Set to Sail

Floating solar gains traction as land issues increase

If a 1 MW solar power project requires 4-5 acres of land for development, vast land banks will be needed for meeting India’s 100 GW solar power target. Moreover, solar power projects are location dependent and sites with high resources are fast getting depleted. The limited availability of resource-rich sites, increasing land prices and complicated land transfer procedures have made the entire process of land acquisition cumbersome for developers. This has often led to the postponement of tenders and delays in project commissioning, impacting the timely implementation of hundreds of megawatts of capacity. Land acquisition continues to be one of the most critical issues in setting up solar power projects, which is putting a dent in India’s ambitious solar plans.

Floating solar projects that can be set up on waterbodies instead of land are emerging as an important solution to the land problem. Not only do they save on land costs and avoid acquisition delays, thereby freeing up developers and governments from the hassles of finding large tracts of uncultivated land, they also promise higher efficiencies and are easier to implement than their ground-mounted counterparts. Studies have shown that installing solar modules on waterbodies has a cooling effect, which lowers the temperature, thereby improving the energy yield from the solar project. Further, soiling losses are reduced owing to the deposition of less dust on the module surface. Floating solar projects do not require complex civil work such as land levelling and thus have a shorter gestation time than ground-mounted solar projects. Going forward, the market potential and cost considerations will determine the large-scale uptake of floating solar projects.

Synergies and cost considerations

India has a large number of waterbodies such as lakes, ponds and reservoirs, which are suitable for deploying floating solar projects. Even if only thermal and hydropower plant reservoirs were used, a huge floating solar capacity of about 628 GW could be installed, as per Renewable Watch Research estimates. Setting up floating solar capacity on these vast unused water reservoirs frees up land for other essential purposes such as agriculture and housing. It also helps optimally utilise the existing power evacuation and transmission systems. Moreover, the implementation time is reduced, and these projects can be brought online faster than their ground-mounted counterparts.

In terms of cost, floating solar projects are priced up to 20 per cent more than ground-mounted projects. This is mainly due to their small scale and the evolving floating platform technology. Once the market matures and domestic float manufacturing gains pace, the project costs for floating solar plants will reduce. These projects are free from land purchase-related issues, which strengthens their business case. Going forward, improvements in technology, reduction in solar module and float costs, economies of scale and increase in competition are expected to result in an overall decrease in project costs. Another factor that could drive down costs and increase competition is tariff-based bidding. As seen in the case of ground-mounted solar projects, auctions have been successful in rapidly bringing down tariffs. Thus, while most floating solar projects are being tendered for engineering, procurement and construction (EPC), tariff-based competitive bidding is also gaining traction in this space and may help lower costs.

A strong project pipeline

In the past few months, the floating solar segment has witnessed a spate of project proposals and tenders from across the country, as both public and private agencies intend to capitalise on this massive opportunity. An impressive 2.8 GW of approximate floating solar capacity has been announced from various implementing agencies to be developed in the near future. The biggest announcement came from the Damodar Valley Corporation in September 2020. It proposed 1.7 GW of floating solar projects along four of its dams in West Bengal and Jharkhand. These are the Maithon, Tilaya, Konar and Panchet dams. Project development will be carried out in three phases, with the first being 50 MW. The feasibility study of the solar projects has been carried out by the Solar Energy Corporation of India (SECI). A tender has already been floated for the first phase and is set to be developed in Panchet, Jharkhand.

Soon after, Singareni Collieries Company Limited announced its plans to develop floating solar power plants with a cumulative capacity of 500 MW in Telangana, with the support of the Telangana State Renewable Energy Development Corporation (TSREDC). To this end, TSREDC has taken up a feasibility study. The proposed sites will be large waterbodies in Karimnagar and Warangal, among other districts. The projects may also be developed in multiple phases.

Similarly, NHPC signed an MoU with Green Energy Development Corporation of Odisha Limited (GEDCOL) to form a joint venture for developing 500 MW of floating solar projects in Odisha. NHPC and GEDCOL plan to collaborate to form a joint venture company to develop techno-commercially feasible floating solar power projects under the Ultra Mega Renewable Energy Power Parks Scheme of the Ministry of New and Renewable Energy. This may be done in a phased manner, preferably in packages of 50 MW each. The total expected investment for this project is Rs 25 billion. According to NHPC, the incubation period for conceiving each solar project will be around seven to eight months, which includes the preparation of the detailed project report and the award of work through bidding. The approximate completion time for each conceived project will be around 18 months. The first phase of the project is likely to commence by March 2022.

Apart from these big-ticket announcements, a slew of small projects were bid out. In November 2020, SunSource Energy emerged as a winner in SECI’s tender for the development of a 4 MW grid-connected floating solar project along with a 2 MW/1MWh battery energy storage system. The project will be situated at the Reservoir of the Kalpong river at the Kalpong Hydroelectric Project Dam in Diglipur, North Andaman, a district of the Andaman and Nicobar Islands. SunSource Energy will sign a power purchase agreement for 25 years with the Electricity Department, Andaman & Nicobar administration for the project.

In January 2021, the Ministry of Defence invited expressions of interest for the development of a combined ground-mounted and grid-connected floating solar project on a turnkey basis at the Cordite Fac-tory in Aruvankadu, Tamil Nadu. Developers will be required to set up the projects on designated lakes and land in the area. About 4,200 square metres of land and 11,700 square metres of the lake area have been allotted for the solar capacities.

In February 2021, West Bengal Power Development Corporation Limited floated a tender for the development of a 5 MW grid-connected floating solar power project at the Santaldih Thermal Power Station in Purulia, on Raw Water Pond no. 1. The project is estimated to cost Rs 348.4 million. Similarly, Tumakuru Smart City Limited has invited bids for the development of a 20 MW floating solar power project at the Bugudanahalli reservoir in the district.

Finally, a hybrid power project with a hydroelectric capacity of 20 MW and floating solar capacity of 80 MW has been approved by the Municipal Corporation of Greater Mumbai (MCGM) on the Middle Vaitarna Dam. This dam supplies water to Mumbai’s metropolitan region. MCGM has also announced that it will form a joint venture between Shapoorji Pallonji & Company and Mahalaxmi Konal Urja. The power will be purchased at a set tariff of Rs 4.75 per kWh for 25 years. MCGM had floated a tender in November 2020 for the said project.

The way forward

Floating solar is commercially and technically viable, as evident from the impressive project pipeline. Although there are challenges like high capital and operations and maintenance costs, and lack of technical expertise, they are quite insignificant when compared to the various benefits that floating solar technology offers.

The floating solar market is emerging gradually and has already become quite competitive with the entry of large IPPs, investors and manufacturers. Moreover, the setting up of domestic manufacturing bases by float manufacturers, along with upcoming float technology advancements in Southeast Asian countries, is likely to drive down project costs in the near future. While some may argue that the lack of policy support in terms of targets may be a deterrent to its uptake, it is quite clear that favourable market dynamics are enough to drive the growth of the floating solar segment.

By Khushboo Goyal

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