A move to set up 33 solar parks will help India achieve its target of 20 GW installed capacity from these big projects, which is one-fifth of the country’s ambitious target of 100 GW of solar power capacity by 2022

The Canal Top Solar Power Plant in Gujarat, India. (Photo by Mark Garten)

Ever since India’s National Solar Mission was launched in 2010, the sector has been going from strength to strength. “India is expected to install over 4 GW of solar in 2016, which will bring it to the fourth spot globally. Currently, it has a pipeline of over 21 GW under development and in pending auctions,” according to Mercom Capital Group Llc, a clean energy communications and consulting firm.

With the numbers playing out encouragingly, the role of solar parks will only bolster the sector. What are these parks all about? JNNSM, Guidelines for Development of Solar Parks, which was released by the Ministry of New and Renewable Energy (MNRE) in February this year, states, “The solar park is a concentrated zone of development of solar power generation projects and provides developers an area that is well characterised with proper infrastructure and access to amenities and where the risk of the projects can be minimised. Solar Park will also facilitate developers by reducing the number of required approvals.”

It adds that large projects have the potential to bring down the cost of solar power. “Therefore, ultra mega solar power projects having a capacity of 500 MW or above have been planned in India. Large chunks of land are available in some states for solar park development. Smaller parks in Himalayan and other hilly states where contiguous land may be difficult to acquire in view of the difficult terrain are also being considered. Smaller parks are also being considered in states where there is acute shortage of non-agricultural lands.”

“The solar park will enable states to bring in significant investment from project developers in the solar sector, to meet its Solar Purchase Obligation mandates and provide job opportunities to the locals. The state will also be able to reduce its carbon footprint by avoiding emissions equivalent to the solar park’s generated capacity,” according to state-owned Solar Energy Corporation of India (SECI). SECI, which is administered by the MNRE, will handle funds to be made available under the scheme on behalf of the federal government. The states will designate a nodal agency for implementation of solar parks.

India is betting heavily on solar parks. (Photo by Andreas Demmelbauer)

The state governments will nominate the Solar Power Parks Developer (SPPD). “The SPPD is tasked with acquiring the land for the park, cleaning it, levelling it wherever considered desirable and allocating plots for individual projects. It will be responsible for creating an internal transmission network on behalf of the solar project developers,” according to the government’s guidelines. “This network will connect with the Intra State Transmission System or State Transmission System. The transmission network within the solar park will be a captive/dedicated transmission system of the park’s solar project developers.”

Initially, the government’s Development of Solar Parks and Ultra Mega Solar Power Projects initiative had earmarked 25 solar parks and said they would add up to 20 GW capacity. Later, 27 solar parks were approved, bringing the aggregate capacity to 18.4 GW across 21 states and union territories. Currently, 33 solar parks with a capacity of around 20 GW have been sanctioned in 21 states, says Dilip Nigam, Director, National Solar Mission, MNRE.

Why solar parks?

According to Nigam, the aim of solar parks is to create an infrastructure in terms of land development, road construction, water availability, all internal, external sub-station and transmission facilities. There are different models through which the government is undertaking the solar parks project.

“Creating infrastructure, logistics, building a road is also part and parcel of a solar park. When it comes to transmission, the one who owns the land ensures that electricity is provided for. Since the government is providing part of the financial support and infrastructure is created in bulk, the per unit cost comes down, and this is ultimately reflected in tariff of the electricity produced,” he adds.

Shivkumar Kalyanaraman, of IBM Research says, “Viability should not be a major issue.” The transmission capacity and evacuation is the primary expense (including the time taken to get the transmission capacity to the park) associated with solar parks. This is a function of siting the park as close as possible to existing or planned transmission facilities. “The reverse auction of solar plants set up will ensure a competitive price at the time of auctions. The key is to ensure that the state DISCOMs (distribution companies) purchase the solar PV (photovoltaic) output from the government. This would presumably be part of the state’s commitment to the government of India,” Kalyanaraman says. RE consultant Madhavan Nampoothiri however feels that viability depends on the area of the solar park.

Energy Minister Piyush Goyal said in parliament that a capacity of 20 GW has been targeted under existing solar park scheme, which includes use of wastelands. However, in Karnataka, a solar park of 2 GW is being set up on farmland. It has been taken at an annual rent of Rs 21,000 per acre on a 25-year lease. Nampoothiri feels that in general, “it is quite difficult to get contiguous parcels of land (unless the same is wasteland owned by the government). Acquisition of private land can be a huge problem.”

Great expectations

Pranav Mehta, Chairman of the National Solar Energy Federation of India and Co-Chairman, Global Solar Council, agrees that the solar park movement has gained momentum. “While it’s heartening to note that 33 solar parks are coming up, we must ensure that solar parks are affordable, especially in view of the fact that solar tariffs are coming down in a big way,” he said.

According to Kalyanaraman, economies of scale in site selection, land acquisition, installation, engineering, procurement and construction, and power evacuation will lead to lower prices for the solar plants in these parks. With more solar photovoltaic projects deployed globally, and especially in India, cost reductions and supply chain efficiencies will grow. “This will have a spillover effect in other sectors of solar deployment including rooftop solar and off-grid solar,” he said. “These are positives for the industry.”

“It is a good move to give importance to different types of installations — gigawatt projects in solar parks, megawatt ground-mounted projects, and kilowatt scale rooftop projects,” adds Nampoothiri.

Separate grid

Yet another encouraging measure for the concept has been the move to develop a separate project for evacuation of power from solar parks. The state-owned Power Grid Corporation of India aims at evacuating power from 20 solar parks planned by 12 states. Accordingly, inter-state lines will be laid by the corporation and the intra-state ones will be installed by state transmission utilities or by calling tenders. Out of 22.1 GW capacity of ultra mega solar power parks envisaged in 12 states, about 17.6 GW would be evacuated inter-state and the rest by state transmission utilities.

Kalyanaraman feels this makes sense since Power Grid Corporation is the primary transmission company in India. With careful site selection, the extensions from existing transmission facilities should be economical both in cost and time. With larger plants, the variance of generated power on the transmission line should reduce. If hybridised by wind or other nearby thermal power facility for balancing, the sizing of the transmission facility could be better optimised, he suggests.

Concurring, Nampoothiri says, “Solar parks are huge projects; it is important to have a dedicated evacuation infrastructure and not rely on the existing common grid lines.”

Foreign funding

Solar parks have begun to attract foreign investment. The Japanese International Cooperation Agency (JICA) finalised plans to fund solar power parks in various states and is likely to invest $500 million. The European Investment Bank has also expressed interest. Earlier, Asian Development Bank assisted the Gujarat government in financing the transmission line for evacuating power generated from Charanka Solar Park.

Nampoothiri hopes these funds are quickly deployed. Kalyanaraman is not too worried about this. He says the cost of the solar park is relatively small, compared to the cost of the solar PV systems deployed in these parks, and these systems will presumably be auctioned to private firms. Anyway, he says, “Since the under-writer of the parks is the Indian government, the investment is a relatively safe one for international capital.”

Meanwhile, the government recently announced Phase II of the solar parks. According to Nigam, in this phase “plans are on to add 20 GW, akin to Phase I.”