energy sector management assistance program

8/20/2019 Energy Sector Management Assistance Program

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Development of Local Supply Chain:The Missing Lin fo! Concent!ate"Sola! #o$e! #!o%ects in &n"ia


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ii Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia Contents

(cno$le"gmentsi7

(c!onyms an" (--!eviations 7

'7ecutive Summa!y 1

#a!t &: (ssessment of CS# #!o%ect #!ices an" Costs in &n"ia 8

Chapte! 1: &nt!o"uction Chapte! 2: (ssessment of Cost 9e"uction fo! CS# #!o%ects un"e!**SM 12 201 'stimation of LC)' /ase" on /i" (nalysis

1; 202 CS# #lant Cost 'stimates in &n"ia15 203 9easons fo!


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Chapte! ;: (nalysis of Manufactu!ing Capa-ilities of SpecificComponents 2;

;01 Mi!!o! Manufactu!ing &n"ust!y2;

;02 a-!ication &n"ust!y fo! Suppo!t St!uctu!es2>

;03 9eceive! Tu-es Manufactu!ing &n"ust!y28

;0; T!acing an" D!ive Mechanism &n"ust!y3?

;05 Sola! Steam 4ene!ato! Manufactu!ing &n"ust!y35

;08 603 Di!ect an" &n"i!ect 'conomic &mpact

;8 60; La-o! &mpact in Te!ms of o- C!eation ;8 605 &mpact of o!eign T!a"e

;

#a!t &&&: #!epa!ation of an (ction #lan to Stimulate Local CS#Technologies in &n"ia 5?

Chapte! >: #!esent Scena!io an" utu!e *ee"s 51 >01 Cu!!ent Situation 52 >02 *ee" to Suppo!t CS# #!o%ects 52

Chapte! 8: (ction #lan53 801 LongTe!m #olicy !ame$o! f!om the 4ove!nment

55 802 (vaila-ility of Lo$cost inancing

56


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803 inancial #lanning of Su-si"ies an" &ncentives 56

80; Mechanism fo! #!omotion of 9BD an" &nnovation 6?

Chapte! : 9oa"map fo! Specific &n"ust!ies 63 01 Mi!!o! Manufactu!e!s

6; 02 9eceive! Tu-e #TC Manufactu!e!s

65 03 T!acing an" D!ive Mechanism +T(DM,

Manufactu!e!s 66 0;

Chapte! 1?: Conclusions 68

iv Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in&n"ia #a!t &=: (ppen"i7es >1

(ppen"i7 1: CS# Technologies>2 (ppen"i7 2: Comme!cial #!o%ects an" #ipeline .o!l"$i"e81 (ppen"i7 3: )ve!vie$ of Cost D!ive!s in 9efe!ence 4lo-al CS# #lants82 (ppen"i7 ;: **SM an" 9egulato!y Mechanism88 (ppen"i7 5: Sola!

/i-liog!aphy1;?

/o7es

/o7 1: '7amples of &ncentives fo! Local Manufactu!ing of CS#Components ;3 /o7 2: '7pectations f!om the 4ove!nment62

igu!es

igu!e 1: Compa!ison of Diffe!ent 'ne!gy Sou!ces .o!l"$i"e1?


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igu!e 2: Sola! 9esou!ces fo! CS# Technologies1? igu!e 3: &llust!ation of CS# Staehol"e!s in &n"ia1 igu!e ;: #!o"uction an" Consumption of CS# 'lect!icity -y 2?5?22 igu!e 5: Minimum Deman" 9eAui!ements;1 igu!e 6: Cost 9e"uction #otential Due to Local Manufactu!ing fo! Components Consi"e!e" fo! 1?? M. #TC #lant $ithoutThe!mal Sto!age ;2 igu!e >: Sha!e of Local Manufactu!ing in #T Technology;> igu!e 8: Sha!e of Local Manufactu!ing in C9 Technology;8 igu!e : 9oa"map fo! Mi!!o! Manufactu!e!s6; igu!e 1?: 9oa"map fo! 9eceive! Tu-e #TC Manufactu!e!s65 igu!e 11: 9oa"map fo! T(DM Manufactu!e!s

66 igu!e 12: 9oa"map fo! igu!e 13: =ie$s of Linea! !esnel 9eflecto! (!!ays>3 igu!e 1;: /asic Scheme of a #T #o$e! #lant>; igu!e 15: (e!ial =ie$ of (n"asol #o$e! Station>5 igu!e 16: Scheme of a Molten Salt #o$e! To$e!>6 igu!e 1>: S'S SunCatche! Dish Sti!ling Design>8 igu!e 18: )ve!all &nvestment Cost /!ea"o$n fo! Linea! !esnel9eflecto! 9efe!ence #o$e! #lant83 igu!e 1: )ve!all &nvestment Cost /!ea"o$n fo! #a!a-olic T!ough9efe!ence #o$e! #lant $ith Sto!age +left, an" $ithout Sto!age +!ight,

8; igu!e 2?: )ve!all &nvestment Cost /!ea"o$n fo! #o$e! To$e! 9efe!ence #o$e! #lant$ith Sto!age +left, an" $ithout Sto!age +!ight, 8; igu!e 21: )ve!all &nvestment Cost /!ea"o$n fo! Dish Sti!ling9efe!ence #o$e! #lant 85 igu!e 22: Sola! &!!a"iation Map of &n"ia ("apte" f!om &MD

88 igu!e 23: ey 4ove!nment /o"ies &nvolve" in Sola! an" 9' Developmentin &n"ia 1 igu!e 2;: Satu!ate"Steam


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The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia


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igu!e 25: /asic Scheme of an &SCCS3igu!e 26: '7pecte" 'volution of &nstalle" Capacity .o!l"$i"e fo! ou!CS# Technologies 2?1?E2?1?2igu!e 2>: Cost /!ea"o$n Diag!am fo! Sola! Collection System of L#o$e! #lant 1?5igu!e 28: Cost /!ea"o$n Diag!am fo! The!mal Conve!sion System of L9eflecto! #o$e! #lant1?6igu!e 2: Cost /!ea"o$n Diag!am fo! 'lect!ical Conve!sion System of L9eflecto! #o$e! #lant1?>igu!e 3?: )ve!all &nvestment Cost 'volution of the L 9eflecto! #o$e!#lant 1?8igu!e 31: Cost /!ea"o$n fo! the Sola! Collection System of the9efe!ence

#T #o$e! #lant111igu!e 32: Cost /!ea"o$n fo! the The!mal Conve!sion System of the9efe!ence #o$e! #lant112igu!e 33: Cost /!ea"o$n fo! the The!mal Sto!age System fo! the 9efe!ence #o$e! #lant113igu!e 3;: Cost /!ea"o$n fo! the 'lect!ical Conve!sion System fo! the 9efe!ence #o$e! #lant113igu!e 35: )ve!all &nvestment Cost 'volution fo! the #a!a-olic T!oughTechnology 11;igu!e 36: Cost /!ea"o$n fo! the Sola! Collection System of the9efe!ence #o$e! To$e! #lant11igu!e 3>: Cost /!ea"o$n fo! the The!mal Conve!sion System of the9efe!ence #o$e! To$e! #lant12?igu!e 38: Cost /!ea"o$n fo! the The!mal Sto!age System of the9efe!ence #o$e! To$e! #lant12?igu!e 3: Cost /!ea"o$n fo! the 'lect!ical Conve!sion System of the

9efe!ence #o$e! To$e! #lant121igu!e ;?: )ve!all &nvestment Cost 'volution fo! the #o$e! To$e!Technology 122igu!e ;1: Cost /!ea"o$n fo! the Sola! Collection System of the DishSti!ling 9efe!ence #o$e! #lant12;


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igu!e ;2: Cost /!ea"o$n fo! the The!mal an" 'lect!ical Conve!sionSystems of the Dish Sti!ling 9efe!ence #o$e! #lant125igu!e ;3: )ve!all &nvestment Cost 'volution of the Dish Sti!lingTechnology 125igu!e ;;: #ipeline of the Diffe!ent Technologies until 2?25132igu!e ;5: &nvestment Costs /!ea"o$n -y Su-system fo! #T an" C9 #o$e! #lants in Te!ms of #e!centage13;

Ta-les

Ta-le 1: Main Cha!acte!istics of the ou! Main CS# Technologies11Ta-le 2: /i""e!s an" Discounts )ffe!e" fo! a CS# #!o%ect in *SM#hase & 13Ta-le 3: Cost /!eaup of a 9efe!ence 5? M. CS# #a!a-olic T!ough#lant 15

Ta-le ;: &n"ust!y 4!oups an" )the! )!gani@ations &"entifie" as eyStaehol"e!s 2?Ta-le 5: =en"o!s fo! Sola! iel" Components Cu!!ently &"entifie" in&n"ia 2?Ta-le 6: =en"o!s fo! #o$e! /loc Components an" Concept'nginee!ingF'#C Cu!!ently &"entifie" in &n"ia21Ta-le >: S.)T (nalysis fo! Local Manufactu!ing fo! CS# Components21Ta-le 8: T!a"itional &n"ust!ies #otentially &nvolve" in CS# &n"ust!yan" the Components They Coul" Manufactu!e23

vi Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in&n"ia Ta-le : Ma%o! Manufactu!e!s of Mi!!o!s in &n"ia25 Ta-le 1?: 4aps in Local Manufactu!ing25 Ta-le 11: Minimum &nvestment 9eAui!e" fo! CS# #a!a-olic Mi!!o!Manufactu!ing 26

Ta-le 12: S.)T (nalysis fo! Local Manufactu!ing of Mi!!o!s26 Ta-le 13: S.)T (nalysis fo! Local Manufactu!ing of Suppo!t St!uctu!es 28 Ta-le 1;: 4aps in Local Manufactu!ing2 Ta-le 15: S.)T (nalysis fo! Local Manufactu!ing of 9eceive! Tu-es2 Ta-le 16: &n"ian Manufactu!ing fo! #a!a-olic T!ough Cu!!ent Statusan" utu!e


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Scena!io +assuming at least 5?? M.Fyea! of CS# installationin &n"ia, 3? Ta-le 1>: 4aps in Local Manufactu!ing3? Ta-le 18: S.)T (nalysis fo! T!acing Device Manufactu!ing in &n"ia31 Ta-le 1: 4aps in Local Manufactu!ing32 Ta-le 2?: S.)T (nalysis fo! Local Ta-le 2>: S.)T (nalysis fo! Local Manufactu!ing fo! Ta-le 3>: (ction #lan on inancial #lanning of Su-si"ies an"

&ncentives 58 Ta-le 38: (ction #lan fo! #!omotion of 9BD an" &nnovation6? Ta-le 3: &n"ust!ySpecific (ctions to #!omote CS# Technologies63 Ta-le ;?: Linea! !esnel 9eflecto! =alue Chain>3 Ta-le ;1: #a!a-olic T!ough #lant =alue Chain #laye!s$ith a T!ac9eco!" of


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/uilt #!o%ects>5 Ta-le ;2: #a!a-olic T!ough Components =alue Chain>6 Ta-le ;3: #o$e! To$e! #lant =alue Chain>> Ta-le ;;: #o$e! To$e! Components =alue Chain>> Ta-le ;5: Dish 'ngine Sola! #lant =alue Chain> Ta-le ;6: Dish 'ngine Sola! Components =alue Chain> Ta-le ;>: #o$e! &slan" Components =alue Chain> Ta-le ;8: Components =alue Chain fo! The!mal 'ne!gy Sto!age8? Ta-le ;: Total &nstalle" Capacity an" #!o%ect #ipeline .o!l"$i"e81 Ta-le 5?: **SM Ta!gets8

Ta-le 51: Main Cha!acte!istics fo! the #a!a-olic T!ough iel"&mplemente" in a


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Ta-le 52: Main Cha!acte!istics an" Simulation 9esults fo! the Case 15Ta-le 53: Main Cha!acte!istics an" Simulation 9esults fo! the Case 26Ta-le 5;: Main Cha!acte!istics an" Simulation 9esults fo! the Case 36Ta-le 55: inancial Calculations fo! a CS#/iomass : &nvestment Costs fo! the 3? M. L #lant $ithout The!malSto!age 1?;Ta-le 58: Summa!y Ta-le of the Main acto!s Consi"e!e" fo! the'stimation of the Cost 'volution fo! Linea! !esnel 9eflecto! Technology1?8Ta-le 5: &nvestment Costs fo! the 5? M. #T #lant $ith 6 M. C9 #lant $ith 15 Ta-le 63: &nvestment Costs fo! the 1> M. C9 #lant $ithout The!malSto!age 118Ta-le 6;: Summa!y Ta-le of the Main acto!s Consi"e!e" fo! the'stimation of the Cost 'volution fo! C9 Technology122Ta-le 65: &nvestment Costs fo! the 1? M. #D #lant $ithout The!malSto!age 123Ta-le 66: Summa!y Ta-le of the Main acto!s Consi"e!e" fo! the'stimation of the Cost 'volution fo! #D Technology126Ta-le 6>: '7te!nal an" &nte!nal acto!s Consi"e!e" at theHuestionnai!e 128Ta-le 68: *um-e! of =alue Chain #laye!s &nvolve" in the #!ima!y9esea!ch 128Ta-le 6: List of Companies &nte!vie$e"131Ta-le >?: #hase.ise Capacity (""itions fo! CS# Technologies in&n"ia

)ptimistic Scena!io132Ta-le >1: Capacity (""ition pe! Gea! ove! the Th!ee #hases of **SM133Ta-le >2: Scena!ios Consi"e!e" fo! the (nalysis133Ta-le >3: Ta-ulate" 9esults of the Huestions (se" to ComponentManufactu!e!s 135Ta-le >;: '7pecte" #e!cent Cost 9e"uction in #hase && an" #hase &&&135


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Ta-le >5: Cost in 9s C!o!es pe! M. in 'ach #hase of **SM136Ta-le >6: Ma!et Si@e in 9s C!o!es pe! Gea! in 'ach #hase of **SM136Ta-le >>: '7pecte" &n"igeni@ation of Components +#e!centage, fo! Diffe!ent Scena!ios13>Ta-le >8: Di!ect an" &n"i!ect 'conomic &mpact138Ta-le >: o- C!eation pe! Gea! fo! Const!uction )BM an" Local Manufactu!ing fo! the Th!ee #ossi-le Scena!ios13

viii Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in&n"ia (cno$le"gments

This stu"y $as p!epa!e" -y a .o!l" /an team le" -y *ataliya ulicheno+(f!ica Sustaina-le Development 'ne!gy E(T41, an" (shish hanna +South (sia Sustaina-leDevelopment 'ne!gyES(SD',0 The .o!l" /an p!o%ect team consiste" of Chan"!asee!enSu-!amaniam +S(SD', Mani hu!ana +S(SD', anv 4a!g +S(SD', an" 9uchi Soni+Sustaina-le 'ne!gy nitES'4'*,0

The team is also g!ateful to the pee! !evie$e!s E Chan"!asea!4ovin"a!a%alu +&nte!national inance Co!po!ation South (sia, an" 9oge! Coma Cunill +Mi""le 'ast an"*o!th (f!ica 9egional St!ategy B #!og!ams M*(9S, E fo! thei! insightful inputs0 .eespecially $ish to than yoti Shula +Secto! Manage!IS(SD', fo! he! const!uctivegui"ance an" valua-le suppo!t "u!ing the "elive!y of the !epo!t0

The "es stu"y inputs fo! the stu"y $e!e p!ovi"e" -y a conso!tium ofconsultants inclu"ing Gnfiniti 'nginee!ing Se!vice *i7us (Aua MC4 an" *ational 9ene$a-le

'ne!gy Cent!e +C'*'9,0 They also inte!acte" $ith CS# "evelope!s an" othe! in"ust!ystaehol"e!s to sha!e "ata an" fi!sthan" e7pe!iences0

&n a""ition the team $oul" lie to than the counte!pa!ts in theMinist!y of *e$ an" 9ene$a-le 'ne!gy +M*9', E M!0 40/0 #!a"han M!0 Ta!un apoo! an" D!0(shvini uma! E $ho p!ovi"e" gui"ance an" technical inputs th!ough the assignment0


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This team is g!ateful fo! the fun"ing !eceive" f!om 'ne!gy Secto!Management (ssistance #!og!am +'SM(#, fo! the stu"y0

i7 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia (c!onyms an" (--!eviations

(D/ (sian Development /an /)# /alance of plant cape7 Capital e7pen"itu!e CCD Concessional customs "uty CDT& Spanish Cent!e fo! &n"ust!ial Technological Development

C'( Cent!al 'lect!icity (utho!ity C'*'9 Cent!o *acional "e 'ne!gJas 9enova-les +*ational 9ene$a-le'ne!gy Cent!e, C'9C Cent!al 'lect!icity 9egulato!y Commission C&& Confe"e!ation of &n"ian &n"ust!y C9 Cent!al !eceive! C9S Cent!al !eceive! system CS# Concent!ating sola! po$e! CT( Co!po!aciJKn TecnolJKgica "e (n"alucJa C Capacity tili@ation acto! D*& Di!ect no!mal i!!a"iance DS4 Di!ect steam gene!ation ''( 'gyptian 'lect!ic (utho!ity '#C 'nginee!ing p!ocu!ement an" const!uction '#CM 'nginee!ing p!ocu!ement const!uction management '9M '9M #o$e! '9 'u!o D& o!eign "i!ect investment

7 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia &T ee"in ta!iff 4/& 4ene!ation /ase" &ncentive

4D# 4!oss "omestic p!o"uct 4. 4iga$att


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&MD &n"ia Meteo!ological Depa!tment &*9 &n"ian 9upee &ntellectual #!ope!ty &9'D( &n"ian 9ene$a-le 'ne!gy Development (gency &S) &nte!national )!gani@ation fo! Stan"a!"i@ation &TC &nvestment Ta7 C!e"it &TT &nte!national Telephone B Teleg!aph **SM a$aha!lal *eh!u *ational Sola! Mission +*ational Sola!Mission, = oint ventu!e .h ilo$atthou! LC)' Leveli@e" cost of ene!gy L Linea! !esnel L9 Linea! !esnel !eflecto! L&C Life &nsu!ance Co!po!ation of &n"ia LBTEM


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#D #a!a-olic "ish#C #o$e! inance Co!po!ation Limite"#4 #o$e! gene!ation##( #o$e! pu!chase ag!eement### #u-licp!ivate pa!tne!ship#T #a!a-olic t!ough#TC #a!a-olic t!ough collecto!#TD #o$e! t!ansmission an" "ist!i-ution#T9 #o$e! to$e! !eceive!#= #hotovoltaic+s,9/& 9ese!ve /an of &n"ia9'C 9ene$a-le ene!gy ce!tificate9M 9a$ mate!ial9)' 9etu!n on 'Auity9#) 9ene$a-le #u!chase )-ligation9s &n"ian !upeeS'C Secu!ities an" '7change CommissionS'S Sti!ling 'ne!gy SystemsS'S& Sola! 'ne!gy Society of &n"iaS'' Sola! ene!gy ente!p!ise @one

S&D/& Small &n"ust!ies Development /an of &n"iaSM(4 Sola! Millennium (4SS4 Sola! steam gene!ato!S.)T St!engths $eanesses oppo!tunities an" th!eatsT(DM T!acing an" "!ive mechanismT'9& The 'ne!gy an" 9esou!ces &nstituteT'S The!mal ene!gy sto!age#'S nive!sity of #et!oleum an" 'ne!gy Stu"iesS 0S0 Dolla!SD)' S Depa!tment of 'ne!gy.(CC .eighte" ave!age cost of capital

7ii Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in&n"ia '7ecutive Summa!y

The specific o-%ective of the stu"y is to assess the potential of&n"iaNs in"ust!ies to set up a manufactu!ing -ase fo! p!o"uction of Concent!ating Sola! #o$e! +CS#,technology

components an" eAuipment0 The stu"y assesses competitive positioning an"potential of &n"ian companies in the manufactu!ing of ey CS# components0 &t p!oposesan action plan to help "evelop this potential an" evaluate the !esulting economic-enefits0 This !epo!t inclu"es the follo$ing activities:

g (ssessment of the competitive position of in"ust!ies in &n"ia tosuppo!t the "evelopment


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of CS# technologies g 'valuation of sho!t me"ium an" longte!m economic -enefits of thec!eation of a

local manufactu!ing -ase g (ction plan to stimulate local manufactu!ing of CS# technologycomponents an" eAuipment

*ee" to Suppo!t CS# #!o%ects

(mi"st the success of sola! #= p!o%ects in &n"ia the CS# technology alsop!ovi"es a compelling case fo! suppo!t -y the gove!nment -ecause of the follo$ing technological!easons:

g (mong Sola! CS# is the only technoeconomically via-le option atp!esent $hich has a sto!age option that can ena-le sola! ene!gy to -ecome "ispatcha-le"epen"a-le $hich can meet -oth the pea -ase loa"0

g The conve!sion of sola! to steam is a !elatively highefficiencyp!ocess +vs0 the conve!sion efficiency of #=, an" this can effectively supplement the fossilfuelsF!ene$a-le fuel such as -iomass thus cont!i-uting to ove!all ene!gy secu!ity of thecount!y0

1 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia


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Competitive #osition of &n"ust!ies in &n"ia to Suppo!t the Development ofCS# Technologies

The t$o "!ive!s consi"e!e" in the cost evolution mo"el a!e e7pe!ience an"technology-!eath!oughs0 &n a""ition fo! each of these technologies the main acto!s ofthe plantsN an"componentsN value chain have -een i"entifie" in this !epo!t0 &n the me"iumte!m &n"ia ise7pecte" to -ecome a ma%o! CS# playe! $o!l"$i"e0 &n"iaOs a$aha!lal *eh!u*ational Sola!Mission +**SM, inclu"es measu!es fo! !api"ly e7pan"ing the use ofphotovoltaic an" sola!the!mal systems in o!"e! to "!ive "o$n costs an" encou!age "omestic sola!manufactu!ing0The plan also p!oposes scaling up cent!ali@e" sola! the!mal po$e! gene!ation$ith the aimof achieving cost pa!ity $ith conventional g!i" po$e! -y 2?2? an" the fullnecessa!y ene!gyinf!ast!uctu!e -y 2?5?0 .ith the o-%ective of 2? 4. of sola! po$e! -y 2?22

an" a fi!st stepof 103 4. of sola! po$e! -y 2?13 this is the most am-itious sola! plan thatany count!y haslai" out so fa!0

o! the sola! plan to succee" e7isting &n"ian in"ust!ies have to i"entify theoppo!tunitiesan" !eact p!oactively to pa!ticipate significantly in supplying CS# componentsan" systems0Many t!a"itional in"ust!ies that coul" tae an active pa!t in CS# technology"evelopmenta!e automotive glass metal po$e! an" p!ocess heat machine tools an"!o-otics technicalsupe!vising elect!onics in"ust!y oil an" gas an" chemical in"ust!ies0 Manyof them onlynee" a mo"est effo!t to a"apt thei! manufactu!ing p!ocesses to the "eman"s ofthe CS#in"ust!y0 *onetheless the competition -et$een CS# playe!s $ill inc!ease infutu!e enla!gingthe nee" fo! 9BD activities to "evelop cheape! an" mo!e efficient components0That is $hycolla-o!ative !esea!ch -et$een p!ivate companies an" !esea!ch la-o!ato!ies isimpo!tant to"evelop the components an" systems that $ill help in !e"ucing the cost of CS#technologies0

To pe!fo!m an assessment of the competitive position of in"ust!ies in &n"ia to

suppo!t the"evelopment of CS# technologies a "etaile" analysis of the local in"ust!ialcapa-ilities$as ca!!ie" out fo! "iffe!ent ey components of CS# $hich inclu"e" anassessment of the!eAui!ements of components cu!!ent in"ust!ial capacity in &n"ia e7pecte"impacts on cost!e"uction as a !esult of local manufactu!ing !elative ma!et g!o$th an"ma!et "ynamics0 (


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st!engths $eanesses oppo!tunities an" th!eats +S.)T, analysis fo! localmanufactu!ing$as also pe!fo!me"0 ( p!opose" timeline fo! in"igeni@ation of each eycomponent $as also"evelope" as sho$n on page no0 30

n"e! **SM #hase 1 a significant !e"uction of ta!iffs has -een achieve"-ecause of theimplementation of a !eve!se" auction -i""ing mechanism com-ine" $ith theapp!oachtaen -y the sola! p!o%ect "evelope!s $hich is a com-ination of -oth locallymanufactu!e"an" impo!te" components0 o! e7ample the "evelope!s $ent in fo! "omesticst!uctu!alcivil an" mechanical items $hile limiting the impo!ts to ey componentssuch asmi!!o!s !eceive! tu-es heat t!ansfe! flui" +


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in"igeni@ation in !ame an" Suppo!t St!uctu!ephase && 9eceive! tu-es #T an" L

g 9eceive! Tu-es 9eceive!s fo! C9 an" #D 5 pe!cent an" 8? pe!centof the components use" in the Spanish CS# plants come f!om national manufactu!ing o! a!e"evelope" $ith national technology0 To !each this high level of "omestic p!o"uction theSpanish in"ust!y


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-enefite" f!om incentives ena-ling the "evelopment of manufactu!ingplants com-ine" $ith othe! mechanisms focusing on %o- c!eation an" p!omoting the "evelopment ofinnovative companies0 Successful e7amples of CS# manufactu!ing plants that have also-een -uilt in 4e!many Spain an" the nite" States $hich a!e !epo!te" in this "ocument0

Local economic -enefits !esulting f!om in"ust!y "evelopment in &n"iahave -een analyse" using a "ynamic economic mo"el $ith ma!et scena!ios an"!efe!ence plants $ith assumptions !ega!"ing the local sha!e of a CS# "eployment an"manufactu!ing of components0 The !esults a!e agg!egate" -y ave!age sha!e of localmanufactu!ing in &n"ia economic impact on 4D# la-ou! impact +that is %o- c!eation, an" fo!eignt!a"e impact0

The p!o%ections in"icate that the potential cost !e"uctions in sola! fiel"

components a!e la!ge $hich $oul" -e le" -y the savings !esulting f!om localmanufactu!ing lo$e! customs "uties fo! eAuipment an" !a$ o! p!ocesse" mate!ial an" the lo$e! cost oflogistics an"

3 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia la-ou!0 o! othe! components cost !e"uctions coul" mate!iali@e-ecause the inc!ease in ma!et si@e an" the passage of time in yea!s $oul" !esult ineconomies of scale0 &n cases $he!e the c!itical minimum ma!et si@e is not !eache" cost!e"uctions !esulting f!om local manufactu!ing have -een suita-ly scale" "o$n0 ( total !e"uctionof app!o7imately 1? pe!cent has -een p!o%ecte" fo! components taing into account thelea!ning cu!ves -y 2?22 if volume g!o$th is ensu!e" +)ptimistic Scena!io,0 This has -een!e"uce" to 3 pe!cent in the othe! e7t!eme $he!e the volume g!o$th is small +#essimisticScena!io,0 ( mo"e!ate scena!io has also -een p!o%ecte"0

'ffects on "i!ect an" in"i!ect economic values a!e calculate" ina-solute num-e!s fo! each scena!io0 &n a""ition to local manufactu!ing of components an"const!uction of the plant it is also assume" that '#C an" )BM $ill cont!i-ute to the economicimpact of CS# plants0 The economic impact is st!ongly !elate" to the ma!et "eman" fo! CS#technologies0 The main !esults of this stu"y a!e p!esente" -elo$0


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Scena!io &nstalle" Local Sha!e in CostC!eate" o-s Capacity Manufactu!ing 9e"uctionScena!io ( 2??? M. >6Q 13Q1???+pessimistic,Scena!io / 6??? M. 83Q 16Q58???+mo"e!ate,Scena!io C 1???? M. ?Q 2?Q6???+optimistic,

o!eign t!a"e in te!ms of gene!ate" e7po!ts is estimate" only fo!CS# sola! fiel" an" the!mal conve!sion specific components0 &t is assume" that the!e $ill -e noa""itional e7po!ts fo! conventional elements such as po$e! -locs an" elect!ical conve!sion-locs !esulting f!om the p!o%ecte" g!o$th of the sola! the!mal in"ust!y0

Consi"e!ation has also -een given to the e7pecte" lea!ning cu!ve an" the lea" time fo! sta-ili@ationthat $ill -e !eAui!e" fo! the manufactu!ing of components in &n"ia0 Minimum ma!et "eman" fo!manufactu!ing also plays an impo!tant !ole -ecause this facto! $ill -e "ecisive fo!"ete!mining p!ope! timing to sta!t p!o"uction in &n"ia0 o! this !eason in scena!ios (an" / e7po!ts a!e not consi"e!e" -ecause $ith t$o technologies competing fo! thema!etIpa!a-olic t!ough an" cent!al !eceive!Ithe "eman" $ill -e %ust a"eAuate to %ustifyfullfle"ge" p!o"uction of some components fo! each technology -ut not sufficient to sta!te7po!ts0 &n this !epo!t e7po!ts have -een consi"e!e" mainly fo! the cu!!ently comme!ciallymatu!e #T technology0 (ssuming g!o$th in e7po!ts f!om ;?? M. pe! yea! in 2?22 to ?? M. pe!yea! in 2?3? the e7po!t ma!et is estimate" to -e a-out 9s0 5??? c!o!es in 2?229s0 8??? c!o!es in 2?25 an" 9s0 115?? c!o!es in 2?3? !espectively0

(ction #lan to Stimulate Local Manufactu!ing of CS# Components an"'Auipment

(s pa!t of the stu"y the t$o $o!shops $e!e con"ucte" that -!ought

togethe! !ep!esentatives f!om in"ust!y an" gove!nment an" the in"ust!y e7pectations to %umpsta!t ma!et "evelopment of CS# p!o%ects an" plant components $e!e "iscusse"0These "iscussions a!e !eflecte" in the !epo!t0 To a""!ess the in"ust!y e7pectationsthe !epo!t suggests a comp!ehensive action plan as sho$n on page no0 50


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; Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e!#!o%ects in &n"ia Section (ction #lan Suppo!tiveG1 G2 G3 G; G5 9esponsi-ility Long te!m Gea!$ise allocation fo! CS# M*9' policy po$e! p!o%ects f!ame$o! 9egulato!y suppo!t B ta!iff M*9' B C'9C fo! CS# mechanism fo! sola! the!mal "evelopment hy-!i" p!o%ects 9ene$a-le 'ne!gy Ce!tificate C'9C mechanism fo! Sola! The!mal ene!gy gene!ation #lanning ("eAuate payment secu!ity M)FM*9' fo! payment mechanism +using the Coal cess secu!ity un"s,0 Lo$ cost 'na-lement of lo$ cost M)

financing financing fo! CS# f!om -ans B sepa!ate e7posu!e limits fo! CS# p!o%ects0 inancial Time-oun" an" milestone M) planning of -ase" CCD an" @e!o su-si"ies an" e7cise "uties fo! mate!ials incentives an" components use" fo! manufactu!ing of sola! systems an" "evelopment of p!o%ects iscal incentives fo! sponso!e" M) !esea!ch an" in house 9BD e7pen"itu!e Mechanism Development an" maintenance M*9' fo! p!omotion of a pu-lic !eposito!y of of 9BD an" no$le"ge innovation Development of Auality an" M*9' specification stan"a!"s 'sta-lishment of a 9BD M*9' f!ame$o! on a ### -asis Development of sola! ene!gy M*9' cou!ses Sponso!e" !esea!ch p!o%ects in M*9' e"ucational institutions

The !esponsi-ilities a!e assigne" $ithin the cu!!ent ope!atinginstitutional f!ame$o! of

the cent!al an" state gove!nments0 The secon" an" thi!" phases of the**SM shoul" p!ovi"e cla!ity in the allocation of capacity fo! sola! the!maltechnologies ve!sus othe! sola! technologies fo! the ne7t 1? yea!s0

To offset the high capital costs !ep!esenting a la!ge f!action of theleveli@e" cost of ene!gy +LC)', in CS# plants the gove!nment shoul" focus its effo!t on esta-lishing ana"eAuate payment


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secu!ity mechanism couple" $ith lo$cost financing fo! CS#0 !om thetechnology pe!spective hy-!i" technologies E /iomass F coal inclu"ing gene!ation of pu!e steaman"


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D9&='FT9(C&*4 +C9, lo$ g #!omote 9BD fo!sola! senso! an" cont!olle! technology g #!omotecolla-o!ation $ith glo-al playe!s


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&n the long te!m $ith !e"uction in the sola! fiel" costs CS# $ill -ecomemo!e an" mo!e cost effective specifically $ithin the inte!me"iate an" -aseloa" ma!etsegments -ecause of the integ!ate" sto!age options0 CS# is the only sola! technology p!esentlythat can inco!po!ate the!mal sto!age solution maing CS# sola! po$e! "ispatcha-le an" thusmo!e cost effective to meet all segments of po$e! "eman"0

9ealistic potential e7ists fo! sola! the!mal technologies to mae animpo!tant cont!i-ution in meeting &n"iaNs ene!gy "eman" an" "ive!sifying the count!yNs po$e!gene!ation p!ofile0 4lo-al t!en"s an" actual p!ice "iscove!y in"icate that the LC)' f!om !ene$a-leoptions $ill continue to go "o$n $hile the cost of fossil fuels $ill continue to !ise an" the"eman"s fo! ene!gy in"epen"ence an" the g!o$ing a$a!eness of the !eal social an"envi!onmental costs of ene!gy

gene!ation $ill ensu!e that this potential is !eali@e"0

#otential also e7ists fo! the su-components of sola! the!mal systems to -emanufactu!e" in &n"ia in the sho!t me"ium an" long te!ms0 &n"ia has inhe!ent competitivea"vantages that $ill facilitate the t!ansition to -ecoming a ma%o! p!ovi"e! of sola!the!mal technologies0 The facto!s that coul" cont!i-ute to this inclu"e highly t!aine" enginee!ingstaff lo$ la-ou! costs an" an eme!ging "omestic ma!et0 These a!e some of the aspects that can -eleve!age" -y the &n"ian in"ust!y to lo$e! the capital costs fo! CS# plants the!e-y"ec!easing the LC)' an" "!iving the ma!et penet!ation of sola! technologies0

4ove!nment "evelope!s an" in"ust!y nee" to $o! togethe! to ensu!e avia-le path fo! sola! the!mal technology "evelopment -y

g c!eating a financial an" !egulato!y envi!onment that suppo!ts investment in 9BD g esta-lishment of financial an" political incentives fo! sustaina-le"evelopment g lo$e!ing the effective financial !iss fo! investo!s $hile facto!ingin the positive impacts

on the envi!onment imp!ovements in health the natu!al ha-itat an"the Auality of life that a!e associate" $ith !ene$a-le ene!gy in gene!al an" sola! the!maltechnologies in pa!ticula!0

> Development of Local Supply Chain


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The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia


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#a!t &(ssessment ofCS# #!o%ect #!ices an" Costs in &n"ia

8 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia 10 &nt!o"uction

&n the follo$ing section the fou! main Concent!ate" Sola! #o$e! +CS#,1technologies a!e p!esente" giving an insight into the value chain of systems an"components an" into the comme!cial p!o%ects an" pipeline0

The sola! spect!um may -e !oughly app!o7imate" -y the spect!um of a-lac-o"y at app!o7imately 5>>8 $hich means that sola! ene!gy has a ve!y highe7e!gy0 The sola! flu7 "ensity at the ea!thNs mean "istance +o! Rsola! constant , is a-out1366 .Fm20 Some of this is scatte!e" an" a-so!-e" as it passes th!ough the atmosphe!e so onlya!oun" 1 .Fm2 is inci"ent on the su!face of the ea!th at noon on a clou"less "ay0 Thismeans that the sola! !a"iation -y itself $oul" only heat a the!mal flui" to a !elatively lo$tempe!atu!e to achieve highe! sola! flu7es an" highe! tempe!atu!es sunlight must -econcent!ate"0

igu!e 1 sho$s the high potential of the sola! ene!gy in compa!ison $ithothe! ene!gy sou!ces0 Sola! !a"iation !eceive" in the $hole te!!est!ial su!face in oneyea! is !ep!esente" in this figu!e togethe! $ith all the no$n fossil fuel !ese!vesinclu"ing u!anium0 (nnual ene!gy consumption is also "epicte" in igu!e 10

This huge potential is "ist!i-ute" ove! the ea!th having "iffe!entinci"ence in specific locations "epen"ing on the latitu"e an" ave!age clou"iness fo! e7ample0These values can

va!y f!om 6>5 .hFm2Fyea! in the (!ctic islan"s to 2;?? .hFm2Fyea! insome locations such as the Saha!a0

Sola! ene!gy thus has t$o main cha!acte!istics: it is highly "ilute" an"highly va!ia-le0 1 &n this !epo!t CS# stan"s fo! Concent!ating Sola! The!mal #o$e! an"focuses only on the po$e! gene!ation aspect of sola!


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po$e!0 The !epo!t "iscusses only a g!oup of CS# technologies an" e7clu"esconcent!ating #=0

Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia


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igu!e 1:Compa!ison of Diffe!ent 'ne!gy Sou!ces .o!l"$i"e

Sou!ce: C'*'9

igu!e 2:Sola! 9esou!ces fo! CS# Technologies+D*& in .hFm2F"ay,

Sou!ce: .o!l" /an +2??6,

1? Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e!#!o%ects in &n"ia The -enefits of sola! po$e! a!e compelling: envi!onmental p!otectioneconomic g!o$th %o- c!eation ene!gy secu!ity an" !api" "eployment as $ell as the glo-alpotential fo! technology t!ansfe! an" innovation0 The un"e!lying a"vantage of sola! ene!gy is thatthe fuel is f!ee a-un"ant an" ine7hausti-le0 Sola! conve!sion technologies can -e applie"p!ope!ly in !egions $ith annual mean !a"iation values highe! than 1>5? .hFm2 pe!yea!0 Sola! the!mal po$e! has an impo!tant a"vantage in compa!ison to othe! !ene$a-leene!gies technologiesI an" that is its potential "ispatcha-ility0 o! many sola! the!maltechnologies it is possi-le to inclu"e an effective the!mal sto!age system o! a hy-!i" scheme $ithfossil fuels o! -iomass to avoi" inte!!uptions "u!ing t!ansient con"itions o! afte! sun"o$n0


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(s p!esente" in Ta-le 1 fou! CS# technologies a!e -eing cu!!ently"evelope" an" ope!ate": linea! !esnel !eflecto! +L, pa!a-olic t!ough +#T, po$e! to$e! systemo! cent!al !eceive! system +C9S, an" pa!a-olic "ishengine +#D,0 Ta-le 1: Main Cha!acte!istics of the ou! Main CS# Technologies Linea! Concent!ation Systems #ointocus Concent!ation Systems Linea! !esnel #o$e!To$e! #a!a-olic Dish )! #a!a-olic T!ough 9eflecto!System 'ngine +Sti!ling,

g L !eflecto! g #T systems concent!ate g (Cent!al 9ecieve! g #D systems consist of

concent!ating systems the sola! !a"iation systemuses mi!!o!s a mi!!o!e" "ish that use flat o! slightly $ith a pa!a-olashape" calle"heliostats $ith collect an" concent!ate cu!ve" mi!!o!s to focus mi!!o! onto a linea! t$oa7issunt!acing to sunlight onto a !eceive! sola! !a"iation onto a !eceive! locate" at its focusconcent!ate" sola! mounte" at the focal linea! !eceive!0 focal length0 !a"iationon a !eceive! point of the "ish0 g The #T system is the at thetop of a to$e!0 g The !eceive! is

p!e"ominant linea! g T$o maintechnical integ!ate" into a high system an" is the "esignscan -e efficiency engine +the most "evelope" an""istinguishe" "epen"ing Sti!ling engine is the comme!cially teste" on the$o!ing flui" most common type of CS# technology0 use":$ate!Fsteam an" heat engine use",0 moltensalts0

( "etaile" "esc!iption of comme!cially availa-le CS# technologies an"

thei! plant an" components value chain is p!ovi"e" in (ppen"i7 10

11 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia 20 (ssessment of Cost 9e"uction fo!


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CS# #!o%ects un"e! **SM

&n the follo$ing section the cost evolution an" -i" p!ice assessment fo!the fou! main CS# technologies a!e p!esente" in the conte7t of the complete" -i""ing fo!#hase& of the **SM0

.hile (ppen"i7 3 p!ovi"es info!mation on the cost evolution no!mallye7pecte" the p!ices of CS# p!o%ects in &n"ia Auote" -y the -i""e!s have evolve" in a uniAuemanne! an" a !e"uction of a-out 3>05 pe!cent ove! the !efe!ence p!o%ect costs has-eenseen in the ve!y fi!st !oun" of ;>? M. p!o%ects un"e! /atch & of #hase & of the **SM0 Thecont!acts $e!e a$a!"e" th!ough a p!ocess of a !eve!se auction -ase" on ta!iff-ase"competitive -i""ing0 Steep !e"uctions $e!e o-se!ve" in the offe!e" CS# p!ices facilitate"

th!ough a $i"e a!!ay of !egulato!y mechanisms "etaile" in (ppen"i7 ;0

.hile the Cent!al 'lect!icity 9egulato!y Commission +C'9C, ha" notifie" a-enchma! capital cost of 9s 15 c!o!esFM. of installe" capacity t!anslating to a-enchma! +fee" in ta!iff, ta!iff of 9s 1503?F.h +-ase" on petitions file" -y p!o%ect"evelope!s pu-lic consultations compa!ative stu"ies of inte!national p!o%ect costs an"a"%usting these costs to the local con"itions $he!e applica-le,0 /ecause of an ove!$helming!esponse of sola! p!o%ect "evelope!s $hich $oul" have !esulte" in capacity ove!supply the4ove!nment of &n"ia ha" to !eso!t to a competitive -i""ing p!ocess fo! the selection of p!o%ect"evelope!s0

Si7tyfive -i""e!s $e!e sho!tliste" totaling an installe" capacity of2811 M.0 The Minist!y of *e$ an" 9ene$a-le 'ne!gy +M*9', set a ceiling fo! su-mitting -i"s atthe ;>? M. planne" fo! cont!act a$a!"s0 Since the num-e! of -i""e!s fa! e7cee"e" thep!o%ect capacity to -e a$a!"e" the selection of the -i""e!s $as ca!!ie" out th!ough a!eve!se auction p!ocess $he!ein the -i""e!s $e!e ase" to p!ovi"e "iscounts against the C'9C

"ete!mine" ta!iff of 9s 1503?F.h0 &n o!"e! to p!event a"ventu!ous -i""ing the "iscounts to-e offe!e" $e!e line" to a""itional -an gua!antees "epen"ing on the Auantum of the"iscounts offe!e"0

12 Development of Local Supply Chain


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Su%ana 1? 15; Ma"hav #o$e!5 ? (!avali ;5 153 (le7 Spect!um25 ? 'ssa! #o$e! 1?? 153 &LS1? ? (CM' 5? 151 Su!ya =i"yut1? ? Ca!go 5? 1;? successful -i""e!s offe!e" "iscountsf!om 9s 30?>F.h



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to 9s ;082F.h0 Seven companies inclu"ing (-hi%eet Lanco an" 9eliance $e!eallocate"p!o%ects at a $eighte" ave!age p!ice of 9s0 110;8F .h0

The -i"s Auote" -y the "evelope!s a!e an in"ication that the -i""e!s gaveconsi"e!ationto the st!ategic impo!tance of ea!ly ent!ance to the ma!et an" $e!e a-le toleve!age -othinte!nal an" e7te!nal !esou!ces to competitively lo$e! offe! p!ices0 /ycont!ast the C'9Cp!ices might have also -een on a highe! si"e since a"%usting fee"in ta!iffclose to !eal p!ices!eAui!es !egula! a"%ustments -ase" on the e7pe!iences of implemente" p!o%ectsin a givencount!y envi!onment0 (s pe! the **SM timelines the "evelope!s have tocommission theplants -y May 2?130 'ven though all the p!o%ects have achieve" financiaclouse! it has -een!epo!te" that seve!al p!o%ects a!e facing implementation challenges !angingf!om financing

inaccu!ate D*& "ata +lea"ing to !eenginee!ing the sola! collecto! si@ing,supply chain etc0

201 'stimation of LC)' /ase" on /i" (nalysis

The ma%o! pa!amete!s that go into "ete!mination of a !ate of cost !ecove!y a!eas follo$s:

g #!o%ect costg &nte!est !atesg 9etu!n on eAuity +9)',g *et gene!ationg De-ttoeAuity !atio

(s pe! the C'9C no!ms fo! these pa!amete!s cost of elect!icity ta!iff fo! ap!o%ect $ith theinvestment cost of 9s0 15 c!o!esFM. t!anslates into 9s0 1503?F.h0 Consi"e!ingthe sameC'9C assumptions the p!o%ect costs fo! a successful -i""e! $oul" t!anslateinto 9s0 1? to9s0 12 c!o!esFM. if the -i""e! accepts a lo$e! 9)' of 1; pe!cent as againstthe C'9C no!mof 1 pe!cent0 &n a""ition the "evelope!s may have facto!e" in on -alancesheet financinga fo!eign loan o! "omestic loan at a lo$e! inte!est !ate $hich $oul" allo$a!!iving at theaccepta-le inte!nal !ate of !etu!n at a p!o%ect cost assume" -y C'9C0

Consi"e!ing these an"othe! facto!s it can -e infe!!e" that the "evelope!s $oul" have estimate" ap!o%ect cost of-et$een 9s0 13 c!o!esFM. an" 9s0 1; c!o!esFM.0

The CS# p!o%ects in &n"ia a!e cu!!ently in the e7ecution phase an" most ofthe p!o%ectshave achieve" financial closu!e an" have commence" const!uction0 The!e a!e!epo!ts that


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seve!al "evelope!s a!e e7pe!iencing "elays in p!o%ect const!uction "ue to lacof e7pe!ience0u!the! the lac of availa-ility of the


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Sola! collection system 1?60>;>10; 1>608 Mi!!o!s 1>03>606 ; Suppo!t st!uctu!es 3;0>15301 ; D!ive mechanisms 308160> ;08 Lan" leveling 1?0;;50 15 oun"ations 1>03>606 2; (ssem-ly 23031?208 35 The!mal conve!sion system ;3031105 13? The!mal oil 3021; 2205 9eceive! tu-es 180;8102 6?

/all %oints ?06206 2 #iping valves an" spa!e pa!ts 10805 5 )il fo!$a!"ing si" +filte!s piping 120;55 35 pumps tans assem-ly, )il pu!ification system ?0520; 1 i!e p!otection system 106>02 2 &ne!ti@ation system ?0830> 205 *atu!al 4as /oile!s 308160> ? 'lect!ical conve!sion system ;0;;1>01 1505 )ilFsteam heat e7change! 1>02>508 3? #o$e! -loc 3>0216;03 65 /alance of plant +/)#, 250>11308 >5 Civil $o! 1;036302 2505 #!o%ect management an" '#C ;;1;06 550>3

#!o%ect management 20105 5 '#C +1>Q, ;1018502 5?0>3 T)T(L 2880;12>;06 5580?3 2 '#C Management is a consultancy cont!act $he!e the consulting fi!m onlymanages the enginee!ing p!ocu!ement an"


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const!uction aspects $ith limite" pe!fo!mance gua!antees0 The "evelope!un"e!taes the p!o%ect pe!fo!mance !is0



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/ase" on the num-e!s in Ta-le 3 an estimate" plant cost if the '#C isca!!ie" out on apacage -asis an" not a tu!ney -asis an" negotiating system$ise p!ices an"!esult in a plantcost of 9s0 558 c!o!es fo! 5? M. CS# t!ough plant +$ithout sto!age, o! 9s0 11c!o!esFM.0

203 9easons fo!


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co!!espon"ing ceiling !ates !eflecte" the then level of technology costp!o%ection info!mation0

Since then the sola! #= p!o%ect costs have come "o$n sha!ply to a level of9s0 >05 c!o!esFM. $he!eas "espite the significant p!ice lo$e!ing cost !e"uction p!opose" -ythe "omestic"evelope!s visJ vis inte!national p!o%ect costs CS# p!o%ects $e!e stillp!ice" significantlyhighe! at a-out 9s0 11E13 c!o!esFM.0

205 utu!e CS# Cost 9e"uction #ossi-ility

To a""!ess the issue of the level of cost !e"uction achieva-le in the secon"phase one nee"sto e7amine the cost "!ive!s in "etail to see $hethe! locali@ation can "!ive"o$n the costso! not0 Cu!!ently the components -eing impo!te" in the case of the t!oughtechnology a!e

16 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in&n"ia mi!!o!s


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t!ough technology0 &n the case of the to$e! o! CL9 technology the onlycomponent that may nee" to -e impo!te" is the flat mi!!o! an" steam tu!-ine $hich $illt!anslate to a-out 2? pe!cent of the p!o%ect cost0 The manufactu!e of lo$i!on glass-ase"mi!!o!s involves emptying the fu!nace of the ea!lie! cha!ge an" !eplacing it $ith a ne$cha!ge of lo$i!on san"0 'mptying the fu!nace an" achieving the Auality nee"e" fo! sola!application taes a!oun" 1? "ays0 /ecause the volumes a!e lo$ the mi!!o! manufactu!e!stypically sche"ule the manufactu!ing t$ice a yea!0 nless the!e is sufficient volume themi!!o! manufactu!e!s may fin" it mo!e costeffective to impo!t the mi!!o!s than to manufactu!ethem locally0 &t is un"e!stoo" that /o!osil has a "e"icate" lo$i!on glass manufactu!ingfacility that can cate! to a-out 6?? M. in a yea!0

(ssuming that local manufactu!ing $oul" !esult at -est in a 25 pe!cent!e"uction of ce!tain eAuipment costs this $oul" t!anslate into a !e"uction of 5Epe!cent of the p!o%ect cost0 The!efo!e in the ne7t !oun" of CS# solicitation the p!o%ect -i"p!ices fo! sola! the!mal p!o%ects a!e liely to come "o$n to a-out 9s0 c!o!esFM. in the-est case scena!io $hich is ve!y competitive in the CS# fiel" in compa!ison $ith glo-al CS#costs0 The CS# plants -ase" on the to$e! technology can come "o$n even fu!the! to alevel of 9s0 805 c!o!esF M. since in the case of the to$e! technology e7cept fo! the mi!!o! allothe! item can -e fa-!icate" locally0


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1> Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia


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#a!t &&Competitive #ositioning ofLocal Manufactu!ing inCS# Technologies 30 #!esent Scena!io of CS# Local Manufactu!ing in &n"ia

The follo$ing section ela-o!ates on the cu!!ent scena!io of localmanufactu!ing in &n"ia0

301 CS# =alue Chain

The &n"ian CS# value chain in igu!e 3 "epicts the playe!s involve" f!om the"esignstage to the en" use!s0 Cu!!ently the ma%o! pa!t of activity in &n"ia isgea!e" to$a!" CS#plant "evelope!s $ho a!e colla-o!ating $ith inte!national CS# technology

p!ovi"e!s'#C cont!acto!s component manufactu!e!s an" &n"ian po$e! gene!ationeAuipmentmanufactu!e!s to set up CS# plants in 9a%asthan an" 4u%a!at0igu!e 3:&llust!ation of CS# Staehol"e!s in &n"ia **SM an" State Sola! #olicy !ame$o!s #olicy an" 9egulato!y!ame$o! -y C'9C an" S'9C Sola! iel" Component Manufactu!e!

The!mal Conve!sion an"#o$e! T!a"ing Sto!age Manufactu!e!sCompanies

#o$e! 4ene!ation an" Cont!ol CST# *==*#o$e! T!ansmission 'Auipment Manufactu!e!s Develope!s Companies

Technical Design an" Const!uction #a!tne!s#o$e! Dist!i-ution

Companies 9esea!ch B Development 'n" se!s*ote: #!esently the *SM is limite" to C'9C an" *==*Sou!ce: (H( MC4 +2?11,


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Ta-le ;:&n"ust!y 4!oups an" )the! )!gani@ations &"entifie" as ey Staehol"e!s &*DST9G 49)#S)T


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g &)T (n$esha 'ng#tv0 Lt"0 g lagsol +#T,g 4'& #o$e! Lt"0

g Siemens +#T,g /


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g Tu!-oTech g /!ightsou!ceg L(*C) g Ma7$att g T!iveni

302 S.)T (nalysis of CS# Component Manufactu!ing &n"ust!y

( S.)T analysis of the CS# component manufactu!ing in"ust!y is given-elo$0

Ta-le >: S.)T (nalysis fo! Local Manufactu!ing fo! CS# Components

St!engths .eanesses g St!ong an" esta-lishe" !elate" in"ust!ies in g 9elative$eanesses in technologies fo! CS# plant

manufactu!ing in most of the components of "evelopment an"component manufactu!ing0 the value chainIglass p!ecision eAuipment an" g 4aps in

inf!ast!uctu!e an" unce!tain gove!nment tu!-ines0 suppo!t fo!pe!fo!ming local 9BD fo! ne$ an" eme!ging g #!io! e7pe!ience in "eveloping sille" manpo$e! technologies0 an" !esou!ces th!ough a la!ge num-e! of g


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fuels0 g /u!eauc!aticslo$ !esponse in the p!ovision of essentials

such as $ate!po$e! lines !oa"s app!ovals an" facilities0 g =e!y tightp!o%ect completion time lines +2; months, fo!

such ne$technologies $ith long lea" time fo! supply of mate!ials +fo!tu!-ines it is 18 months,0

21 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia 303 #a!ticipation of 9elate" '7isting Local &n"ust!ies inSupplying CS# Components

an" Systems

&n the me"ium time !ange &n"ia is e7pecte" to -ecome a ma%o!CS# playe! -ehin" the nite" States an" *o!th (f!ica an" $ith a mo!e p!ominent !olethan China as "epicte" in the igu!e ; -elo$0

igu!e ;: #!o"uction an" Consumption of CS# 'lect!icity -y 2?5? +T.h,

16?? 1;?? 12?? 1???T.h

8?? 6?? ;?? 2?? ? *o!th South Mi""le China (f!ica 'U Tu!ey &n"ia#acific Cent!al 9ussia

(me!ica (me!ica 'ast (sia Consumption #!o"uction

&n"iaNs *ational Sola! Mission inclu"es measu!es aiming at"!iving "o$n costs an" encou!aging "omestic sola! manufactu!ing in o!"e! to !api"lye7pan" the use of #= an"


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CS# systems0 The plan also p!oposes scaling up cent!ali@e" sola!the!mal po$e! gene!ation $ith the aim of achieving cost pa!ity $ith conventional g!i"po$e! -y 2?2? an" the full necessa!y ene!gy inf!ast!uctu!e -y 2?5?0 .ith the o-%ective of2? 4. of sola! po$e! -y 2?22 an" a fi!st step of 103 4. of sola! po$e! -y 2?13 +101 4.g!i"connecte" an" ?02 4. offg!i", this is the most am-itious sola! plan that anycount!y has lai" out so fa!0

To -!ing this sola! plan to success e7isting &n"ian in"ust!ieshave to -e incentivi@e" to pa!ticipate significantly in supplying CS# components an"systems0 Many t!a"itional in"ust!ies that coul" tae an active pa!t in CS# technology"evelopment have -een i"entifie"0 Most of them nee" only a mo"est effo!t to a"apt thei! p!o"uctsan" manufactu!ing p!ocesses to meet the "eman" of the CS# in"ust!y0 Ta-le 8 sho$s e7amples

of t!a"itional in"ust!ies that a!e o! coul" -e successfully involve" as componentmanufactu!e!s fo! the CS# in"ust!y0 &n pa!ticula! the mass p!o"uction p!ocesses use" in theautomotive in"ust!y coul" -e implemente" fo! CS# component manufactu!ing0

/esi"es the in"ust!ies mentione" in Ta-le 8 othe! t!a"itionalin"ust!ies coul" also ente! the CS# ma!et:

g Technical supe!vising companies a!e a-le to achieve a highAuality of cont!ol to !e"uce !iss specifically in the scaling p!ocess -y using a"vance"met!ology techniAues such as a!tificial vision0

22 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola!#o$e! #!o%ects in &n"ia g 'lect!onics in"ust!y $ith seve!al lea"ing companies -ase" in &n"iauses glasstometal seals in T= catho"e !ay tu-es0 These seals a!e of special impo!tancein the manufactu!ing

p!ocess of #T !eceive! tu-es0 g


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manufactu!ing p!ocess of #T !eceive! tu-es0

Ta-le 8: T!a"itional &n"ust!ies #otentially &nvolve" in CS# &n"ust!y an"Components Manufactu!e" in utu!e

'&ST&*4 &*DST9G C)M#)*'*TS#)T'*T&(L SCC'S'S (T)M)T&=' 'ngines g Sene!+Sene!T!ough, e!!ostaal+$ith Clevelan" automotive in"ust!y, S'S +$ith4M, 4L(SS Mi!!o!s gla-eg 9ioglass Saint4o-ain 4ua!"ian M'T(L St!uctu!es

g ShuffSteelFS'S 4ossame!F(cciona #).'9 (*D #9)C'SS


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them $e!e a-le to g!a- significant ma!et sha!es0 *onetheless thecompetition -et$een CS# playe!s $ill inc!ease enla!ging the nee" fo! 9BD activities to "evelopcheape! an" mo!e efficient components0 That is $hy !esea!ch colla-o!ations -et$een p!ivatecompanies an" !esea!ch la-o!ato!ies a!e a ey facto! in "eveloping the components an"systems that $ill -!ing CS# technologies to success0

23 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia ;0 (nalysis of Manufactu!ing Capa-ilities of Specific Components

This chapte! ela-o!ates the manufactu!ing capa-ilities fo! specific CS#components0

;01 Mi!!o! Manufactu!ing &n"ust!y

The follo$ing section "etails out the mi!!o! manufactu!ing in"ust!y in&n"ia0

Manufactu!ing Capa-ility 9eAui!ements

Mi!!o!s use" in CS# plants a!e "iffe!ent f!om t!a"itional mi!!o!s in!eflectivity "u!a-ility an" st!ength0 The fa-!ication of the nee"e" e7t!a clea! glass !eAui!eslo$fe!!ous san" that is not easily availa-le in &n"ia0 u!the!mo!e this glass has no othe!application in &n"ia an" the!efo!e must -e ma"e specifically fo! sola! CS#s0

&n"ust!y St!uctu!e

The glass in"ust!y in &n"ia has a p!o"uction capacity of a!oun" ?068Mtons pe! yea!0 #!o"uction of float glass is a-out ?051 Mtons $hich is nea!ly >5 pe!centof the total glass p!o"uction in &n"ia0 Si7ty pe!cent of the $o!l"Ns highAuality floatglass is p!o"uce" -y fou!

companies: (sahi *S4 4!oup +#ilington, Saint 4o-ain an" 4ua!"ian0sing a metali@e" polyme! film that can -e laminate" to an aluminium su-st!ate Syfueloffe!s a competing technology $ith simila! functionality0

2; Development of Local Supply Chain


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The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia Ta-le : Ma%o! Manufactu!e!s of Mi!!o!s in &n"ia

#L(G'9 #9)&L' ST0 4)/(&* ?? tonsF"ay0 (&S loat 4lasscomman"s a nea!ly 2Q sha!e of the &n"ian float glass ma!et0

4(9(T 4u%a!at 4ua!"ian Limite" is a %oint ventu!ecompany that has set up a float glass plant in 4(9D&(* &n"ia in technical an" financial colla-o!ation$ith 4ua!"ian &n"ust!ies Co!p0 S(0 The facto!y is set up in &n"ia at =illage on"h in/ha!uch "ist!ict of 4u%a!at0 44L cu!!ently maes float glass an" mi!!o! glass at a floatline $ith 63? tonsF"ay of pull tone capacity an" ;02 Mm2Fyea! mi!!o! p!o"uction facility0 SG'L sing a metali@e" polyme! film that can -elaminate" to an aluminum su-st!ate Syfuel offe!s a competing technology $ithsimila! functionality0 Syfuel has signe" a Memo!an"um of n"e!stan"ing +M), $ith Megha'nginee!ing an" &nf!ast!uctu!es Limite" +M'&L, !ega!"ing the use of its #Tcollecto! in CS# p!o%ects +M'&L has -een a$a!"e" 5? M. in #hase & of the **SM scheme,0 3M 3M also manufactu!es polyme! film -ase" mi!!o!s0

Ta-le 1?: 4aps in Local Manufactu!ing

4(#S#)SS&/L' S)LT&)* g


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Cost !e"uction -ecause of local manufactu!ing is e7pecte" to -e in the!ange of 1? pe!cent -ut this may !eAui!e the "evelopment of local glass han"ling an"logistics sills0 Speciali@e" tools such as speciali@e" t!ucs $ith ai! suspension an" customtailo!e"steel f!ames fo! mi!!o! t!anspo!tation shoul" -e p!ovi"e" -y the manufactu!e!s0 The!e"uction can -e att!i-ute" to lo$e! shipment costs lo$e! la-o! costs an" ease ofhan"ling0


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&*='STM'*T +9s0 c!o!es, 12E1; 6?12?

&f the float glass manufactu!ing facility al!ea"y e7ists only the!a$ mate!ial has to -e impo!te" so that e7t!a clea! glass can -e ma"e0 ( S.)T analysis ofthe local manufactu!ing capa-ility of mi!!o!s is given -elo$0

Ta-le 12:S.)T (nalysis fo! Local Manufactu!ing of Mi!!o!s

St!engths .eanessesg '7isting set up of float glass manufactu!ing g


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Manufactu!ing Capa-ility 9eAui!ements fo! #a!a-olic T!ough Collecto!s

Suppo!t st!uctu!es inclu"e mi!!o! suppo!t pylons cent!al stem an"suppo!t a!ms0 The concent!ato! mi!!o!s a!e installe" on a !igi" metal st!uctu!e $hichgives them the pa!a-olic shape necessa!y to concent!ate the !a"iation in thei! linea!focus0 St!uctu!es a!e manufactu!e" -y highp!ecision fa-!ication p!ocesses $ith galvani@e"steel o! aluminium as the !a$ mate!ial0 /ecause the st!uctu!es a!e e7pose" to open ai!specific g!a"es of steel a!e !eAui!e"0 Manufactu!ing p!ocess !eAui!ements a!e "iffe!ent even fo!"iffe!ent types of pa!a-olic t!ough collecto! +#TC, technologies0 The "esign an" type of #TCst!uctu!e an" technology "ete!mine the layout an" cost of the manufactu!ing line0

&n"ust!ial Capa-ility

The fa-!ication in"ust!y in &n"ia is fai!ly matu!e0 a-!icate" componentsa!e ma"e locally fo! seve!al applications an" in"ust!ies0 Companies in the automotivecomponent in"ust!y a!e capa-le of manufactu!ing suppo!t st!uctu!es0 o! CS# manufactu!ingseve!al manufactu!e!s in &n"ia a!e ente!ing the ma!et using =s o! colla-o!ation $ith fo!eigncounte!pa!ts0

#!ominent glo-al playe!s fo! suppo!t st!uctu!es a!e lagsol Sola!geni7Sene! (l-iasa Sola! an" SyT!ough0 &n &n"ia yoti st!uctu!es Lt" un"e! license f!omS/# an" Megha 'nginee!ing un"e! license f!om (l-iasa have al!ea"y commence"fa-!ication0 Some mo!e potentially inte!este" playe!s a!e /ha!at o!ge +automotive componentmanufactu!e!, La!sen B Tou-!o +manufactu!ing enginee!ing an" const!uction, an"alpata!u #o$e! T!ansmissions +ope!ating in '#C an" manufactu!ing fo! the !eal estate an"elect!ical t!ansmission in"ust!ies,0 )the! potential playe!s coul" -e (M. (utoComponent +automo-ile component manufactu!ing, (nan" Moto! #!o"ucts +automo-ilecomponent manufactu!ing, C/L +automo-ile manufactu!ing, Tata (utocomp

+automo-ile component manufactu!ing, an"


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"iffe!ences in la-o! costs an" savings in logistics costs an" custom"uties0

Local manufactu!e!s $ho claim to have the capa-ility to manufactu!e thest!uctu!es on thei! o$n a!e suggesting cost !e"uctions of a!oun" 3?E;? pe!cent0


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#T sola! po$e! plant -ecause it is in the !eceive! $he!e much of theene!gy losses +optical an" the!mal, o!iginate0 The selective su!faces of the !eceive!s must-e highly a-so!-ent an" have lo$ the!mal emissivity at the ope!ating tempe!atu!e0

&n"ust!y St!uctu!e

Cu!!ently the!e a!e no playe!s in the &n"ian ma!et $ho a!e capa-leof manufactu!ing #T90 .hile the!e a!e fou! p!ominent playe!s in the glo-al ma!etlicensing an" =s a!e one !oute to a p!ofita-le oppo!tunity0 (nothe! is in"igenous "evelopment oftechnical no$ho$0 Local companies ventu!ing into this a!ea can e7pect a ma!et notonly f!om CS# -ut also f!om in"ust!ial heat applications0 Some of the glo-al playe!s mayset up thei! o$n 4!eenfiel" ventu!es in &n"ia in #hase && o! #hase &&& since the minimum "eman"!eAui!ement fo! any

one playe! is 2?? M.0

Lea"ing playe!s inclu"e Siemens Schott (!chime"e Sola! an"


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g Technical e7pe!tise fo! metal glass seal g 9BDeithe! -y the gove!nment o! in ### mo"e is !eAui!e"

The!e a!e &n"ian playe!s $ho a!e in"igenously "eveloping this technologynamely *(L /angalo!e Milman Thinfilm #vt Lt" #une 4 Design Se!vices an" /o!osil0


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technological no$ho$ in"igenously can !eap 9BD space -yp!ivateplaye!s !ich !e$a!"s0 g The Localcompanies $ho "evelop this technology may

g La!ge supplementa!y "eman" f!om &n"ust!ial nee" 23 yea!s top!ove thei! technology un"e! !eal


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C)M#)*'*TS (##9)&M(T' C)M#L'&TGC99'*T T9' C)ST +Q,ST(TS ST(TS


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g Simila!ity in some of the components $ith gTechnology T!ansfe! f!om glo-al playe!s is !eAui!e"V( .in" #o$e! implies that only inc!emental la!ge pa!t ofthe cost is estimate" to -e f!om #!op!iety cape7 $ill -e !eAui!e" no$le"ge0 g Lo$ manpo$e! costs can p!ovi"e a g Thuslocal manufactu!ing $ill p!ovi"e only 51?Q cost

competitive e"ge !e"uction g T!acing "evices a!e al!ea"y -eing

manufactu!e" an" use" fo! sola! po$e! steam gene!ation an" milita!y applications )ppo!tunities Th!eats g Local playe!s $ho "evelop the necessa!y g Lac of cla!ityin "eman" may "ete! manufactu!e!s

technological no$ho$ in"igenously can !eap f!om setting upeven inc!emental local manufactu!ing !ich !e$a!"s0 -ase

g &f min sha!e of local p!o%ect costs inc!easesin g nclea!incentivesmay "ete! glo-al playe!s f!om

phase 2 then T(DM that !eAui!es only colla-o!atingaffectively $ith local playe!s fo! mutual inc!emental cape7 gets a -oost0 -enefits g &!!espective of the technology this secto! is

e7pecte" to have a ma!et "eman" as pe! gove!nment plans0

;05


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The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia &n"ust!y St!uctu!e

Do$ an" Solutia a!e cu!!ently p!esent in &n"ia an" a!e the lea"ingplaye!s0 &n"ian )il an" 9eliance #et!ochemicals a!e p!o"ucing in"ust!ial oils an" a!e someof the potential playe!s that may manufactu!e it locally0


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Ta-le 2?:S.)T (nalysis fo! Local


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g!o$th $as the !esult of a""itional po$e! gene!ation capacity0 The "eman"fo! tu!-ines is p!ima!ily met -y "omestic p!o"uction $hich $as value" at S12 millionfo! 2??8E? $hile tu!-ine installation in &n"ia $as value" at S1136 million0 /othimpo!ts an" e7po!ts of tu!-ines have g!o$n at ove! 35 pe!cent ove! the last fe$ yea!s0


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Ta-le 22:4aps in Local Manufactu!ing 4(#s #)SS&/L'S)LT&)*no$ho$ fo! meeting complete specifications '7pe!tise e7pecte" to -e"evelope" -y 2?12Tight sche"ules "ue to "eman"s on capacity Successful implementationof #hase 2 an" ce!tainty in "eman" -y 2?13

Cost 9e"uction /ecause of Local Manufactu!ing

Cost !e"uction -ecause of the local manufactu!ing of CS# tu!-ines ise7pecte" to -e in the !ange of 12E1> pe!cent fo! glo-al playe!s0 .ith /


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p!esenceB $ith Lea"ing &n"ian playe!s lie g CST# Tu!-ine"eman" $ill -e much less than

/


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/


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9elative Ma!et 4!o$th an" Ma!et Dynamics

The ey g!o$th "!ive! fo! sola! steam gene!ato! manufactu!ing in&n"ia $ill -e the "eman" f!om local CS# installations0


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The


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The local


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Sola! iel" 9eceive! Tu-e1 1 Mi!!o! +#t,2 1 Mi!!o! +C!,3 1 St!uctu!es o! #ylons; 3 Sola! Steam 4ene!ato!s; ; D!iveFT!acing +#t,2 3 D!iveFT!acing +C!,1 2 /all oints; 3


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companies0 g 'asy availa-ility of financing options fo! investment in ane$ an" !api"ly "eveloping

technology

502 Timeline fo! &n"igeni@ation

&nte!actions $ith playe!s in the CS# fiel" have !esulte" in theassessment of the timelines fo! manufactu!ing summa!i@e" in Ta-le 20

Ta-le 2:Timeline fo! &n"igeni@ation C)M#)*'*TS #


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&n"igeni@ation Tu!-inemay happen in Cooling Systemphase & itself -ut

is e7pecte" to get /)# sta-ili@e" -y phase Local &mpo!t&&Sou!ce: (H( MC4 C'*'9

3 The technology fo! mi!!o! manufactu!ing $oul" -e availa-le at these phasesp!ovi"e" that lo$i!on san" is availa-le in &n"ia0 )the!$iselo$i!on san" $oul" have to -e impo!te"0 (lso vali" fo! Mi!!o!s C9 an" L

;? Development of Local Supply Chain The Missing Lin fo! Concent!ate"Sola! #o$e! #!o%ects in &n"ia 503 Minimum Deman" 9eAui!ements

(s "epicte" in igu!e 5 -elo$ local manufactu!ing fo! all CS#specificcomponents $ill !eAui!e less than 5?? M.Fyea! of "eman"0 o! !eceive! tu-e +#TC, an"t!acing "evices manufactu!ing to happen in &n"ia significant 9BD is !eAui!e" $ithin

&n"ia o! a =F Licensing f!om inte!national playe!s0

igu!e 5: Minimum Deman" 9eAui!ements +M.Fyea!, 6 Tu!-ines

9ecieve!Tu-e #TC 5

Mi!!o!s #TC T!acing ; 9eceive! Tu-e LComplete Manf0 Devices #TC St!uctu!es #TC


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Mi!!o!s #TC #a!tial Manf0 Devices C9 2 Sola! Steam 4ene!ato!s Mi!!o!slat C9 Molten Salts 1 The -u--le Si@e !ep!esents the ma!et si@e of apa!ticula! component assuming #TC:C9:L is installe" ? in the !atio of 6?:33:>0 The colou! intensity !ep!esentslocal manufactu!ing !ea"iness ? 1?? 2?? 3?? ;?? 5?? 6??

Sou!ce: (H( MC4

50; '7pecte" Cost 9e"uction

&nte!actions $ith playe!s in the CS# fiel" have !esulte" in theassessment of e7pecte" cost !e"uctions summa!i@e" in Ta-le 3?0

Ta-le 3?: (ssessment of Cost 9e"uctions +in pe!cent, "ue to Local Design an"#!o"uction C)M#)*'*TS 9'DC'D L)C(L T)T(L &* L)C(L T)T(L L)4&ST&CS M(*(CT9&*4 +'&ST&*4 ,D'S&4* +L)C(L , M&99)9S #(9(/)L&C 5 38 1?E2? 18E28 M&99)9S L(T 3 36 I 6 T9(C&*4 D'=&C'S 2E5 35E8 25E3? 3?E38

D9&=' M'C>E1? 2?E3? 2>E;? S)L(9 ST'(M 2 3E55E> 15E2? 2?2> 4'*'9(T)9 I *ot applica-le Cost !e"uctions -ecause of technological -!eath!oughs highe! volumes in

"omestic an" &nte!national ma!ets an" lea!ning cu!ve gains $oul" have effects ove! an" a-ove the figu!es sho$n he!e0

;1 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia


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( significant cost !e"uction is e7pecte" f!om localmanufactu!ing of t!acing "evices !eceive! tu-es pa!a-olic mi!!o!s tu!-ines an"st!uctu!es +#TC,0 Develope!s $oul" also fin" local manufactu!ing ve!y att!active -ecause ofvaluea""e" se!vices such as the local p!esence of many )BM options -ette! p!ocu!ementlea" times an" t!aine" local $o! fo!ce0

igu!e 6: Cost 9e"uction #otential Due to Local Manufactu!ing fo! Components Consi"e!e"fo! 1?? M. #TC #lant $ithout The!mal Sto!age

Cost !e"uction potential consi"e!e" fo! a 1?? M.#T plant 8?? >?? 6??

5??9s0 C!o!es

;?? 3?? 2?? 1?? ? #hase 1 #hase 2#hase 3

Sola! Steam 4ene!ato! Steam Tu!-ineSt!uctu!es 9eceive! Tu-es #a!a-olic Mi!o!D!ive Mechanism B T!acing Devices

Sou!ce: (H( MC4

The cumulative cost of the components illust!ate" a-ovein 2?11 is 9s0 >23 c!o!es $hich is estimate" to -e ;5Q of the total p!o%ect cost0 .ith

local manufactu!ing $e see a net "ec!ease of 9s0 135 c!o!es a 1Q "ec!ease -y #hase &&& an" a"ec!ease of 9s0 232 c!o!es o! 32Q -y #hase &&& fo! the a-ove components +#hase && an" #hase&&& p!ices a!e at 2?11 p!ices,0

505 #otential &nvolvement $ith &nte!national #laye!s

The follo$ing section e7plains the potentialinvolvement of &n"ian manufactu!ing in"ust!y


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$ith inte!national playe!s in the CS# ma!et0

'7pe!tise on CS# Technology

&n"ia cu!!ently lacs the necessa!y e7pe!tise an"comme!cial scale e7pe!ience fo! sola! the!mal po$e! plants0 &n the sho!t te!m it is e7pecte"that the ma%o!ity of the "evelope!s $oul" "epen" on inte!national playe!s fo! thei!e7pe!tise0 The follo$ing alliances fo! o-taining ove!seas e7pe!tise a!e cu!!ently no$n:

g 9eliance #o$e! has pa!tne!e" $ith (!eva

;2 Development of Local SupplyChain The Missing Lin fo!

Concent!ate" Sola! #o$e! #!o%ects in &n"ia g Lau!en 'nginee!s has pa!tne!e" $ith yoti St!uctu!es Lt"0 $ho a!elocally fa-!icating the sola! collecto!s of S/# "esign0 g (cme has ente!e" into a licensing ag!eement $ith esola! g Dalmia Sola! #o$e! has "eci"e" to pa!tne! $ith &nfinia g Su!yacha!a #o$e! =entu!e an" Sola! Millennium (4 +SM(4, 4e!manyhave fo!me" a = g Megha 'ngg has signe" up $ith (l-iasa Sola! fo! local manufactu!ingof sola! collecto!s g /


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.ith !espect to the tu!-ines it $ill tae a $hile fo! localmanufactu!e!s such as /


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Cont000

The CDT& is a pu-lic entity fun"e" -y the Minist!y of Science an"&nnovation $hose mission is to p!omote innovation an" technological "evelopment of Spanish companies0 &t suppo!ts9BD p!o%ects -y "i!ect su-si"ies an" helps them access financial suppo!t f!om national an"inte!national thi!" pa!ties to imp!ove the technological level of the Spanish in"ust!y0 &n 2?? CDT& $assuppo!ting at least five 9BD p!o%ects fo! the CS# in"ust!y le" -y the main Spanish playe!s of this secto!0

(t the !egional level p!ivate foun"ations such as the CT( in (n"alusiap!omote colla-o!ations -et$een scientific an" p!o"uctive secto!s to ans$e! to the local nee"s in te!ms ofinnovation an" "evelopment -y su-si"i@ing 9BD p!o%ects an" technology t!ansfe!0 The CT( is cu!!entlysuppo!ting si7 9BD p!o%ects fo! the CS# in"ust!y0

Successful e7amples of CS# manufactu!ing plants that have -een -uilt in4e!many Spain an" the nite" States a!e sho$n in Ta-le 310

Ta-le 31: Successful &ncentives fo! Local Manufactu!ing of CS# Components in Spain4e!many an" the nite" States

#L(*T 9&)4L(SS 9&)4L(SS 9&)4L(SSSC


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;5 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia This section analy@es the local economic -enefits !esulting f!omin"ust!y "evelopment in &n"ia using a "ynamic economic mo"el $ith ma!et scena!ios an"!efe!ence plants $ith assumptions !ega!"ing the local sha!e of a CS# "eploymentan" manufactu!ing of components0 The !esults a!e agg!egate" -y ave!age sha!e of localmanufactu!ing in &n"ia economic impact on 4D# an" la-o! impact: %o- c!eation an"fo!eign t!a"e impact0

601 Desc!iption of 'conomic Mo"el

The **SM plan an" ta!gets a!e -eing consi"e!e" as a !efe!encefo! this analysis so the

ma7imum ma!et si@e fo! CS# technologies $ill -e 1? 4. -y 2?220The othe! 1? 4. of sola! po$e! p!o"uction capacity $oul" -e -ase" on #=technologies0 The mechanism of a !eve!se auction is applie" to all the th!ee phases of **SM0

/esi"es this statelevel incentives a!e -eing offe!e" in 4u%a!atan" 9a%asthan0 &n 4u%a!at the ma!et si@e is not specifie" -ut the fee"in ta!iff +&T, has-een fi7e" fo! the ne7t 25 yea!s0 &n this mechanism the lo$est ta!iff is o-viously not achieve" -utthe futu!e ma!et unce!tainty is !e"uce" consi"e!a-ly $hich p!ovi"es a goo" incentive fo!"evelope!s to setup CS# plants in the state0


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Scena!io / +mo"e!ate, 6??? M.? M. Scena!io C +**SM optimistic, 1???? M.2??? M.

Sou!ce: (H( MC4(ssumptions: Scena!io /[6?Q of )ptimistic Scena!io ([2?Q of )ptimistic'7po!t Deman"[2?Q of )ptimistic

&n o!"e! to estimate the total economic impact costing fo! a!efe!ence plant has -een chosen of 1?? M. capacity an" 8 hou!s of the!mal sto!age0 C9 technologyhas -een inco!po!ate" -ecause it is gene!ally consi"e!e" the mo!e a"vance" an"p!omising technology0


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an" the!mal conve!sion the specific sola! technology componentssuch as mi!!o!s t!acing an" "!ive mechanism +T(DM, an" !eceive! tu-es have -een consi"e!e"to -e manufactu!e" in the count!y pa!tially "epen"ing on the volumes p!o%ecte" in the!espective scena!ios0 &n the fi!st case +Scena!io (, T(DM an" !eceive! tu-es a!e consi"e!e"to -e impo!te" -ecause of insufficient volumes0 &n the C9 technology components a!esimple! an" hence easily ma"e locally0 an" 80

igu!e >: Sha!e of Local Manufactu!ing in #T Technology

12?Q

1??Q Sha!e of Local Manufactu!ing

8?Q

6?Q

;?Q

2?Q

?Q Scena!io (Scena!io / Scena!io C

Sola! collectionThe!mal conve!sion The!mal sto!age 'lect!ical cove!sion#!o%ect management an" '#C Total

Sou!ce: (H(

;> Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola!#o$e! #!o%ects in &n"ia igu!e 8: Sha!e of Local Manufactu!ing in C9 Technology 12?Q


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1??QSha!e of Local Manufactu!ing

8?Q

6?Q

;?Q

2?Q

?Q Scena!io (Scena!io / Scena!io C Sola! collectionThe!mal conve!sion The!mal sto!age

'lect!ical cove!sion#!o%ect management an" '#C Total

Sou!ce: (H(

603 Di!ect an" &n"i!ect 'conomic &mpact

'ffects on "i!ect an" in"i!ect economicvalues a!e calculate" in a-solute num-e!s fo! each scena!io0 &n a""ition to localmanufactu!ing of components an" const!uction of the plant )BM $ill also cont!i-ute to the economicimpact of CS# plants0 The economic impact is st!ongly !elate" to the ma!et si@e ofCS#0

Ta-le 33: 'stimate" Di!ect an" &n"i!ect 'conomic &mpact +in 9s0 C!o!es pe! Gea!, fo!Scena!ios ( / an" C SC'*(9&) 'C)*)M&C #


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Di!ect 5361??2> ;1>? C?Q 2?Q &n"i!ect 23>?5;3; 28>25 Sou!ce: (H( MC4

60; La-o! &mpact in Te!ms of o-C!eation

The !esults of the la-o! impactassessment give the num-e!s of "i!ect %o- c!eation "u!ing CS# plant const!uction as $ell as thein"i!ect %o- c!eation in local manufactu!ing plants0

The $o!fo!ce nee"e" "u!ing const!uctionan" ongoing ope!ations has -een estimate" fo! the !efe!ence plant -ase" on

inte!actions $ith "evelope!s on the sills !esou!ces an" staffing !eAui!e"0 ( local facto! that nee"s to-e taen into consi"e!ation is the $ay la-o! is "eploye" in &n"ia0 &n po$e! plant const!uctionthe co!e staff is limite" an" a la!ge pa!t of the $o! is

;8 Developmentof Local Supply Chain The MissingLin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia su-cont!acte" an" ca!!ie" out -y cont!act la-o!0 &t is also a fact thathighe! technology may not -e as e7tensively "eploye" as in some of the "evelope" count!iessince la-o! in &n"ia is !elatively cheape! an" -usinesses ve!y often p!efe! to "eploy mo!e staff!athe! than go in fo! e7pensive technology0

Thus the )BM of the plant $ill also c!eate longte!m employment in thesola! secto!0 o-s in const!uction an" )BM $ill also have an impact on in"uce" %o-s in the!egion0 The num-e! of in"i!ect %o-s fo! const!uction an" )BM $ill inc!ease othe! in"uce"%o-s0 Thus this $ill lea" to a casca"ing effect $hich $ill lea" to g!eate! $ealth an" income

$hen ne$ se!vices an" p!o"ucts fo! thei! p!ivate consumption a!e "eman"e"0 &t is "ifficultto Auantify the total num-e! of all in"uce" an" in"i!ect %o-s0 &t is assume" that the in"i!ect%o-s c!eate" -ecause of local manufactu!ing $ill inc!ease p!opo!tionately $ith the e7tent oflocal manufactu!ing0

The !esults of %o- c!eation fo! each consi"e!e" scena!io a!e gathe!e" inTa-le 3;0


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Ta-le 3;: o-s C!eate" fo! 'ach of the Scena!ios ( / an" C in &n"ia L)C(L C)*ST9CT&)*)#'9(T&)* TG#' ) )/ M(*(CT9&*4 #h0 & #h0 && #h0 &&& #h0 & #h0&& #h0 &&& #h0 & #h0 && #h0 &&& Manage!ial staff 33 >5 ;?? 3?6> 36? 1> 3> 2?? ( Sille" la-o! 83 18> 1??? >516 ?? 33 >5 ;?? nsille" la-o! 665 15?? 8??? 6??135? >2?? 6> 15? 8?? Manage!ial staff 1?? 225 12?? ?2?? 1?8? 5? 11? 6?? / Sille" la-o! 25? 562 3??? 2255?5 2>?? 1?? 225 12?? nsille" la-o! 2??? ;;> 2;??? 18??;?5? 216?? 2?? ;5? 2;??

Manage!ial staff 16> 3>5 2??? 15?338 18?? 83 1? 1??? C Sille" la-o! ;1> 38 5??? 3>58;5 ;5?? 165 3>5 2??? nsille" la-o! 3333 >5?? ;???? 3???6>5? 36??? 333 >5? ;??? Sou!ce: (H( MC4

605 &mpact of o!eign T!a"e

o!eign t!a"e in te!ms of e7po!ts gene!ate" is estimate" only fo! CS#specific components !elate" to sola! fiel"s an" the!mal conve!sion0 &t is assume" that the!e$ill -e no a""itional e7po!ts fo! the t!a"itional po$e! -loc elect!ical conve!sion -loc an"'#C -loc components -ecause of g!o$th in the sola! the!mal in"ust!y0

Consi"e!ation has also -een given to the fact that some of the components$ill tae time to sta-ili@e once manufactu!ing sta!ts in &n"ia0 Minimum ma!et "eman" fo!manufactu!ing also plays a facto! -ecause this $ill "eci"e the time at $hich manufactu!ing$ill sta!t in &n"ia0 o! this !eason in scena!ios ( an" / e7po!ts a!e not consi"e!e" -ecause$ith t$o technologies sha!ing the ma!et pie the ma!et "eman" is %ust sufficient fo! each

technology to %ustify full fle"ge" p!o"uction of some components -ut not enough fo! p!o"uction tosta-ili@e an" sta!t e7po!ts0 '7po!ts have -een consi"e!e" p!ima!ily fo! the mo!e sta-le #Ttechnology0

(ssuming g!o$th in e7po!ts of f!om ;?? M. pe! yea! in 2?22 to ?? M. pe!yea! in 2?3? the e7po!t ma!et is estimate" to -e a-out 9s 5??? c!o!es in 2?22 9s8??? c!o!es in 2?25


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an" 9s 115?? c!o!es in 2?3?0

; Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia


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#a!t &&&#!epa!ation of an (ction#lan to Stimulate Local CS#Technologies in &n"ia

5? Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia >0 #!esent Scena!io an" utu!e *ee"s

The!e have -een some cases $he!e gove!nment inte!vention has -eensuccessful in fu!the!ing the ma!et penet!ation of CS# technologies0 Spain is a nota-le e7ample$he!e a gove!nment

policy has c!eate" $hat is p!o-a-ly the most matu!e sola! the!malelect!icity gene!ation inf!ast!uctu!e in the $o!l" p!omoting "omestic manufactu!ing these!vice in"ust!ies an" ene!gy in"epen"ence0 &n a ce!tain $ay ho$eve! the!e may -e a negativesi"e to even this success sto!y0 &n"ee" -y implicitly neglecting to !e$a!" !istaing an"innovation the inf!ast!uctu!e might tu!n o-solete ve!y fast0

Conve!sely a policy -ase" simply on !e$a!"ing the lo$est -i"s mayatt!act nonmatu!e playe!s that may not -e in a position to "elive! $hat is e7pecte"0 (policy that !eAui!es a la!ge "omestic input in pa!ts an" systems $he!e the "omestic capacity top!o"uce those pa!ts an" systems is none7istent may un"uly "elay ma!et penet!ation o!may !eAui!e a" hoc a"%ustments to sho$ ea!ly $ins0 ( policy that completely shiel"sinvesto!s f!om !is may gene!ate complacency an" inefficiencies0

The!e a!e othe! $ays in $hich gove!nment inte!vention may -e ineffective0( policy that !eAui!es a la!ge "omestic input in pa!ts an" systems $he!e the"omestic capacity to p!o"uce them is none7istent may "elay ma!et penet!ation un"uly0 Timing

is one of the most common sou!ces fo! failu!e0 (n imme"iate positive outcome may not -e!ealistic if it "epen"s on an activity $hose implementation may tae yea!s0o!tunately in this case the!e a!e tools that may help such as the socalle" c!itical pathmetho" a p!o%ect mo"eling techniAue e7tensively use" fo! effective management of all fo!ms ofp!o%ects0 (lthough this


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(ny of these possi-ilities may slo$ !athe! than p!omote ma!et penet!ation+Covell


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eep the "evelope!s inte!este" in the p!o%ects an" the in"ust!y0 &t isc!itical that the CS#"evelopment in &n"ia "oes not fall th!ough the c!acs0 (mi"st the success ofsola! #=p!o%ects in &n"ia the CS# technology also p!ovi"es a compelling case fo!suppo!t -y thegove!nment -ecause of the follo$ing !easons technological !easons:

g i!stly the conve!sion of sola! to steam is a !elatively highefficiency p!ocess +vs0 the conve!sion efficiency of #=, an" this can effectively supplement thefossil fuelsF!ene$a-le fuel such as -iomass thus cont!i-uting to ove!all ene!gy secu!ity of thecount!yg Secon"ly CS# technology is the only technoeconomically via-letechnology at p!esent fo! a sto!age option that can ena-le sola! ene!gy to -ecome "ispatcha-le"epen"a-le an" fo! meeting the pea po$e! sho!tages as $ell as se!ve the -ase loa"

52 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in&n"ia 80

(ction #lan

The **SM has plans to inc!ease the cont!i-ution of sola! the!mal po$e!in the count!yNs ove!all p!o"uction of po$e! significantly0


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gui"elines nee"s to cove! the follo$ing issues on a longte!m -asis un"e!the !esponsi-ility of the M*9':

g 9BD an" innovation f!ame$o!: un"ing mechanism an" gove!nmentsuppo!t fo! 9BD p!o%ects an" mechanisms fo! ###s fo! 9BD p!o%ects0 g !ame$o! fo! "emonst!ation plants: )-%ective of the plants0 #a!tiesinvolve" an"

!esponsi-le fo! !esults0 un"ing mechanism0 9ole of p!ivate secto!0no$le"ge sha!ing mechanism0 9ecognition an" a$a!"s0 g !ame$o! fo! sola! in"ust!ial pa!s: )-%ective of getting economiesof scale f!om

la!ge volumes in a single location0 4ui"elines fo! initiation p!ivatesecto! involvement incentives an" inf!ast!uctu!e planning0 g 4ui"elines fo! states to setup sola! policies: *o!ms to ensu!e

consistency in policies of cente! an" states in te!ms of aspects lie eligi-ility c!ite!ia lan"acAuisition envi!onmental

53 Development of Local Supply Chain The Missing Lin fo! Concent!ate" Sola! #o$e! #!o%ects in &n"ia clea!ances Auality stan"a!"s pe!fo!mance stan"a!"s costs an"incentives so that the!e is a unite" action an" mo!e c!e"i-ility fo! the in"ust!y0Mechanisms !e$a!"ing p!o"uction at pea time shoul" -e encou!age"0 g !ame$o! fo! syne!gies an" sha!ing no$le"ge: Syne!gies inaction such as sha!e"

institutions giving ce!tifications an" t!aining0 no$le"gesha!ing mechanism so that the!e is a sha!e" list of !ecogni@e" as $ell as faile"technologies eAuipment companies an" metho"ologies0

Ta-le 35:ey 9esponsi-ilities an" Timelines fo! the (ction #lan

o! all these actions the ey !esponsi-ility shoul" -e att!i-ute" to the M*9'

F S'C&

S##)9T&=' S'CT&)* (CT&)* #L(* G1G2 G3 G; G5 9'S#)*S&/&L&TG Gea!$ise allocation fo! CS# M*9' po$e! p!o%ects Longte!m


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9egulato!y suppo!t an" ta!iff policy mechanism fo! sola! the!mal M*9' B C'9C f!ame$o! hy-!i" p!o%ects fo! CS# "evelopment 9ene$a-le ene!gy ce!tificate mechanism fo! sola! the!mal C'9C ene!gy gene!ation #lanning ("eAuate payment secu!ity fo! payment mechanism using the coal cess M)FM*9' secu!ity fun"s 'na-ling of lo$cost financing Lo$cost fo! CS# f!om -ans an" sepa!ate M) financing e7posu!e limits fo! CS# p!o%ects CCD an" @e!o e7cise "uties fo! mate!ials an" components inancial M)

use" fo! manufactu!ing of sola! planning of systems su-si"ies an" iscal incentives fo! sponso!e" incentives !esea!ch an" in house 9BD M) e7pen"itu!e Development an" maintenance of a pu-lic !eposito!y of M*9' no$le"ge Mechanism Development of Auality an" M*9' fo! specification stan"a!"s p!omotion 'sta-lishment of a 9BD M*9' of 9BD an" f!ame$o! on a ### -asis innovation Development of sola! ene!gy M*9' cou!ses Sponso!e" !esea!ch p!o%ects in M*9' e"ucational institutions

5; Development of Local Supply Chain

The Missing Lin fo! Concent!ate" Sola! #o$e!#!o%ects in &n"ia 801 LongTe!m #olicy !ame$o! f!om the 4ove!nment

4iven the p!esent situation the Auestion is $hat the gove!nmentNsstan" $oul" -e $ith !espect to suppo!ting the CS# p!o%ects0 The gove!nment can go ahea" $iththe same policy of eAual capacity allocation fo! -oth #= an" CS# $hich $oul" imply a"iffe!ential ta!iff


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pea pe!io" these p!o%ects $ill me!it a highe! ta!iff that can thensustain the CS# p!o%ect $ith sto!age option0

( hy-!i" CS# option o! a sto!age option $oul" ena-le use of "omesticallyavaila-le steam tu!-ines as $ell an" thus not only -e cost competitive to that of #=po$e! -ut CS# po$e! $ill -e "ispatcha-le an" "epen"a-le0 &n a""ition the Auality of po$e!f!om the CS# plant $ill -e much -ette! compa!e" to that of the #= plant0



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The ma%o! action nee"e" f!om the gove!nment is clea! policy gui"elinesconce!ning the CS#p!o%ects0 Mo!e cla!ity is nee"e" !ega!"ing the follo$ing:

g The Auantum of CS# p!o%ects that $oul" -e suppo!te" in #hase&& an"#hase&&& of the national Sola! Missiong .hethe! the CS# p!o%ects $oul" -e limite" to stan"alone CS# p!o%ectso! also !ecogni@e the hy-!i" p!o%ects0g 4ene!ic ta!iff gui"elines fo! sola! -iomass hy-!i" p!o%ects an" CS#p!o%ects $ith sto!age0

)n the 9'C mechanism the gove!nment can !ecogni@e sola! the!mal technologyan"up"ate the 9'C ce!tification mechanism to mae steam p!o"uction f!om sola!ene!gysou!ces eligi-le fo! 9'C c!e"its0

(nothe! ma%o! a!ea in $hich the gove!nm

energy sector management assistance program

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