It hasn’t been an easy ride for India’s solar parks this far, but fresh policy support and interest from international funders could shake up the scene for the better
When India’s mega solar projects were discussed at the One Planet Summit held last week in France, it was clear that the country’s ambitious aim to create a slew of solar parks was garnering support not only from domestic policymakers but from global agencies as well.
In November, India and the World Bank signed a USD 98 million loan pact and a USD 2 million grant agreement to help the South Asian nation to increase power generation capacity through renewable energy sources. “The shared infrastructure for the solar parks project will finance Indian Renewable Energy Development Agency Ltd (IREDA), to provide sub-loans to states to invest in various solar parks,” the World Bank said in a statement. “The solar parks will be mostly under the Ministry of New and Renewable Energy’s (MNRE) Solar Park Scheme.”
“The first two solar parks are in the Rewa and Mandsaur districts of Madhya Pradesh, with targeted installed capacities of 750 MW and 250 MW, respectively. Other states where potential solar parks could be supported under this project are Odisha, Chhattisgarh and Haryana,” it added.
In March this year, the Indian government doubled the planned generation from solar parks to 40 GW from 20. It has sanctioned 35 parks in 21 states. Solar projects have started in some parks.
“For instance, in the Kurnool solar park in Andhra Pradesh, a project worth 1,000 MW has been initiated. Totally, 2,500 MW worth solar projects have come up,” an MRNE official told indiaclimatedialogue.net. “In some cases, it is 100 MW, some 200 MW and in some others, 300 MW.”
In solar parks that are developed, the infrastructure is created, and in the last stage, projects are built in these parks. There are seven solar parks that have reached that stage and projects have begun, the ministry official said. Another 7-8 projects are also in an advanced stage of completion, and it may take another six months to a year before they become operational, he added.
Explaining the current status of the parks, Raj Prabhu, CEO and co-founder of market intelligence firm Mercom Capital Group, told indiaclimatedialogue.net, “Solar parks are a work in progress. Most parks are still in a development phase, but projects that are already being constructed in these parks are being delayed because of incomplete infrastructure.” However, he added that solar park development is presently taking place at a brisk pace. Solar parks are complete in Andhra Pradesh, Rajasthan, Gujarat and Karnataka, Prabhu said.
Another expert in the clean energy sector believes that solar parks enables developers easy access to land, clearances and evacuation infrastructure. “Also, there is government support in such initiatives (the Rewa solar park being a case in point), coupled with off-setting risk of curtailment by a 100% payment guarantee,” the expert told indiaclimatedialogue.net.
Despite the positives, some daunting issues remain. Industry sources say land acquisition is a major problem. “Large tracts of farmland will be used up for the modules, and this is likely to impact the farm economy in that region, thereby affecting the livelihood of those dependent on it,” an expert said, speaking on condition of anonymity. “Though sovereign support for land acquisition is implied, local population consensus would be vital for trouble free project implementation and to achieve desired end-results.”
For mega solar projects of more than 500 MW, contiguous land parcels of over 2,000 acres is required, which seems a tall task. Most of the good locations in terms of solar irradiation and non-farm potential is already acquired or developed by existing renewable developers and second rung lands in terms of efficiency will have to be carefully evaluated with long-term cost-benefit analyses. To achieve the optics, there could be haste in implementing the scheme, but what remains to be answered is whether that makes sense for private developers or financiers.
The MNRE official said ideally, 3,500 hectares are required for a solar park, and that can be a major constraining factor.
A further challenge is for banks and other financial institutions to fund projects with the current low solar tariff. Then there are the on-going issues of China-made solar panel equipment prices going up, impending anti-dumping actions and domestic content requirement. All these create uncertainty on plant design and economics as well, the source in the clean energy industry warned.
Prabhu says that in the near future, most solar projects will be built in parks. Thus, there is a need for better coordination between central government agencies and the solar parks. “Projects are being auctioned by the National Thermal Power Corporation and the Solar Energy Corporation of India without making sure the infrastructure is ready in these parks,” he told indiaclimatedialogue.net. “Over a GW of projects that are complete are stuck and cannot be commissioned due to the grid infrastructure not being ready. Also, most developers feel that the fees are too high.”
“So far, it has been tough, but we are hoping that things will get better as we go into 2018,” adds Prabhu.
MNRE says the fears are overblown. “Earlier, only north-eastern states and the Himalayan states would get the nod for small solar parks and we would allow just 500 MW. But now, owing to the demand from the sector, we have begun to permit small solar parks as well in states across India,” the MNRE official said. “If they have a problem with the land, we allow 100 MW to 200 MW worth solar parks as well.”
Recently, the MNRE issued an order making it mandatory for states to buy at least 20% of the power generated through solar parks. “The industry wants these parks to be complete without any issues, considering they are paying steep park fees to build projects,” says Prabhu.
Need of the hour
Rajni Umakanthan, managing director of 3TIER India, a subsidiary of global environmental and industrial measurement leader Vaisala, believes solar parks would enable scaling up of solar energy generation in the country as it offers a plug and play facility to developers to build their projects. “The success of solar parks and ultra-mega solar power projects would be critical to meeting the target of 100 GW of solar installation in the country by 2022,” Umakanthan told indiaclimatedialogue.net. “Given the steep targets for solar parks being set at 40% of the total solar installation, the pace of development and commissioning of solar parks and ultra-mega solar power projects should be accelerated significantly in the next 2-3 years.”
However, he stresses on the need to have sufficient ground measurement for solar resource at solar parks prior to the start of construction. Currently, large solar parks and ultra-mega power projects are built purely based on resource assessment without any ground measurement. It has been has observed that the uncertainty related to solar resource availability (Global Horizontal Irradiance) can be reduced by 40% with just four months of ground measurement.
The uncertainty can be reduced by 60% with a measurement over a year. As solar parks and ultra-mega power projects take a few months to be developed, it is possible to have measurement systems installed at the site and solar resource data to be collected during that period. “This will go a long way in helping project developers to reduce the resource uncertainty of their projects by a huge margin and secure financing easily,” Umakanthan said.