Environment
Energy
Courtesy: various website
INTRODUCTION
India is an energy starved country whose economy is growing
at a breakneck speed. The current installed generation capacity is about 162 GW
which, with high T&D losses, translates into a peak time shortage of 12.7% and
this is the situation when more than 400 million Indians still don’t have access
to electricity. India currently faces a threefold challenge of meeting the
current demand, fighting climate change and attaining energy security. This
implies that nuclear power and renewables would play a very crucial role in
India. India unfortunately has very limited potential for wind power and that
for geothermal is still unknown, but luckily India gets good sun fall almost all
through the year. Solar power in India has huge potential and it is environment
friendly as it has zero emissions while generating and is obviously the most
secure.
Importance and Relevance of Solar Power in India
Cost of power: The solar panels available in the market today
are very costly which makes the initial investment required very high, which in
turn makes it prohibitive in a poor country like India. JNNSM aims at bringing
this cost of power to grid parity by 2022 and at par with coal based power
plants by 2030. But this would require global investments in R&D at a very large
scale. Although it is a costly alternative for now, but going forward, with the
progress in technology its cost will come down. Contrasting this aspect of solar
with that of coal makes it a clear favourite as the cost of producing
electricity using coal will only go higher as mineral reserves deplete in India
and then we would be forced to import most of the total requirement, which will
come a further higher price. Couple these with some major investments in
developing the required infrastructure for importing coal and the transportation
cost involved and we get to understand that solar has now become is inevitable.
Scalability: India is blessed with a huge and still untapped
potential in terms of solar power as it receives high insolation. We get about
300 clear and bright sunny days per year, receive 4-7 kWh per square meter per
year i.e. 1500-1700 kWh/m2/p.a. adding upto 5 zillion kWh per year. This
potential, even at 10% conversion rate would mean an availability which is many
times more than what India may need. The only concern regarding scalability is
the availability of space as megawatt size plants occupy a lot of land. The size
of land may vary according to the intensity of sun in the area of the plant (as
per an estimate by Tata BP Solar, generating 100 MW in Delhi would require about
500 acres of land for much less in Rajasthan). The following solar map shows the
region wise levels of insolation in India.
A Distributed Source of Energy: The solar form of energy
provides the opportunity to generate power on a distributed basis enabling rapid
generating capacity addition with very short lead times. It becomes much more
important in case of countries like India which have poor T&D infrastructure.
Reaching Out to the Rural India: Solar power is very useful especially from the
rural electrification point of view. In India, hundreds of millions of rural
consumers are still not connected to the grid, and ones connected either don’t
receive quality supply or get no supply at all. Solar power has the capacity to
completely revolutionize the prevalent scenario and change the living standards
in the remote villages of India by efficiently meeting the electricity and
heating needs of the people out there.
Environmental Impact: The best thing about solar is that it’s
environmentally benign as it produces no carbon or greenhouse gases or any other
toxic waste while generating, doesn’t burn oil, coal or gas to generated
electricity. In addition to these, at solar power plants there are no chances of
an environmentally devastating accident. In fact, the only pollutant which
factors into solar power are those involved in the construction and
transportation of its component parts.
Security of Source: Energy security is very high on our
national agenda and we are working very hard with our global partners to
diversify the source of the resources that we use to generate the requisite
amount of energy to run our economy. Solar is the most secure of all known
resources. It may not be the cheapest source of energy as of now, unlike coal,
but it is, and will always be, available in abundance and is waiting to be
exploited. It is one source of energy we will never run out of, one source of
energy which will always be available with us irrespective of how the
geopolitics changes.
JAWAHARLAL NEHRU NATIONAL SOLAR MISSION
The Jawaharlal Nehru National Solar Mission (JNNSM) was
launched by the Prime Minister, on January 11 2010, under the National Action
Plan for Climate Change (NAPCC) with the aim of promoting an eco friendly and
sustainable growth while marching towards energy security for the nation and
enhancing India’s contribution to meet the global challenge of climate change.
It aims at establishing India as a world leader in solar energy by creating
policy conditions conducive to stimulate investments in installation and R&D.
Objectives and Targets
The objective of JNNSM is to transform India into a global
leader in solar power by spreading awareness and promoting investments with the
help of policies which encourage such initiatives. The National Solar Mission
has set a target of generating 22,000 MW in 3 phases, 20,000 MW for
grid-connected 2000 MW for off-grid applications. The first phase spans from the
remaining period of the11th Plan at the time of launch and first year of the
12th Plan (up to 2012-13), the 2nd phase would be the remaining 4 years of the
12th Plan (2013-17) and the 13th Plan (2017-22) would be the 3rd Phase. There
are provisions for mid-term evaluation of the progress made, review of capacity
and targets of the subsequent phase according to the perceived cost and
technological progress.
The first phase of the mission is focussing on two aspects:
promoting off grid system applications and a modest capacity addition in the
grid. And the second phase would target on aggressive capacity addition and
improving the solar penetration. The targets stated in the JNNSM are:
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To create an enabling policy framework for the
deployment of 20,000 MW of solar power by 2022.
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To ramp up capacity of grid-connected solar power
generation to 1000 MW within three years – by 2013; and an additional 3000
MW by 2017 through the mandatory use of the renewable purchase obligation by
utilities backed with a preferential tariff. This capacity can be more than
doubled reaching 10,000MW installed power by 2017 or more, based on
the enhanced and enabled international finance and technology transfer.
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To create favourable conditions for solar
manufacturing capability, particularly solar thermal for indigenous
production and market leadership.
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To promote programmes for off grid applications,
reaching 1000 MW by 2017 and 2000 MW by 2022
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To achieve 15 million sq. meters solar thermal
collector area by 2017 and 20 million by 2022
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To deploy 20 million solar lighting systems for
rural areas by 2022.
The first phase (up to march 2013) of the mission targets
majorly on two aspects,
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Off-grid and Decentralized applications
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Capacity addition to the grid
It provides an enabling framework to support entrepreneurs in
order to develop markets. Supporting viable business models to enhance the
spirit of investorsis another focus in this phase. The success of the scheme
depends big time on the flexibility factor that it has incorporated as the
market is currently demand-driven, and that is why it offers a wide range of
incentives where an interested investor can tailor the best suited package as
per his/her requirements.
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Off-grid and Decentralized Solar Applications
The off-grid applications include meeting energy requirements
both in the form of electricity and heat. The main objectives of this section of
the scheme are:
-
To promote off-grid applications for meeting the
targets set in the JNNSM.
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To create awareness about the usage of solar systems
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To encourage and promote sustainable business
models
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To support channel partners and potential
beneficiaries
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To organize consultancy services and seminars,
awareness campaigns
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To help replace kerosene and diesel, wherever
possible
Various off-grid SPV applications which have a maximum
capacity of 100 kWp per site and decentralized solar thermal applications are
eligible for being covered in this scheme. Even mini-grids for rural
electrification with applications upto 250 kW stand to benefit from it. To help
promote technology upgradation and expansion in production facilities soft loans
would be made available to SME manufacturers through Indian Renewable Energy
Development Agency (IREDA). Various channel partners are being used for
facilitating faster implementation and minimizing transaction cost and time.
These channels are:
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RESCOs (renewable energy service providing companies):
These companies install, own and operate the renewable energy systems.
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Financial and Microfinance institutions: These
institutions are mainly into providing loans to the consumer and accessing
the interest subsidies through refinancing.
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Financial Integrators: These firms serve the
manufactures and service providers by integrating different sources of
finance available for them.
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System Integrators: These entities are the ones which
provide design, supply, integration and installation and O&M to the clients.
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Programme Administrators: Administrators include central
and state ministries and departments, state nodal agencies, utilities, PSUs
and reputed NGOs. These bodies are responsible for implementing the
scheme.
Funding Patterns
Because of the high set up cost, proper funding arrangements
are of crucial importance in order to build an encouraging environment for solar
generation. Funding is available in two modes:
A. Project Mode: To avail the facilities through this
mode there needs to be a project report and monitoring arrangements. The project
report would, inter alia, include client details, technical and financial
details and O&M specifications. The total cost is funded through a mix of debt &
equity, where promoter’s equity contribution has to be at least 20%. MNRE
provides a combination of 30% subsidy and/or 5% interest bearing loans. Further
a benchmark project cost is worked out by the MNRE, on which a capital subsidy
of 60% is given. However, in case of special category states like north eastern
states, Himachal Pradesh and Uttarakhand, 90% subsidy would be given. These
subsidies can be accessed only by the ‘Programme Administrators’.
B. Market Mode: Through market mode different ‘Channel
Partners’ are enabled to access various capital subsidies and soft loans. The
channel partners would tie up with some lending institutions and these lenders
would get into an agreement of refinance with IREDA, then IRDEA gets fund
handling charges by MNRE at the rate of 2%.
Incentives
Although, off-grid connections are meant for personal or
small scale users, it does take off the burden of generation and distribution to
quite an extent. Apart from this, using solar energy to either supplement or
complement one’s energy requirements helps in fighting climate change and
reducing country’s carbon footprint. So it makes sense to promote its usage and
so a slew of incentives have been announced to encourage the potential investors
for participation. These benefits are provided in forms of RE vouchers, capital
subsidies, interest subsidies and green energy bonds.
Release of Funds
Release of funds under JNNSM is conducted in two ways. For
the projects which are to be developed by administrators (government ministries,
PSUs and NGOs)fund release could be front-ended, it would be done in two
instalments, 70% on sanction and 30% on completion. Release of funds in case of
private channel partners would be back-ended i.e. it will be in the form of
reimbursement of the cost incurred and would be given after a proper
verification of completion and efficiency of the project.