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Concentrated solar power (CSP) in India – Major Policy Push Required for Revival

Author - Gaurav Sharma   Date-February 13, 2015

India forayed into the concentrated solar power (CSP) space with a target of 470MW capacity in the first phase of the Jawaharlal Nehru solar mission (JNNSM). Seven projects were awarded in 2010 with a target deadline of March 2014. However, by the end of first phase, country only managed commissioning of 50MW, much below the target.

As of December 2014, installed CSP capacity in the country increased to 200MW with the further commissioning of 100MW (+25 MW of reserve capacity) plant in Rajasthan by Reliance and 50MW plant in Andhra Pradesh by Megha Engineering and Infrastructure Limited commissioned in November 2014.

Table below provide status of all CSP plants in India awarded in the first phase of JNNSM:

 S.No

Project Name

Location

Promoter

Capacity (MW)

Status

Generation Offtakers

Tarrif (Rs/Kwh)

Technology

1

Godawari Solar Project

Nokh
(Rajhastan)

Godawari Green Energy Limited (100%)

50

Operational

 NTPC Vidyut Vyapar Nigam Limited

 12.2

Parabolic trough

2

Dhursar Solar Project

Dhursar
(Rajasthan)

Reliance Power (100%)

100 (+25 reserve capacity)

 operational

NTPC Vidyut Vyapar Nigam

11.97

Linear Fresnel reflector

3

Megha Solar Plant

Anantapur
(Andhra Pradesh

Megha Engineering and Infrastructure (100%)

50

Operational

 NTPC Vidyut Vyapar Nigam Limited

11.31

Parabolic trough

4

Abhijeet Solar Project

Phalodi
(Rajasthan)

orporate Ispat Alloys Ltd. (100%)

50

Under construction

NTPC Vidyut Vyapar Nigam Limited

12.24

Parabolic trough

5

KVK Energy Solar Project

Askandra
(Rajasthan)

KVK Energy Ventures Ltd (100%

100

Under construction

 NTPC Vidyut Vyapar Nigam Limited

11.2

Parabolic trough

6

Diwakar Solar Project

Askandra
(Rajasthan)

Lanco Infratech (100%)

100

Under construction

NTPC Vidyut Vyapar Nigam Limited

10.5

Parabolic trough

7

Diwakar Solar Project

Askandra
(Rajasthan)

Lanco Infratech (100%)

100

Under construction

NTPC Vidyut Vyapar Nigam Limited

10.5

Parabolic trough

Source: EINFOANALYTICS Research Desk

 

 

Key Challenges Faced by the CSP Projects

Lack of accurate data on Direct Normal Irradiance (DNI)

The first round of bidding was done based on solar radiation maps with no ground measurement. Post the bidding the bidders realized that the actual radiation were 15-25% lower than actual resources measured. The reduction of 15-25% in initial DNI estimates can translate into an estimated 15–30% increase in levelised cost of energy (LCOE) for the plants thus putting the financial viability of the projects at a serious risk. CSP producers like Reliance, Lanco are now seeking higher tariffs claiming that the solar radiation data shared by ministry of new and renewable energy (MNRE) is incorrect and solar thermal projects may not be able to generate power as per the projection.

Lack of accurate data on DNI has impacted the bidder's confidence on bidding on investing in the sector. For example, in 2011, Rajasthan government issued a bid for 100MW PV and 100MW of CSP capacity development under the Rajasthan Solar Policy 2011. Twenty five bids were received for PV, but no bids were received for CSP

Local Manufacturing

As per the policy, the Ministry of New and Renewable Energy applied domestic content requirement (DCR) for the 1st phase of projects – 30% of local content in all plants and installation excluding land. Though, the players were able to achieve this 30% target but most key components were imported. As per Godavari solar project, the cost of the plant increased by over 20% fro