ISA SOLAR PV CONCLAVE 2008

A presentation by

B. Venkateswara Rao General Manager (Projects & Technical) Indian Renewable Energy Development Agency Limited September 29, 2008

Power Scenario in India

Installed Capacity Share of RE Solar Power Plants Harnessed Average Electricity Shortage Peak Shortage Access to Electricity (Rural) : : : : : : 145586 MW (As of July, 2008) 12194 MW (8%) 3 MWp 9.6% 13.8 % 44% households

To meet the growing demand and shortages generation capacity needs to be doubled by 2017 and increased 6 folds to 800 GW by 2031 - 2032

Power Sector Projections

Target for Capacity Addition during XI Plan ( 2007 2012) Target for Capacity Addition during XI Plan ( 2007 2012) (Renewable Energy) GOI target Electricity for all by 2012 About 18000 remote villages to be electrified through RE About 25% of remote villages i.e. 4500 villages form a very viable market. Majority of villages spread across states like U.P., Uttarakhand, Chattisgarh, J&K, Jharkhand, Orissa and NER States where Solar PV would be the only Renewable Energy Resource. : 78578 MW : 14000 MW

Targets during XI Five Year Plan (2007 2012)

Power Sector at Glance

Nuclear 3% Hydro 25% Renewable 9%

Thermal 63%
Thermal Hydro 91, 907 35, 909
Renewable Energy (including Hydro) accounts 34% of the installed capacity in India

Renewable 12,400 Nuclear 4, 120

Indian Renewable Energy Scenario

Sector Potential Achievement (As on 31.03.2008) 8757 MW 2180 MW 606 MW 800 MW 55 MW 3 MW

Wind 45000 MW Small Hydro 15000 MW Biomass Power/ 16000 MW Bagasse Cogeneration 3500 MW Waste to Energy 2700 MW Solar PV 20 MW/sq.km

Renewables : Total installed capacity

12400 MW

Target for Capacity Addition during XI Plan ( 2007 2012) : 14000 MW

Solar PV Market Growth in India

Sector-wise use of PV Modules (335 MWp aggregate capacity)
Pump (11)

Street Light (5.5) Home Light (16.5) Lantern (7.5)

Power Plant (6) Telecom (22) Others (40.5)

Exports (225)

Sector-wise use of PV Modules (335 MWp aggregate capacity)

Solar PV Production
Year Solar Cell Production (MWp) 40 53 155 200 Solar Module Production (MWp) 75 103 155 275

2004-05 2005-06 2006-07 2007-08*

* Estimate

Present Status of Solar PV Developers / Manufacturers in India

PV Cells Mfg. Co. PV Module Mfg. Co. PV System Mfg. Co. Estimated Turnover 9 Nos. 21 Nos. 80 Nos. Approx. Rs. 4000 crores

MNRE Demonstration Programme on Grid Interactive Solar Power Generation

Objectives

Development & demonstration of mega-watt capacity grid interactive PV Power generation in the country

Reduction in the cost of Solar PV / Thermal Power plants / systems

Reduction in the cost of electricity generation from grid connected Solar PV Power plants

Demonstration Programme on Grid Interactive Solar Power Generation

Implementation Arrangements
Project proposals will be considered by Ministry of New and Renewable Energy (MNRE) for approval on first come first serve basis in accordance with guidelines of MNRE.

Project proposals will be considered on merit basis.

Projects set up by the developers on build, own and operate basis in accordance with the guidelines of MNRE.

Demonstration Programme on Grid Interactive Solar Power Generation

Targets and Generation based Incentives

Support for maximum capacity up to 50 MWp (Maximum 10 MW for each state) during 11th Five Year Plan. Minimum of 1 MW and maximum of 5 MW can be allocated to a Developer. Generation based incentive up to maximum of Rs.12/- per kWh for Solar PV Grid Power Plant (deducting power purchase rate which is distributed at notional value of Rs.15/-).

Demonstration Programme on Grid Interactive Solar Power Generation

Targets and Generation based Incentives

Contd..

Accelerated depreciation benefit is not allowed while availing the incentives. Third Party Sale, Banking and Billing of power is not permitted. The generation based incentive is available for maximum period of 10 years from the date of approval and regular power generation from the project. MNRE may announce a new policy by 31.03.2010 for the generation based incentives and guidelines which will be applicable for all such proposals and projects.

Demonstration Programme on Grid Interactive Solar Power Generation

Eligible Organizations

All existing Registered Companies, Central / State Power Generation Companies, Public and Private Sector PV Project Developers

Individuals, NGOs, Financial Institutions, Societies and other unorganized investors are not eligible to participate DIRECTLY.

Demonstration Programme on Grid Interactive Solar Power Generation

Roles and Responsibilities

(For Grid Interactive Solar Power Generation Projects)
Approval / Sanction of Projects by MNRE Disbursement of generation based incentives through IREDA Installation and Maintenance of the power plant by Project Promoter Inspection and Monitoring of the Power Plant by the team of officials from MNRE / SNA / Utility / IREDA Field Evaluation studies by MNRE through Professionals / Independent Organizations Project loan can also be provided by IREDA

Demonstration Programme on Grid Interactive Solar Power Generation

Financing of Central / Grid Connected Projects by IREDA

Loan amount upto 75% of the total project cost Minimum promoters contribution 25% of the total project cost Maximum loan repayment period upto 10 years Interest rate 13.00% to 14.00% based on the risk assessment of the promoters / project Eligibility criteria

Demonstration Programme on Grid Interactive Solar Power Generation

Eligibility Criteria for IREDA Loan

Public, Private Ltd. Companies, NBFCs and Registered Societies. Individual, Proprietary and Partnership Firms (with applicable conditions). State Electricity Boards which are restructured or in the process of restructuring and eligible to borrow loan from REC/PFC). Profit making applicants and with no accumulated losses. No erosion in paid up equity share capital.

Demonstration Programme on Grid Interactive Solar Power Generation

Solar Photovoltaic Technology

Highest Solar Cell Efficiencies (World)

Technology Si Single Crystal Si Multi Crystal a-Si Single Junction a-Si Triple Junction CdTe CIGS Si Films DYE Organic GaAs (500 x) GaAs (20 x) Area Sq.cm. 4.00 1.00 1.00 0.27 1.00 1.00 4.01 1.00 1.00 0.40 0.20 Efficiency % 24.7 20.3 12.7 13.5 16.8 19.5 16.6 10.4 6.0 40.7 42.8 UNSW FhG-ISE SANYO USSC NREL NREL Stuttgart University Sharp North Carolina University Spectrolab Delaware University Group

Highest Solar Cell Efficiencies (India)

Contd..

Technology Single Crystal Multi Crystal a-Si Single Junction a-Si Multi Junction a-Si/c-Si (nc-Si) CdTe CIGS Si Films Dye Sensitized Organic Cells

Area Sq.cm. 64.00 100.00 1.00 1.00 1.00 0.03 0.41 0.98 1.00 0.50

Efficiency % 19.7 16.0 12.0 11.5 6.0 10.5 13.0 8.7 5.0 3.0 CEL

Group

Tata BP IACS IACS IACS NPL IISC Jadavpur University Delhi University IIT, Kanpur

National Solar Mission

National Solar Mission - Objectives

To deliver at least 80% coverage for all low temperature (<150 deg C) and 60% coverage for medium temperature (150 250 deg C) applications of solar energy in urban areas, industries and commercial establishments. To pursue rural solar thermal applications under public-private partnerships where feasible. To establish commensurate domestic manufacturing capacity to meet the desired level of deployment with necessary technology tie-ups. For domestic photovoltaic production from integrated facilities at a level of 1000 MWp/annum. To establish at least 1000 MW of CSP generation capacity with necessary technology tie ups wherever required.

National Solar Mission

Industrial Growth to meet requirement of Solar Mission

Annual production capacity of about 2000 3000 tonnes of poly silicon material and down the line silicon ingot and wafer production facilities to be set up by 2012 and upgrade to 30,000 tonnes by 2017. The domestic manufacturing capacity for solar cells and modules to be increased from the present level of about 110 MW to more than 5 GW by 2017. Achieve cumulative PV module production of 800 MW during the 11th plan and another 2 GW during the 12th plan period.

National Solar Mission

PV Road Map
Efficiency Targets towards 2022
Type of Solar Cell Crystalline silicon solar cell Thin-film silicon solar cell Polycrystalline solar cell GaAs Conc. solar cell Dye/organic nano based solar cell Present Status Production (R & D) 13-16% (19.7%) 5-6%* (10-12%) *Pilot Plant CdTe (10%) CIGS (13%) -(2-5%) Conversion Efficiency Target (%) 2011-12 19 (22) 8 (13.5) 10 (13) 10 (15) 28 (32) (5-10) 2017-18 23 (25) 12-14 (16) 14 (16) 15 (20) 39 (45) 8-10 (15) 2021-22 24 (26) 16 (20) 19 (22) 21 (25) 47 (50) 12-17 (25)

Effects of R&D - Cost of Solar PV

Technology
PV Module price Rs./Wp PV System price Rs./Wp (No storage) PV System price Rs./Wp (with storage) PV System price Rs./Wp (low storage, hybrid)

2012
120 160 185 170

2017
60 100 120 110

2022
30 60 80 70

Issues & Challenges for development of Large Scale Solar Power Plants
Financier
needs technology demonstration viability of the Project

Project Developers
Needs long term commitment & purchase of power to achieve cost reduction

Developer
Needs proof of technology expenditure on demo projects

How to break this vicious circle? Cost reduction

is possible only by mass production of system and large capacity plants

Demonstration Projects
Initial cost is high

Utility
Hesitate to go for long term commitment for PPA and awaiting better prices

Suggestions to overcome barriers

Developers may be large companies i.e. utilities & corporations Ownership by utilities, if possible Price escalation clause at least equal to inflation rate linked to cost of living Longer PPA about 25-30 years i.e. life of the system New technology development Favourable Govt. policies including incentive package etc.

Technology: Solar Flat Plate PV System

Status
Fixed or tracking crystalline or multi-crystalline flat plate: fully commercial Thin film flat plate: early commercial Over 250 systems installed worldwide larger than 1 MW; 7 systems over 10 MW Largest is 20 MW in Germany 15 MW system at Nellis Air Force Base, Nevada 8.2 MW System at Alamosa, CO

Environmental Footprint
Acres/MW - Fixed Orientation silicon 7.5 acres per MW - One axis tracking silicon 9.5 acres per MW - Fixed orientation thin film 10 acres per MW Lower water usage (washing), no air emissions

Technology: Solar Flat Plate PV System

Contd..

Load Matching and Storage As available Subject to rapid transients with cloud passage No storage in currently proposed systems Future storage to mitigate transients? Potential for Cost Reduction Increased deployment / manufacturing Maturity of low cost / medium efficiency thin film Reduction of tracking costs Suppliers Large number of domestic and international suppliers

Technology: Solar Concentrating PV System

Status
Some suppliers offerings can be considered pre-commercial Other supplier offerings are demonstration or conceptual

Environmental Footprint
Currently above 5.5 acres/MW, decreasing to 4.5 acres/MW with higher efficiency cells Low water requirement (washing); no air emissions

Load Matching and Storage

As available Subject to rapid transients with cloud passage No storage in currently proposed systems Future storage to mitigate transients?

Potential for Cost Reduction

Costs not sufficiently developed for benchmarking Mass Production Increased cell efficiency (less collector area required)

Status and Viability of various Solar PV Technologies

Crystalline silicon flat plate PV are commercial technologies - They have moderate opportunity for cost reduction - They are low risk Thin Film PV - Potential for low costs, but reasonable efficiencies must be reached at that low cost - Watch out for balance of plant and area-related cost Concentrating PV - High efficiency multi-junction cells will cut costs - Will be competitive in future

Important Steps in establishing Central Solar Power Projects

Identification of Energy Resource Zones especially w.r.t. Solar Power Projects Creation of conducive policy atmosphere - Lease of land at concessional price -To provide all necessary clearance including establishment of plant & transmission lines - Long range planning & clear road map for 10-20 years Establishment of transmission lines - To provide necessary land / forest / local clearance

Important Steps in establishing Central Solar Power Projects

Contd..

Incentives / Tax Credits and Financing

- Upfront tax credits / income tax rebates - Quasi equity / least cost credits - Sub ordinate debit - Production linked incentive for longer period - To enable long term PPAs approx. 25-30 years

Favourable local / state policies

- Land clearances - Attractive purchase tariffs for solar power from state agencies etc.

Important Steps in establishing Central Solar Power Projects

Contd..

Identification of Technology - Based on efficiency / stability / suitability / viability / cost effectiveness Ensure good operation & maintenance of power plants - Manpower training Exploration of Hybrid Systems - Suitable Thermal storage options Participation of Utilities, Equipment Manufacturers, Financial Institutions / Banks on joint partnership

Important Steps in establishing Central Solar Power Projects

Contd..

To create green cess / pool fund to provide incentives to C&P Explore foreign funds at concessional cost Innovative financing methods
- Equity Participation - Longer repayment period - Balloon repayment etc.

Solar PV Power vs. Diesel Power

It is a viable option provided Availability of low cost funds for Solar PV and long-term repayment Matching of Day time load Availability of maximum depreciation benefit in the first year Consideration of life cycle cost and savings Consideration of environmental benefits Possible to set up Central Solar PV Station in remote locations with reasonable transmission charges and also for self-consumption of power by the same industry

Cost Reduction Attempts Solar PV

Process yield to be increased from 96% to 98% through use of laser cutting and cell testing machines Optimization of lamination cycle for better results EVA formulation being optimized Dispensing with module frames but modifying mounting structures Edge-sealing to decrease the probability of moisture ingress Use of pyramidically enhancement textured front glass for optical

Handling of thin and fragile cells improved with minimal breakages

Cost Reduction Attempts Solar PV

Contd..

To reduce cost of manufacturing of basic raw material. To improve the module efficiencies between 30% 50% beyond 2030. Consumption of Poly Silicon to reduce from 5 g/Wp to 2 g/Wp by 2030. Cost of Cyrstalline Silicon to reduce from US$ 1.3/Wp to US$ 0.4 Wp by 2020. To reduce cost of power generation by optimum system configuration. For spawning a thriving solar market, the technology needs to be competitively cheaper.

Solar Financing Challenges

Upfront Capital Cost Central Govt. policies / tax incentives / rebates / generation linked incentives SEB Purchase of Power Costs Long Term PPA Technology Upgradation Availability of Green Cess / Lower Cost of Funds Transmission issue for large power plants Feed-in tariff / Net metering for longer period at guaranteed rate Renewable Energy Certificates Need to develop a supply chain that can bring efficiencies to the system, from design to delivery and ultimate service in the field. Focus on market based incentive to force the manufacturers to invest in efficient supply chain.

Thank you

Indian Renewable Energy Development Agency Limited Core 4 A, India Habitat Centre, Lodhi Road, New Delhi 110003, India Email : b.v.rao@ireda.in Website: www.ireda.in