Govt to give renewables their moment in the sun

Posted on: September 12, 2019

In a renewed push to cut India’s dependence on fossil fuels, the central government wants state-run companies to build massive clean energy parks at a cost of around $2 billion each, with built-in incentives to ensure states and operators are invested in the success of the parks.

The proposed ultra mega renewable energy power parks (UMREPP) of 2,000 megawatts (MW) each will help developers achieve economies of scale and further bring down solar and wind power tariffs.

Setting up such parks will bolster India’s image as a clean energy champion at a time the world is grappling with concerns related to climate change. Clean energy projects now account for more than a fifth of India’s installed power generation capacity.

These green energy parks will be set up under the existing Solar Park scheme, which provides the building blocks—land and grid connectivity—and will be implemented by a special purpose vehicle (SPV).

“Various public sector undertakings have been urged to set up ultra mega renewable energy plants in major states in collaboration with state governments through SPV mechanism for these parks,” said Anand Kumar, secretary in the ministry of new and renewable energy, adding that the SPVs can either purchase land or take it on lease from state governments or private parties.

To get states on board and facilitate the requisite clearances, state governments will be paid 0.02 per unit of electricity generated from the projects over their lifetime.

The power ministry’s ultra-mega power project programme was India’s earlier attempt to create large power generation capacities at a single location. However, it has had its share of problems, weighed by environmental concerns and local resistance.

“The state governments will facilitate the SPV to identify and acquire land, and obtain required statutory clearances,” a government official aware of the plans said, requesting anonymity.

The SPVs will also be paid park development and operations and maintenance (O&M) charges by the developers, and 0.02 per unit on the electricity generated over their lifetime. The operators that will set up renewable energy projects such as wind or solar inside the clean energy park will be selected through tariff-based competitive bids.

India is seeking additional clean energy investment of around $80billion till growing more than threefold to $250 billion during 2023-30.

According to a government note reviewed by Mint, “the capacity of the UMREPP may be in the range of 2,000MW. However, the minimum capacity of any UMREPP at a single location may be 600MW where there is need for creation of new transmission system by CTU (central transmission utility). The UMREPP, connected to any existing transmission system of CTU/STU (state transmission utility), shall be of the size of 250MW at a single location. For floating solar PV (photovoltaics) parks, the minimum size should be 50MW”.

These mega solar park plans comes against the backdrop of Tesla, China’s Contemporary Amperex Technology Co. Ltd (CATL) and BYD Co. Ltd, among others, showing an initial interest in the Indian government’s plan to build large factories to make lithium-ion batteries at an investment of about 50,000 crore. Aimed at securing India’s energy needs, the plan to set up these 50 gigawatt hour (GWh) factories has been cleared by the expenditure finance committee, with the final tender expected to be awarded by February. Each gigawatt hour (1,000 megawatt hours) of battery capacity can power 1 million homes for an hour and around 30,000 electric cars.

The government wants to make India a global manufacturing hub for electric vehicles and their components. This is aimed at arresting the South Asian country’s reputation as the world’s third-largest crude oil importer, saving on precious foreign exchange and also controlling pollution in its major cities.

In what is being marked as a turning point for India’s green economy, investments in the country’s renewable energy sector doubled over the last five years to around $20 billion in 2018, surpassing the capital expenditure in the thermal power sector, according to a joint study by Paris-based International Energy Agency and Council on Energy, Environment and Water.

India has been trying to rejig its energy mix in favour of green energy sources. At present, India has an installed power generation capacity of 357,875MW, of which around 22%, or 80,000MW, is generated through clean energy projects. India has become one of the top renewable energy producers globally, with ambitious capacity expansion plans to achieve 175GW by 2022 and 500GW by 2030, as part of its climate commitments.

India’s diesel demand in August falls to a 10-month low

Posted on: September 12, 2019

A broad decline in automobile sales coupled with excess rainfall and floods in some parts of the country may have finally caught up with diesel demand in India, which fell to its lowest level in 10 months to 6,116 Thousand Metric Tonne (TMT) in August, data published by the oil ministry’s statistical arm Petroleum Planning and Analysis Cell (PPAC) showed.

Demand for the fuel in August 2019 declined 1.13 per cent to 6,116 TMT.

“Diesel demand fell 1.1 per cent year-on-year for the first time since Nov 2018 and may remain sluggish. Industrial production is soft as are foreign trade and port traffic with poor freight economics unlikely to lift CV sales too even if GST falls,” research and equity firm Jefferies said in a note.

While India’s overall petroleum consumption during the month increased 2.78 per cent to 17,044 TMT, the consumption recorded in the month was the lowest in the last eight months, historical data analysed by ETEnergyWorld showed.

The fall in automobile sales seems to have not impacted the country’s demand for petrol, which registered a growth for two years in a row. Petrol demand in August rose 9 per cent to 2,574 TMT.

The demand for Liquefied Petroleum Gas (LPG) increased 13 per cent to 2,396 TMT in the month, primarily due to an aggressive roll-out to achieve the target of rolling out 8 crore LPG connections under Pradhan Mantri Ujjwala Yojana (PMUY).

Demand for Aviation Turbine Fuel (ATF) declined marginally to 681 TMT in August as compared to 686 TMT recorded in the corresponding month last year.

Data also showed demand for pet coke in August increased 3.77 per cent to 1,786 TMT.

Solar-Home Systems & Mini-Grids: Same, Same But Different!

Posted on: September 12, 2019

By: Thomas Hillig

More than a billion people around the globe do not have access to electricity. In the vast majority, this is not because of a traditional lifestyle, so not by choice.

Generally, many developing countries have insufficient power generation infrastructure. Often only the major metropolitan areas are connected to the national grid and only urban inhabitants have a chance to access electricity. To include remote villages requires much more investment per connection. Building long transition lines to distant settlements can be extremely expensive.

In addition, many villages are scattered across large areas. Families live in huts or small houses and not in multi-story buildings like in urban regions. This means that also the costs of connecting several households within a village is much more expensive than in cities. Many poor countries do not dispose of the necessary financial means for extending their centralized power system to more decentral locations.

The solar power revolution has initiated an evolution that could overcome this unsatisfying situation. Solar allows for a more decentralized concept of power generation. Large solar power plants are also possible, but an attractive characteristic of solar power is that small generation units can be built in a relatively inexpensive way.

This gives hope for electrifying remote areas all over the world. No expensive grid extension projects are needed to reach remote areas. Decentralized power generation often does not require an infrastructure type of investment.

Solar-home systems (SHS): unconnected & completely autonomous electricity supply for individual households

SHS are micro-power plants with integrated energy storage that provide electricity to individual buildings or households. SHS typically provide DC power that can be used without any problems for lamps and mobile phone charging. For newly electrified households, these are typically the main power needs. The electricity from SHS is not fully comparable to AC power that we know in developed countries.

More sophisticated appliances like television, fridges or air conditioning typically require AC power. To overcome these limitations, SHS providers pursue two different solutions:

  1. Development and provision of DC appliances
  2. Conversion of DC power to AC power

DC solutions for television, refrigerators, or air conditioning are typically much more costly than standard AC appliances — comparing new to new. Already existing AC appliances cannot be used directly. Also, the new-to-new comparison is typically not very relevant in many developing countries as second-hand appliances play an important role.

Converting from DC to AC adds substantial extra costs and requires a certain size of the solar generator. Finally, some conversion losses need to be taken into consideration.

Certain voices in the international development community insist that developing countries merit the same power quality than western nations and that SHS would not be enough. These voices often pursue a different approach by favoring mini-grids.

Mini-grids: Miniature power plants, storage, & distribution on village-level

AC mini-grids resemble a miniature version of the power infrastructure that we know from western countries. Today, on the generation side, mostly solar power plants plus battery energy storage are used, often combined with diesel generators or biomass plants for securing the energy supply during bad weather periods or as a cheaper option during night time.

In comparison to standard grid infrastructure, mini-grids are much smaller: typical plant sizes are in the range of 10–35kWp solar and less than 100kWh battery energy storage for 150–400 connections. Another difference is the missing interconnection through transmission lines between different units. Mini-grids are typically isolated and completely autonomous. AC mini-grids provide electricity of high quality that can be used by private, commercial and small industrial off-takers. Well-designed mini-grids are considered to provide electricity of a quality that is comparable to sophisticated national grids.

The downside is that mini-grids require investments in a rather complex and stationary power generation and distribution infrastructure.

Innovation is driving the development of SHS & mini-grids: a new generation of smart meters

A new generation of relatively inexpensive smart meters that can be coupled with mobile money solutions allows for remotely controlling energy sales in an automated way. Pay-as-you-go (PAYGo) systems allow for setting up payment methods for decentral energy sales that imitate pre-paid mobile phone solutions. The end-customer must “top up” his energy account before consuming the electricity. This approach enables SHS- or mini-grid-operators to manage the payment behavior in an automated way and to optimize the money collection process. The approach avoids losses due to failure of payment. The downside is that the solar power output is determined at the moment of the investment when the technical parameters of the plant are specified. If the electricity from a system is not consumed it cannot be sold elsewhere. Forecasting future electricity needs is a key discipline — above all for mini-grid developers as mini-grids can hardly be removed after construction. SHS companies face more flexibility. In case of non-payment, it is relatively easy — at least from a technical point of view — to dismantle, remove and relocate SHSs.

Solar! Electricity for all? Leaving no one behind?

The business case is however not easy. Both SHS and mini-grid companies have to choose their customers carefully in order to come up with an economically viable business case. SHS providers choose the best customers on a country level or from certain regions in which they operate. Not everyone can afford solar energy. Minigrid developers make two choices: first, they choose a village, then they chose in a particular village the customers that can pay for electricity and that are easy to access. Often, within the village, they are less demanding than SHS providers.

As a certain willingness and ability to pay for solar power is required, both approaches have the tendency to address primarily the rural middle class. Subsides that are often incorporated in both approaches do not reach the poorest of the poor. It becomes obvious that development efforts must be undertaken beyond electrification.