In conversation with MR. RAJNEESH RANA, General Manager- Contracts & Business Development, Energy Efficiency Services Ltd. (EESL)
YOUR VIEWS ON THE PROGRESS OF SOLAR ENERGY SECTOR IN INDIA. WILL INDIA BE ABLE TO ACHIEVE THE SET TARGET?
The Solar energy sector in India has immense potential and in the last 4 years, solar capacity has increased by over 8 times to 22,000 MW. With nearly 300 days of sunshine every year, the World Bank has described “India has among the best conditions in the world to capture and use solar energy”. No doubt, India has emerged as one of the top three solar markets in the world after China and the US. According to a report by US-based think tank Institute for Energy Economics and Financial Analysis (IEEFA), half of the world’s 10 largest solar parks under construction currently are in India. Further, the International Energy Agency (IEA) has pointed out that India’s renewable energy capacity will more than double by 2022, which would be enough to overtake renewable expansion in the entire European Union!
This ongoing increase in solar power capacity over a short period of time comes in the wake of the government’s push for renewable energy, and its target of installing 175 GW of renewable energy (100 GW of this is from solar) by 2022. With strong focus on solar power, innovative solutions and energy efficiency initiatives to supply 24x7 electricity by 2030, India is evolving as a front runner in the global fight against climate change
Like it is with any new technology, in solar as well, in spite of the initial challenges and uncertainties, we believe it can become a key component of India’s energy portfolio in the coming years.
HOW IS EESL SUPPORTING THE GROWTH OF SOLAR ENERGY SECTOR IN INDIA?
India has firmly established solar energy as its leading pathway to a sustainable energy future. Bringing solar to the grid can provide an affordable, renewable, and low-carbon source of energy that can power India’s underserved regions. Towards this goal, the Ministry of New and Renewable Energy (MNRE) launched the Atal Jyoti Yojana (AJAY) to illuminate dark regions across five states through solar power with high mast solar LED street lights. These lights will be installed on major roads, markets, and public places, thereby contributing to safety, and enabling a better quality of life. EESL is implementing the programme in rural, semi-urban, and urban areas that face less than 50% grid connectivity in Uttar Pradesh, Assam, Bihar, Jharkhand, and Odisha with 300,000 high- mast solar LED street lights.
MNRE’s 70 Lakh solar study lamps scheme is another programme that aims to empower 70 lakh rural students with solar study lamps in the cheapest and fastest possible way. EESL, along with IIT Bombay, is implementing the scheme in Assam, Bihar, Jharkhand, Uttar Pradesh, and Odisha. So far around 17 lakh solar study lamps have been distributed under this programme.
EESL is also working in solarising India’s water pumps. Solar power provides a viable alternative to meet power requirements of farmers during day time. With India’s abundant daytime sunlight, the pump sets can irrigate the farms during the day time. Being traditionally subsidy- driven, the farmers face high capital costs reducing uptake for solar pumps as compared to diesel and electric variants. We are working to provide reliable solar power supply to agricultural pump sets by setting up solar mini-grids. Solar powered PV pump sets can be used to irrigate the farms during the day time, thereby reducing dependence on diesel fuel and day time electricity. We will finance, design, install, own, and operate solar PV pumping on farms. The renewable solution will make it possible for farmers to receive considerable revenue monthly by selling the excess power to the grid for a period of 25 years. With enough and affordable irrigation, farmers will reap the benefits of increased crop yield. We will be providing star-rated pumps with VFD/Controller, and financing and installation, as well as free repair and maintenance for the contract period.
WHAT ARE THE CHALLENGES FACED BY THE SOLAR INDUSTRY IN INDIA?
One area of concern remains the rooftop solar segment. As per a report by Crisil, using the rooftops of commercial and industrial units to generate their own power and depend less on the grid—is 40 GW by 2022. Crisil expects this figure to be not more than 8 GW by 2023, because the cost of power here is expected to be far higher than from the grid.
It was also observed that there has been a slowdown in new capacity additions, after implementing two years of growth across renewable energy projects. Diversion of a national clean-energy cess to subsidise GST-induced losses and a new import duty to protect domestic manufacturers of solar equipment have led to a go-slow pace in the sector.
Dust, high temperatures and the dearth of water are also leading to a significant increase in the cost of operating solar power plants in the country. Some of these factors, such as the level of dust particles and the type of dust, vary from region to region within the country, while other factors such as the hardness of the water and the shortage of a skilled labour force are more general problems faced by plants across the country.
AS OF TODAY, WHICH ARE THE KEY STATES INTO WHICH THE DEVELOPERS ARE KEEN TO INVEST?
The states which have a significant potential include Rajasthan, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Gujarat, Maharashtra and Chhattisgarh. These states are attracting mega power plants and the reason is more number of sunny days and land availability.
WOULD YOU LIKE TO SHARE ANY CURRENT ISSUES AND AGENDA ON WHICH EESL IS CURRENTLY WORKING ON?
Energy Efficiency Services (EESL), a pioneer in implementation of energy efficiency initiatives in India as well as overseas developed business models for the rooftop owners – CAPEX and RESCO. Under Capex model, the rooftop owner will bear the upfront cost of the system while EESL will ensure complete system warranty for five years. Under RESCO model, EESL will bear the upfront installation costs for the system and once the system has been installed and commissioned, the power generated will be billed to the consumer at Rs 3.87/kWh with a nominal year on year escalation. These tariffs are about 40% lower than the prevailing DISCOM commercial tariff and provides immunity to the rooftop owners on tariff variation for 25 years. The tariffs offered is without considering the subsidy or viability gap funding. Apart from operation and maintenance we would also design, supply, install and commission the solar PV power projects for a period of 25 years. We are also striving at eliminating the subsidy burden on the central or state governments.
In this regard, recently, EESL initiated two programmes. One is for solar rooftops mainly for the government buildings, schools, institutions, In the other programme, EESL is in the process of developing solar PV based projects for agricultural pump sets, small power plants on vacant unused lands at substations in various states across the country. EESL has partnered for powering rural sub- stations for agricultural purposes. Since there are several substations that feed agricultural pumps in the state and there is a land available where mini-solar plants with a range of 0.5 MW to 2 MW would be set up by us. The tariffs would be at Rs 3 per unit for almost 25 years which is half the rate of grid-connected power. The lower cost of tariffs on offer is also due to the procurement of indigenously made solar power panels at very competitive prices.
WHAT ARE THE POLICIES THAT SHOULD BE IMPLEMENTED BY GOVERNMENT FOR FURTHER UPLIFTMENT OF THE SECTOR?
When it comes to meeting targets, the need of the hour is to have uniform policies by the government around net metering that will allow users to sell surplus power to electric utilities. Increased support from state electricity utilities and distribution companies will also be critical here. The entire government machinery will also have to make more investments in the solar power domain to increase contribution from developers and investors.
India should also create a facilitative environment and redouble efforts to promote financing for clean energy. The country must address various issues which are impeding growth of clean energy, and create a level playing field while enabling growth for solar and other forms of energy. Policy should be in place especially for rooftops, DISCOMS should be partnered along with implementing agencies. If there is any subsidy, then it should be passed on to DISCOM for rooftops and agricultural pumps.