frenzy on india\'s solar street
First phase of Jawaharlal Nehru National Solar Mission (
Indian Prime Minister Manmohan Singh proposed part of the national action plan on climate change a year ago)
By 2012, 1,100 MW of solar power will be commissioned and the collection speed will reach 20,000 MW by 2020.
For the most eco-friendly energy evangelist, this is a number that sounds utopian.
Most installed projects are currently operating at a slow pace, with only under 20% of the capacity and funding of banks and financial institutions.
But things began to change.
The combined impact of policy changes on electricity tariffs and new state government interest in solar power has caused a stir in solar power over the past four to six months.
Two government companies have been bidding for projects in recent rounds, Ireda (
India Renewable Energy Development Authorityand NVVN (
NTPC Wade and twyapar Nigam)
An overwhelming response was seen.
Bid opening at 9. m.
, The Ireda website shows the list of the final 105 producers, as well as their wikitimings \'(
The time it takes to load an application online)
Until milliseconds. The cut off (
The last company on the list)
In 4 minutes, 20 seconds and 22 milliseconds.
Anmol Singh Jaggi, consultant director at Gensol, said: \"The July bid for smaller projects less than 2 mw was like a buzzer round for Kaun Banyak Crorepati,\" which was one of those who eventually won a project.
The second round of much larger projects (5 MW and above)
Will be awarded by NVVN by the end of November.
These are 150 megawatts of solar photovoltaic power and 470 megawatts of solar energy-thermal power. Photovoltaics (PV)
Is a battery array containing materials that directly convert solar radiation into electrical energy, while solar heat is the technology that first converts solar energy into thermal energy (heat).
Solar developers are in the midst of fierce competition for the projects offered, and NVVN has received bids for 1,740 MW of power generation, although it plans to allocate only 150 MW.
\"Now, it looks like there are a lot of people trying to be the pioneer of solar power at any cost,\" said Inderpreet Wadhwa, CEO of Azure power . \". Delhi-
Azure-based companies have partnered with SunEdison, North America\'s largest solar developer, to develop a 15 MW solar plant in Gujarat.
It already has a project in Punjab and is one of the few companies that focus on solar energy.
Many bids are made at a price of every million dollars.
Much lower than the estimated Watt of CERC (
Central Power Regulatory Commission).
Moser Baer, for example, is one of the most active companies in the region, bidding and winning a project in MahaGenco (
Maharashtra government power generation company)at Rs.
12 crore per megawatt, while the CERC forecast for the project is Rs.
17 grams per megawatt.
Blackstone, a private equity firm, recently invested $0. 3 billion in the Moser Baer project, a new power project launched by the sponsors of optical storage devices.
Many companies are trapped by the temptation of long-term stability (30 year)
Returns at a small recurring cost.
The government has set upindirect)
By a subsidy mechanism that bundles expensive solar energy with cheaper thermal energy.
NVVN will bundle 4 conventional power units with each solar energy, reducing the final cost to about Rs. 3. 50 a unit.
As a trading institution, NVVN will sell this (more expensive)
The power to discover buyers on the exchange.
However, what most players do not bargain for is that it is now expected that fierce competition will take place in the tender.
Reverse bidding can result in a large number of bids at a cost well below 2010-2011. This was at Rs. 17.
Units of PV and Rs. 15. 40 for CSP (
Concentrated solar energy).
Financial closure will be difficult for large projects.
According to the cash flow of the project itself, most of the financing is off-balance sheet financing.
While private equity firms and multilateral financing institutions are keen to invest in solar energy, traditional banks and financial institutions are more cautious.
Just like their first wave of hot peers developed by IPP in 1990, financing is becoming a major obstacle for solar developers.
Public sector banks and financial institutions said they were unable to assess the commercial viability of these projects because of the lack of previous data.
They are also concerned about the way the electricity purchase agreement is made (PPA)are structured.
The biggest uncertainty is who will compensate for the shortage if these plants fail to meet the promised minimum load factor of 20% in the PPA.
Ministry of new energy and renewable energy (MNRE)
Bring banks and developers together to develop new financing models.
\"We recognize that equity financing is needed to promote solar projects.
India\'s renewable energy development authority said: \"If we find a funding gap, we will recommend a special stock fund to the government (IREDA)
Chairman and Managing Director
There is another problem, said R.
Chandrasekhar, global CEO of IT Power group, is one of the oldest renewable energy consulting companies in the United StatesK.
May be because water shortage.
Solar power generation in particular
In order to keep the panels clean and generate electricity, thermal power requires a lot of water.
\"Most areas with plenty of sunshine are usually areas with insufficient water,\" he said . \".
While the state government promised to provide the required amount of water, their commitment will be tested in the summer months.
The solar energy project must also take into account the storage capacity, so the electricity generated can be stored and used as a base load, not only for peak demand.
So far, all solar projects have been designed to operate about 6 hours a day to meet the needs of the grid during peak hours.
Although progress has been slow so far, all indications are that solar energy is now growing rapidly.
Government policy incentives, coupled with corporate interest in projects, could lead to changes that cleaner technology promoters have been advocating for years.
Although progress is far from the speed of light, it is likely to be a turning point in the next few years.
The article was published in the December 3 issue of Forbes India, the licensee of Forbes Media.
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