacity)

5.63 Mn Sq. m

Solar installed capacity – India

Source *Potential (MW) Installed (MW) as on Jan’12

Wind Power 45,000 16,179

Biomass 16,000 1142

Small Hydro 15,000 3300

Cogeneration-Bagasse

3,500 1952

Waste to Energy 2,700 74

Solar Unlimited 481

Source: * MNRE - Development of Conceptual Framework for REC Mechanism

India Poised to be a Major Global Contributor

E&Y Solar energy attractiveness Index : India ranked 2nd in the world – only behind USA

Rank CountryInstalled

capacity (GW) in 2011

Solar Power Target

Clean Energy Target

Key incentives

1 USA 4.62020 :~ 16

GW17% Production / Investment tax credit

2 India 0.5 2022 : 22 GW 15.90% FiTs, REC, Capital subsidy

3 China 3.02015 : 9 GW 2020 : 50 GW

15% of primary energy

Feed-in-Tariffs (FiTs), GBI for rooftop an biding installed PV, Tax incentive for PV

4 Italy 12.4 NA 17% FiTs, REC, Tax incentive

5 Spain 5.32020 : 8-9

GW20% REC, Tax incentive

6 Australia 1.3 NA20% of total consumption

Generation Based Incentive (RBI), Renewable Energy Certificate (REC)

7 Japan 5.0 2020 : 28 GW 22% FiTs, REC, Tax incentive

8 Germany 25.02020 : 50-70

GW

35% (50% by 2030, 65% by 2040, 80% by 2050)

FiTs, REC, Tax incentive

India, USA rapidly advancing; EU slow and steady

USA :

Continues to grow rapidly with a 300 MW

in Arizona receiving approvals. Expected

to remain the largest solar market in

world in near future

India :

Rapid growth seen in high potential solar

states of Rajasthan and Gujarat. Gujarat

launches Asia's largest solar park of 600

MW

China :

Many large-scale plants commissioned.

Hit by oversupply in the international

export market

Italy, Spain, Germany :

Affected by the sovereign debt crisis and

a weak future economic outlook of the

Euro

Global Solar Market Outlook

Source : Industry Research, Ernst & Young Report on Renewable Energy Country Attractiveness indices

Institutional Arrangement to support bundling of Solar Power

Strong National Policy Initiatives at the Centre (JNNSM)

State Government(Land, Water, Other

Sanctions)

Solar Power Developer

Central Electricity Authority

(Technical Support)

National Thermal Power Corporation

(NTPC)

NTPC Vidyut Vyapar Nigam (NVVN)

Buys → Bundles → Sells

State Electricity Boards (Buyers of bundled power)

CERCDetermines Tariff

1 kWh Solar

4 kWh Thermal Bundled 5 kWh at INR 4.17/kWh

Comprehensive framework for development of solar power in India

Covers both solar power generation as well as manufacturing

Incorporates specific fiscal / monetary incentives

Objectives

Installed solar power generation capacity of 20 GW by 2020; 100 GW by 2030 and 200 GW by 2050

To achieve grid parity by 2020

To achieve parity with coal-based thermal power generation by 2030

4-5 GW of installed solar manufacturing capacity by 2017

20 mn solar lighting systems for rural areas by 2022

Note : Rates for SPV and ST based on average bidding tariff. The above rates expected to be achieved on commissioning of all power plants by May 2013

6

Jawaharlal Nehru National Solar Mission (JNNSM)

Among the states, Gujarat – Leading the Way

Tariffs PV project (Rs. /kWh)

Thermal projects (Rs. /kWh)

Projects commissioned before 31.12.10

15 (for first 12 years) 10 (for first 12 years)

5 (from 13th to 25th year) 3 (from 13th to 25th year)

Projects commissioned after 31.12.14

12 (for first 12 years) 9 (for first 12 years)

3 (from 13th to 25th year) 3 (from 13th to 25th year)

Gujarat

First state to launch an independent solar policy in 2009.

Policy operative till 2014.

PPAs of 969 MW signed. The projects allocated through the

MOU route with pre-qualification criteria

Projects of 690 MW commissioned till 30th June, 2012.

Asia’s largest Solar Park – The Charaanka Solar park in Patan

district of Gujarat inaugurated in April, 2012

An energy surplus state. Does not need to allocate more

projects to fulfill its RPO obligations

Gujarat Energy Development Authority (GEDA) provides

assistance in identification of suitable locations, facilitation in

arranging Right of Way & recommending the project

High investor confidence –

More than 1000MW of projects have pre-registered for

future allocations

Applications worth 1715 MW received for allocation of

150MW

Banaskantha

Patan

Surendra Nagar

Asia’s largest solar park

…And other states following suit

Particulars Karnataka Rajasthan Madhya Pradesh Tamilnadu Orissa

Policy instrument Karnataka Solar Policy, 2011-16

Rajasthan Solar Energy policy, 2011-2017

MP Solar Energy Policy TN Solar Energy Policy 2012

Target Capacity 200 MW - DISCOMS upto 2015-16 (40 MW p.a.)

50 MW - Thermal 100 MW - REC mechanism

50 MW SPV; 50 MW ST DISCOMSPhase I (upto 2013) -200MWPhase II (2013 - 17) - 400MW 10 MW : MNRE

200 MW SPV announced

• 3000 MW by 2015, including rooftop•1500 MW utility scale by 205

50 MW SPV in 2012-13 announced

Capacity Cap SPV : Min 3 MW, Max 10 MWST : Min 5 MW

SPV : Min 5 MW, Max 10 MWST : Min 5 MW, Max - 50 MW

SPV : Min 5 MW  NA  25 MW

Sale of Energy under state policy

Reverse bidding Ceiling tariff :

SPV : INR 14.50 / kWhST : INR 11.35 / kWh

Reverse bidding Ceiling Tariff :

SPV : INR 10.12 / kWh

Reverse bidding Ceiling Tariff :

SPV : INR 15.35 / kWh

Reverse bidding Ceiling Tariff :

SPV : INR 15.35 / kWh

Reverse bidding Lowest bidder

offered entire 25 MW

Operational :State PolicyJNNSM, Phase I Batch IMigration schemeRPSSGP through IREDA

14 MW ---

-25 projects : 125 MW8 projects : 37.5 MW10 projects : 10 MW

----

---

-1 project : 5 MW-7 projects : 7 MW

Bids awarded under state policy / other schemes

80MW under State Policy 30 MW - 30 months of PPA; 50 MW - 18 months of PPA 817 MW - REC mechanism 100 MW - NTPC – Bundled

Last date for submission of RfS for 200 MW postponed indefinitely

200 MW under State Policy

Expected allocation of 1000MW in 2013

25 MW

Source: MNRE, State Nodal Agencies, Research Reports

3,512

902

3,136

1,476

1,034

2,150

1,980

4,398

1,262

2,086

1,928

3,656

3,004

1,690

State Electricity Consumption (Bn units)Equivalent Solar Installation capacity (MW) RPPO 3% (FY 22E)

FY13E FY 22E

Andhra Pradesh 89.0 175.6

Chhattisgarh 21.8 45.1

Gujarat 85.4 156.8

Haryana 38.4 73.8

Jharkhand 23.4 51.7

Karnataka 53.5 107.5

Madhya Pradesh 49.3 99.0

Maharashtra 125.7 219.9

Orissa 27.2 63.1

Punjab 60.5 104.3

Rajasthan 48.9 96.4

Tamil Nadu 87.2 182.8

Uttar Pradesh 79.3 150.2

West Bengal 41.0 84.5

Total 968.7 1,914.5

Solar RPOs Pushing the Frontiers Further

38,290 MW

• The solar power purchase obligation for the States start with 0.25% in phase 1 (FY2011-2013) and go up to 3% by FY 2022

• Installed solar capacity by FY 2022 estimated at 38 GW

*Source: MNRE and Bridge to India: Solar Compass: Oct 2012

as on Oct 2012

Total Grid Connected Installed Capacity Map – India

Solar – Knowledge base and Technology

Grid Extension, Availability and Stability

Solar Photovoltaics (SPV)

Technology PV production – whole value chain

Equipment PV production – whole value chain

Grid Connected Solar Farms – EPC, Inverters, Monitoring Systems

Engineering

Risk Assessment and Insurance

Solar Resource Assessment (GHI, DNI) : Satellite Based Estimates & Ground Measurements

Financing

What are various SPV technologies ?

c-Si Thin Films

Mono /Single-Crystal

Multi / Poly Crystal

Amorphous Silicon CdTe CIGS Organic

a-Si(single Junction)

Tandem /Micromorph/Double Jn/Triple Jn

18-23% 15-17.5% ~6-8% ~9-10% ~11% ~12% ~5% ?

Global Production: Technology Mix

© LANCO Group, All Rights Reserved

PolysiliconIngot/

WaferCells Modules

System Integration

Decentralised Application

Sand

Upstream Mid Stream Down Stream

GOVT OF INDIA – DOMESTIC SOLAR MFG ASPIRATIONS

Indian Solar Market demand is growing to be 1GW/yr by next year; and is set to increase further thereafter, due to Grid Parity achievement

To cater to the Indian market demand following manufacturing capacities are required:

Indian Solar PV Manufacturing

NSM Goal : 2 GW / yr Domestic Mfg by 2020

Existing / Under Constr Indian Capacities

Remarks

Polysilicon 12,000 T/yr 1,800 T/yr (constr) Lanco

Ingots & Wafers 2,300 MW/yr 300 MW/yr (constr) Lanco, Birla Surya

Cells 2,200 MW/yr 1,010 MW/yr Indosolar, Jupiter, BHEL, Websol, Tata, Moserbaer, EuroMultivision, BEL, CEL, SolarSemi

Modules 2,000 MW/yr 1,900 MW/yr More than 40 companies

PV Technology wise status (JNSM)

62.07%

37.93%

Thin Films c-si

Module Technology Breakup - by % capacity

JNSM –Phase I (Batch-1): 150 MW Phase I (Batch-2): 350 MW (Anticipated)

Cheaper Financing Options decide the technology options – Equipment comes with funding

c-Si Module to be manufactured domestically

c-Si cells and Module to be manufactured domestically

55%45%

Module Technology Break-up by % capac-

ity- Phase 2

Thin-film c-Si

16

Technology share in Gujarat & leading financiers

Multi, 46%CdTe, 23%

Am-Si,

24%

CIS

1% Tandems 6%

Technology share of PV projects in Gujarat totalling 935MW

Cheaper Financing Options decide the technology options – Equipment comes with funding

Technology Vision for the PV Future

• What technology is needed• What is needed to develop that technology• What challenges it would involve to get commercialized

Who needs the PV technology

For what?

Where/When does one need it

Who needs Solar ?

Who needs Solar ? For What?

A Systems Approach

• Top-down Approach – Grid Centric

• Bottoms-up Approach – Off Grid, Needs

Specific Solutions

Photovoltaic Systems

• PV Panels: high efficiency at low cost !

• Inverters: Long Life time ?, Higher efficiencies, Tropicalized,

more intelligent

• Variability of Solar Resource

- Storage solutions: Batteries, Ultracapacitors,….

• Power electronics – Load Specific

• Transport of power – Availability and Stability of Grid

Frugal Engineering – Tata Nano

Lessons Learned : Lack of reliable radiation data

22

Solar Monitoring Stations

MNRE has initiated a major project on Solar Radiation Resource Assessment (SRRA)

Centre for Wind Energy Technology (C‐WET) has installed a network of 51 Automatic Solar Radiation Monitoring Stations in different states

Project developers have to rely on satellite information from sources like NASA, NREL, etc

Uncertainty surrounding the generation potential at site. Different solar radiation database yield varying estimates.

The returns of a solar project are highly sensitive to radiation levels.

Lack of adequate ground-mounted monitoring stations to validate satellite based estimates

Radiation variability could significantly affect projected cash flows

Challenges Faced currently Move towards building Solar Radiation Atlas

Lessons Learned : Scale of Projects

23

Solar projects are small compared to traditional power plants

Lenders are reluctant to finance small transactions

In cases where finance is available, transaction costs are higher

Higher MW range of projects had to be promoted for using better evacuation infrastructure

Government realising these challenges has considerably increased the size of solar PV projects allotted in phase I batch II of JNNSM

From Batch I to Batch II , max capacity allotted to any developer has increased to 50 MW

States following the cue, are also encouraging large scale development which would further bring in economies of scale.

Particulars Max Cap

JNNSM Batch I Phase I Max 5 MW

JNNSM Batch II Phase I Max 50 MW for one developer; each project of max 20 MW

Karnataka 10 MW

Rajasthan 10 MW

MP No upper Limit

Gujarat 25 MW

Orissa Phase I & II 25 MW

Maximum Cap allotted to a developer for Solar PV

Challenges faced due to size of Projects Steps taken to address the issue

SPV Challenge:

The Grid Parity ?

Or

Grid Substitute / Support

Socket Parity

25

Road to Grid Parity is Blocked by the High Cost of Financing in India

● Prohibitive cost of financing in India in terms of

prevailing interest rates

● Long-tenure loans not available (15 years and

more) with Indian banks. Stretches cash-flows

during debt service period

* Includes Hedging Cost • NCDs = Non-convertible Debentures• ECAs= External Commercial Borrowings• ECA=Export credit agency l

7.7%7%

3%

10.5%

5%

2%

5.80%

4.90%6.70% 5.50%

9.00%

0.50%

3.30%

0.0%

5.0%

10.0%

15.0%Prime Lending Rates (2011) (%)

Mode of Solar Financing in India

Source: World Bank

*

*

Roadmap to High Growth & Grid Parity

Interest Subsidy / VGF for Solar Farm; Rs 15 L/ year/MW (for 5-years)

Higher number of RECs for Older Plants

World Class R&D Centre - High efficiency Solar cells; Reduction in BOS & Tracking system costs

Capital Subsidy / Incentives for domestic PV Mfg projects – to offset interest & power costs

Domestic Content & ADD support for 2-3 years

Rs.5 / unit

Every MW of Solar Power Plant create direct / indirect jobs:

Solar Mfg : 20 Solar Farm Project : 65O&M : 15

During 2012-17 : Potential 1,00,000 jobs

Grid Parity – Reliable & affordable power - Empowerment of rural population

THANK YOU!