The Solar Energy Corporation of India (SECI) was established in 2011 under the Jawaharlal Nehru National Solar Mission, with the single-point agenda to rapidly increase the adoption of solar technologies. It is now expanding the scope of its work to promote all forms of renewable energy. Dr Ashvini Kumar, managing director, SECI, discusses SECI’s achievements during the past year, the future outlook for solar energy in India and more…
What have been SECI’s key achievements during the past year?
SECI has been highly active in the viability gap funding (VGF) scheme and rooftop projects in the past year. We brought out tenders under the VGF scheme. A total of 4,500 MW was auctioned under the scheme. Another highlight of the previous year was the commissioning of SECI-owned 10 MW of solar capacity. Besides these, our power trading segment is doing well. On the international level, SECI, a founder donor of the International Solar Alliance to which it has donated $1 million, has decided to have its own foreign arm to increase its presence in the international markets. In addition, the tender for 1,000 MW of SECI’s wind power capacity is out, which marks a leap into the wind power segment, expanding our horizons.
What are the key highlights of the wind tender and what does SECI expect from it?
Wind energy in the country has been plagued by one of the most significant issues facing the segment currently – a choked system. Wherever there was wind potential, projects were set up on state transmission utility levels that would keep the power within the state. We believe that for any renewable energy technology to grow, it has to travel from one state to another. To this end, ours is the only tender that has taken the much opposed competitive bidding route and will ask developers to connect the capacity at the central transmission utility (CTU) level. It is noteworthy that SECI’s 1,000 MW capacity will only be installed in the eight windy states, which will be connected to the CTU and marketed to the non-windy states. This will ensure that the power is not stuck only in the host state, while also allowing non-windy states to fulfil their non-solar renewable purchase obligations.
What are some of the key challenges that have remained unresolved in the country’s renewable energy sector?
The issue of skewed demand remains and the solution comes down to the willingness and financial capability of the distribution companies to buy more power and the generation of new demand to absorb the power being produced. Despite these challenges, the renewable energy sector continues to do well for various reasons – the cost of components is falling and the government is becoming increasingly proactive, creating a more enabling policy framework. Financing too has improved with the influx of more funds, although it has its own problems, given the magnitude of investment required to reach the target of 175 GW. One challenge in this aspect is the Indian investment versus the foreign infusion of funds. In the case of solar technology, foreign investors are seen to be more comfortable with investment in solar parks, whereas domestic investors are more interested in non-solar park categories.
Another challenge is to scale up the country’s solar manufacturing capacity to make solar cells and modules available at competitive prices. Aside from some manufacturing capacities that are coming online, for instance Adani’s 1,200 MW, which will be available by March 2017, not much new capacity is expected. However, significant policy changes are being mulled over by the government to facilitate manufacturing in the country as part of the domestic content requirement.
What has been the progress on solar parks?
A total of 34 solar parks have been approved, which are progressing well. Andhra Pradesh, the leading state in this category, has four solar parks with a total capacity of 4000 MW. Rajasthan has five with over 3200 MW capacity, followed by Madhya Pradesh (2750 MW) and Karnataka (2000 MW). India’s contribution to the solar world in the form of these parks has become competitive with not only traditional solar states but also non-solar-intensive states vying for approvals, notable among which are the north-eastern states. Arunachal Pradesh, Assam, Meghalaya and Nagaland are all surprisingly eager to participate in the country’s solar boom. Also, another scheme for the auction of 20,000 MW solar parks is being launched soon. Along with the 20,000 MW in the first phase, a total of 40,000 MW is already in place to be developed for the solar industry in the country.
How much capacity has been tendered so far?
About 20 GW of solar capacity was auctioned with a vision to achieve 12 GW during 2016-17. This includes tenders released by NTPC, under the bundling scheme and states programme. Currently, the total installed capacity is nearing 9 GW and projects with cumulative capacity of over 12 GW are under development. SECI has very recently brought out a tender for 750 MW in Rajasthan. In addition, about 2.5 GW of capacity is envisaged during the year in UP, Haryana, Himachal Pradesh and other states. Besides, we are working to bring another 1-1.5 GW of capacity under the engineering, procurement and construction mode.
What are the tariff trends that you foresee?
There is always a latent desire for the tariff to continue its free fall but at the moment it is hovering in the lower range due to a rapid decline in the cost of the modules. According to the industry, there can still be some correction, of about 10 per cent, in the tariffs. However, the more important aspect is ensuring the quality of the components. Owing to increased cost competitiveness, cost cutting has become a major issue. To this end, we have stringent technical specifications and standards to be followed, which are strictly monitored. There are issues that need to be smoothened and all agencies and companies, including SECI, need to be increasingly vigilant about the quality parameters to sustain investor confidence in the sector.
SECI is experimenting with unconventional solar solutions. What is the progress in these technologies?
SECI decided to sensitise the industry and move a step ahead of the market, which is still using traditional technologies. To this end, we have floated two tenders – one in Andhra Pradesh and another in Karnataka. Solar-wind hybrid is the important emerging technology, which should be adopted wherever possible. We are working on setting up about 400 MW of solar-wind hybrids at new wind sites, along with a storage component in the plants. These projects have been approved in principle by the World Bank. Also, in areas that have more water and not much land, such as Kerala and Lakshadweep, we are looking at the option of floating solar. Since it is not yet a mainstream technology and has only a few developers, the prices are much higher. There is a niche market for canal bank and canal top systems, which are currently at the experimental stage. We are also collaborating with ports, airports, metro stations, etc. for solar installations.
What is your opinion on storage technologies? What is the status of SECI’s pilot projects in this segment?
We feel that economically feasible storage technologies could solve the electricity problem of the nation. We are focusing on a few endeavours at the moment. Besides exploring the use of storage in commercial projects as mentioned, SECI is implementing a 2.5 MW is an already tendered 2.5 MW pilot project, which brings together hybrid technology and storage at Kaza, Himachal Pradesh. Of this, 2 MW is solar based, 0.5 MW is wind based and at least 1 MW is the storage capacity associated with the plant.
What is your outlook for the sector? How will SECI’s role evolve over time?
The renewable energy sector in India, especially solar, is shining at the moment. About 20 GW was tendered last year and we are hoping that the installed capacity will reach 12-15 GW this year. It is being seen that the development of projects is taking longer than expected as so much capacity is under implementation under various central/state schemes. However, owing to the interest generated over the years, we have been able to convince investors that investments in this sector are less risky, which translates to a great future. As compared to the conventional forms of power generation, the uncertainty factor is much less in this sector. In the short term, hybrid technologies, storage solutions and increasingly efficient modules will see greater adoption, while in the mid-term, we expect some disruptive technologies to come online. Rigorous R&D is being undertaken in laboratories towards this end. Cost of storage is being watched seriously as expansion in the use of batteries would be decided based on these trajectories.
SECI needs to focus on the efficient and timely implementation of solar schemes and use this to leverage increased investment in the sector. At the same time, it wishes to add its own installations to the country’s expanding renewable energy capacity, at least 500-1,000 MW over the next couple of years. SECI’s role is expanding beyond the realms of solar into wind energy. Our endeavour is to bring SECI to a point where it becomes synonymous with solar energy. For that, consolidation of various functions would probably be required including single-window approvals, bringing technologies from lab to field, quality control through standardisation and skill development. Policy research and advocacy are the other important functions that SECI aims to pursue.
Dr Ashvini Kumar is Managing Director, SECI.