Solar Energy sector :- Huge Ocean of Opportunities for India.

Solar Energy sector :- Huge Ocean of Opportunities for India. ************************************************************************* Abstract:- ********************************************************************************* India, the world’s third largest energy consuming economy after the US and China, plans to achieve 175 GW of renewable energy capacity by 2022. India currently has an installed power generation capacity of 250 GW as on July 2014. India is densely populated and has high solar insulation, an ideal combination for using solar power in India. Part of waste lands (32,000 square km) when installed with solar power plants can produce 2,000 billion Kwh of electricity (two times the total generation in the year 2013-14). 2019, according to some estimates, India could achieve grid parity between solar and conventional energy sources. In the year 2017, we will see prices fall below Rs4 a kilowatt-hour for sure and it will be viable. India’s share of global energy demand will increase to 9% by 2035. India imports around 80% of its crude oil and 18% of its natural gas requirements. The government aims to effect a 10% cut in energy imports by 2022 and a 50% cut by 2030. India’s energy import bill of around $150 billion, expected to reach $300 billion by 2030. Coal remains the dominant fuel produced in India with a 65% share of total production in 2035. Renewables overtakes oil as the second largest, increasing from 4% to 14% in 2035. Currently, India requires 1,068,923 million units of electricity annually but the supply falls short by 3.6%. The price of solar energy has fallen by half over two years, with prices dropping from Rs 10-12 per unit to Rs 4.63 per unit in 2015. India could make renewable resources such as solar the backbone of its economy by 2030. Land acquisition is a challenge to solar farm projects in India. India has a target of setting up 100 GW of solar capacity by 2022. ******************************************************************************* Introduction:- ********************************************************************************* India has the fifth largest power generation capacity in the world. The country ranks third globally in terms of electricity production Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of nations. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy. India, the world’s third largest energy consuming economy after the US and China, plans to achieve 175 GW of renewable energy capacity by 2022 as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in December 2015. India’s renewable energy sector has been ranked third in the Renewable Energy Country Attractiveness Index (RECAI) with China at second and the US on top. India currently has an installed power generation capacity of 2,50,256.95 MW as on July 2014, of which 59.61% is from coal based thermal generation, 9.03% is from natural gas, 0.48% from oil, 16.30% from hydro-power, 1.91% from nuclear power and 12.67% from renewable energy sources. Recent growth has been over 3,000 MW per year. It is reported that cumulative capacity of photovoltaic (PV) cells was 6763 MW in 2016. It is reported that 7.45 billion Kwh solar power generated in 2015-16, while it was 4.6 Kwh in 2014-15 and 3.35 kwh in 2013-14. ******************************************************************************* Why Solar Energy :- ******************************************************************************* India is endowed with vast solar energy. There are vast tracts of land suitable for solar power in all parts of India exceeding 8% of its total area which are unproductive barren and devoid of vegetation. The amount of land required for utility-scale solar power plants — currently approximately 1 km2 (250 acres) for every 40–60 MW generated India is densely populated and has high solar insulation, an ideal combination for using solar power in India. 1.33 million MW capacity solar plants can be installed in India on its 1% land (32,000 square km). Part of waste lands (32,000 square km) when installed with solar power plants can produce 2,000 billion Kwh of electricity (two times the total generation in the year 2013-14) with land annual productivity/yield of Rs. 1.0 million (US$15,000) per acre (at 4 Rs/kwh price) which is at par with many industrial areas and many times more than the best productive irrigated agriculture lands. India’s solar capacity is still small compared with China, the world’s largest solar market, and Japan. According to a Bloomberg report in December 2016, the cost of solar power in India, China, Brazil and 55 other emerging market economies dropped to about one third of its price in 2010, making solar the cheapest form of renewable energy and also cheaper than power generated from fossil fuels such as coal and gas. 2019, according to some estimates, India could achieve grid parity between solar and conventional energy sources. In the year 2017, we will see prices fall below Rs4 a kilowatt-hour for sure and it will be viable,” (Source:- Rahul Munjal, chairman and managing director of Hero Future Energies Pvt.) India is ranked number one in solar electricity production per watt installed, with an insolation of 1700 to 1900 kilowatt hours per kilowatt peak (kWh/KWp). There’s been a steady decline in solar power prices—on the back of cheaper solar panel costs and lower financing costs—that has made the sector increasingly attractive to investors. In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate electricity from sunshine for less than 3 cents a kilowatt-hour, half the average global cost of coal power. After falling 30% last year, the price of ordinary multi-crystalline silicon modules is expected to fall another 20% in 2017, according to London-based BNEF. ******************************************************************************* Current Condition of Energy Sector:- ******************************************************************************* Solar power in India is a fast-growing industry and as of 31 December 2016, the country's solar grid had a cumulative capacity of 9,012.66 megawatts (MW) or 9.01 gigawatts (GW). As on 31 December 2016, thermal power capacity accounts for 69% of the country’s 310 gigawatt (GW) power generation capacity, while solar power account for 2.7%. Solar installations in India is expected to reach 4.8 GW in 2016 with a 21 GW development pipeline. During 2017, the solar sector is likely to add close to 9 GW of capacity—taking its overall capacity to 18 GW ******************************************************************************* Goverments effort Solar Energy:- ******************************************************************************* Compared to last year (Rs5,036 crore), this year the allocation to the Ministry of New and Renewable Energy stands at Rs5,473 crore. India currently has 5,000 MW of solar power installations; so the government’s target is a 20-fold jump over the next seven years. From the current solar power generation capacity of 4 GW (gigawatt), it wants to produce as much as 100 GW by 2022—with a target of attracting a staggering $100 billion into the sector over the next seven years. ******************************************************************************* Need of Solar ENergy in India: ******************************************************************************* In 2015, only 55% of all rural households had access to electricity, and 85% of rural households depended on solid fuel for cooking. Lack of electricity infrastructure is one of the main hurdles in the development of rural India. India imports around 80% of its crude oil and 18% of its natural gas requirements. India imported 202 million tonnes of oil in 2015-16. India’s energy consumption is expected to grow by 4.2% annually, faster than all major economies in the world. As a result, India’s share of global energy demand will increase to 9% by 2035, The government aims to effect a 10% cut in energy imports by 2022 and a 50% cut by 2030. India’s coal-fed power plants—which contribute to nearly 60% of the total production Energy in transport grows by 5.8% per year and oil remains the dominant fuel source with a 93% market share in 2035. India’s energy demand growth at “129% is more than double the non-OECD average of 52% and also outpaces each of the BRIC (Brazil Russia India China) countries as China (47%), Brazil (41%), and Russia (2%). India’s energy import bill of around $150 billion, expected to reach $300 billion by 2030. India’s demand for gas expands by 162%, followed by oil (120%) and coal (105%). Renewables rise by 699%, nuclear by 317% and hydro by 97% by 2035. Natural gas consumption would jump from 4.9 billion cubic feet per day to 12.8 bcfd while coal consumption is project to more than double to 833 million tons. India’s energy demand growth at “129% is more than double the non-OECD average of 52% and also outpaces each of the BRIC (Brazil Russia India China) countries as China (47%), Brazil (41%), and Russia (2%), Its share of global energy demand increases to 9% by 2035, accounting for the second largest share among the BRIC countries with China at 26%, Russia at 4% and Brazil at 2%. The fuel mix evolves very slowly over the Outlook (period) with fossil fuels accounting for 86% of demand in 2035, compared to 92% today. The share of coal in the fuel mix falls from 58% to 52% by 2035, while the share of renewables rises from 2% to 8%,” Coal remains the dominant fuel produced in India with a 65% share of total production in 2035. Renewables overtakes oil as the second largest, increasing from 4% to 14% in 2035 as oil drops from 10% today to 3% by 2035. Power requirement in India is estimated to grow at an average of 5.2% during the 10 years between 2014 and 2024, according to a report by Tata Power . Currently, India requires 1,068,923 million units of electricity annually but the supply falls short by 3.6%. Solar power generation cost has reduced close to Rs 3 per kWh for the 750 MW Rewa solar power project which is cheaper than any other type of electricity generation in India India's energy demand growing at 2.8% per year. The price of solar energy has fallen by half over two years, with prices dropping from Rs 10-12 per unit to Rs 4.63 per unit in 2015, the price at which Sun Edison, a US company, offered to supply electricity in Andhra Pradesh recently, closely followed by another project. At these levels, solar power is competitive with newly-built thermal, hydro and nuclear power plants. Asia’s second biggest energy consumer since 2008, had in 2015 overtaken Japan as the world’s third largest oil consuming country behind US and China State power utilities lose money, they are often unable to supply electricity round the clock. As a result, many industrial and commercial users have backup diesel-run generation sets. During 2013-14, more than 2 million tonne diesel was consumed by industrial users to make up for irregular power supply. ******************************************************************************* Solar Energy Available for India:- ******************************************************************************* Challenges faced ******************************************************************************* India needs as much as $200 billion to meet its target to install 100 GW of solar power and 60,000 megawatts (MW) of wind power by 2022. ******************************************************************************* Advantage of Solar Energy:- ******************************************************************************* Solar Energy projects take less than a year for commissioning, unlike large thermal power plants, which take many years for construction. Many large manufacturing and services firms are also setting up captive solar power plants as industrial power tariff is higher than solar power due to the cross-subsidy burden. India pipped Japan to become the top importer of solar cells and modules from China for three out of 10 months last year and the trend will continue in 2017, according to Xiaoting Wang, a Hong Kong-based solar analyst at BNEF. Solar power tariff, which was above Rs12 a unit in 2010, has gradually declined. In the auction in November 2016, projects were awarded to sell power at Rs3 a unit for 25 years in Uttarakhand, Himachal Pradesh and Puducherry. industrial and commercial users pay above-market prices for electricity in India, and this is pushing them towards solar power. Second, irregular supply forces many industrial users to install backup in form of diesel generators, which are even more expensive. India now has a captive-generation capacity of 36,500 mega watts (MW), or the equivalent of 15% of the country’s conventional power-generation capacity. India’s state power utilities lose 23% of the electricity they generate to transmission losses (including theft), as IndiaSpend has reported, and 22% as subsidised or free electricity to farmers. To make up for these losses, other consumers–particularly industrial and other commercial users–are charged up to 50% to 90% more than other consumers. ******************************************************************************* INDIA's effort towards Solar Energy Setor:- ******************************************************************************* Jawaharlal Nehru National Solar Mission (JNNSM) The Jawaharlal Nehru National Solar Mission, also known as National Solar Mission, is one of the eight key National Mission’s which comprise India’s National Action Plan on Climate Change(NAPCC). NAPCC was launched on 30th June 2008 which identified development of solar energy technologies in the country as a National Mission. National Solar Mission is being launched under the brand name “Solar India”. In January 2016, the Prime Minister of India, Narendra Modi, and the President of France, Mr. François Hollande laid the foundation stone for the headquarters of the International Solar Alliance (ISA) in Gwalpahari, Gurgaon The Indian Solar Loan Programme, supported by the United Nations Environment Programme has won the prestigious Energy Globe World award for Sustainability for helping to establish a consumer financing program for solar home power systems. On 18 August 2015, Cochin International Airport became the world's first fully solar powered airport with the inauguration of a dedicated solar plant. The total budget is further split between Rs3,361 crore for solar and only Rs408 crore for wind, a clear indication that the government will continue to prioritise solar. the budget extends support to power 2,000 railway stations through solar, under the Indian Railways 1GW solar mission. residential rooftop projects could create 15 GW of renewable energy capacity in India by 2022. replacing 15% of India’s irrigation pumps with solar pumps could build 20 GW of capacity. ******************************************************************************* Achievements of India in the field of Solar Energy:- ******************************************************************************* Cochin International airport , he first airport in the world that completely operates on solar power. It has 46,150 solar panels laid across 45 acres near cargo complex. Now, Cochin airport's solar power plant is producing 50,000 to 60,000 units of electricity per day to be consumed for all its operational functions, which technically make the airport ‘ absolutely power neutral ‘. The Kolkata Airport has just finished installation of a 2-MW rooftop solar plant and wants to follow up with a 15-MW solar farm. Public-sector oil companies have also started to adopt renewable power for their operations, with 3,135 petrol pumps using solar power. Indian Oil leads; it has converted 2,600 of its petrol pumps to operate on solar energy. Technology major Infosys has just completed a 6.6-MW solar plant at one of its software development centers in Telangana, which is now completely run by renewable energy. Infosys is already building a 40-MW solar farm and plans to add 110-MW solar capacity in the next two years. RBL Bank, a small private sector lender, has also decided to go solar in a small way at 10 of its branches, with rooftop solar panels. Tata Power recently installed a 12-megawatt rooftop solar plant at an educational institute in Amritsar. India currently has around 1.2 million solar home lighting systems and 3.2 million solar lanterns sold or distributed. In addition, India has been ranked the number one market in Asia for solar off-grid products. The report also cited a $64 per megawatt-hour solar power contract signed in India in early 2016, as proof of "remarkable falls in the price of electricity from solar sources" India could make renewable resources such as solar the backbone of its economy by 2030 ******************************************************************************* Investment in Solar Energy sector:- ******************************************************************************* On June 22, a fairly sizeable chunk of that goal was met, when Japan’s SoftBank, along with telecommunication major, Bharati Enterprises, and Taiwan’s electronic goods manufacturer, Foxconn, announced plans to invest $20 billion for setting up 20 GW of solar power in the country. Adani Power, Reliance Power and SunEdison,have also committed investments worth more than $5 billion for setting up solar power plants in India. 2015, a cumulative total of just under 1 million solar lanterns had been sold in the country 30,256 solar powered water pumps for agriculture and drinking water had been installed During 2015 alone, 118,700 solar home lighting systems were installed, 46,655 solar street lighting installations were provided over 1.4 million solar cookers distributed or sold in India. ******************************************************************************* Challenges faced by the Investors:- ******************************************************************************* Solar-electricity cost is competitive with grid power, but it is available only for about five or six hours every day. For the rest of the day, users must rely on the grid or store energy in batteries, which can be expensive. Land acquisition is a challenge to solar farm projects in India. India has a target of setting up 100 GW of solar and 60 GW of wind energy capacity by 2022. The growing energy sector requires $250 billion in investments to reach this target. According to the government, India has a renewable energy potential of around 900 GW from sources such as wind, solar, small hydro and bio energy. Solar, alone, would require $100 billion in debt to reach 100 GW ******************************************************************************* Achievements of India In Solar Energy Sector: ******************************************************************************* ‘Rooftop solar’ – solar panels fitted on rooftops of houses, factories and commercial establishments – reached 525 MW across India by October 2015, of which 75% has been installed either by industrial or commercial users, according to Bridge to India estimates. The next 12 months should see another 455 MW of rooftop capacity, said the company. Mercom, another consulting firm, expects India to add 2,150 MW of solar capacity in 2015 and 3,645 MW in 2016. the Ujjawal Discom Assurance Yojna – to restructure the debts of power distribution companies and reduce the cost of electricity. Rooftop solar plants are usually enough for a single user, a home-owner or a factory. Their popularity indicates costs are competitive. Around 293 global and domestic companies have committed to generate 266 GW of solar, wind, mini-hydel and biomass-based power in India over the next 5–10 years. The initiative would entail an investment of about US$ 310–350 billion. Between April 2000 and March 2016, the industry attracted US$ 10.48 billion in Foreign Direct Investment (FDI).