Shubhranshu Patnaik, Senior Director, Deloitte Touche Tohmatsu India Private Ltd.
The Jawaharlal Nehru National Solar Mission (JNNSM) was launched last year with the objective of achieving 20 GW MW of grid-connected (and 2 GW MW of off-grid) solar capacity in India by 2022 and to provide an environment for innovation, efficiency improvement and scale in the country to accelerate solar energy’s march towards grid-parity by 2022.
Over Phase I of JNNSM, 1 GW of solar power is targeted by 2013. As a significant first step towards achieving this, the Government of India, through a tariff-based reverse auction process, successfully selected 37 developers offering 620 MW (450 MW of solar thermal and 150 MW of solar PV projects) to sign Power Purchase Agreements with NNNV. Further, about 100 MW of projects, were allowed to migrate under the JNNSM at feed-in tariffs specified by the CERC (Rs 17.91/kWh for PV and Rs 15.31/kWh for solar thermal).
The auction settled the debate on the viability of CERC’s feed-in tariffs as qualified bidders bid substantive discounts over CERC tariffs up to Rs.5.75/kWh for solar PV and Rs.4.82/kWh for solar thermal. Despite unavoidable criticisms of the reverse auction process, caps on capacities, etc., investor participation was overwhelming and the government and NVVN deserve credit in having conducted the process in a time-bound manner and conveying the seriousness of the program to the global community. Phase I is at best a proof of concepts, the test of which is not just the successful award or even commissioning of projects but in its scalability, given the 20 GW target set out under the mission by 2022. It is time therefore to ascertain the progress under Phase I and prepare for Phase II of the mission.
Of particular interest is the realisation of the solar thermal potential in India, which is central to achievement of the ambitious targets under JNNSM. Solar thermal technologies are emerging in nature and there are only a few operating plants around the world, although several are in the planning / development stage.
Solar thermal plant designs ideally require accurate local irradiation data and extensive engineering inputs in calibration and design of solar fields. Relying simply on the satellite-derived data can lead to faulty conclusions, as some players are finding out with ground-measuring instruments. The above uncertainties combined with the lack of solar development experience amongst bidders and the fact that very few solar thermal bidders actually aligned with solar technology providers at the bidding stage, has increased the risk-perception amongst lenders and made it extremely hard for these projects to get non-recourse financing. Over three-fourths of all projects under JNNSM face challenges in achieving financial closure. This remains an important area to be addressed by the government and multilateral financial institutions (MFIs).
Over Phase I of JNNSM, 1 GW of solar power is targeted by 2013. As a significant first step towards achieving this, the Government of India, through a tariff-based reverse auction process, successfully selected 37 developers offering 620 MW (450 MW of solar thermal and 150 MW of solar PV projects) to sign Power Purchase Agreements with NNNV. Further, about 100 MW of projects, were allowed to migrate under the JNNSM at feed-in tariffs specified by the CERC (Rs 17.91/kWh for PV and Rs 15.31/kWh for solar thermal).
The auction settled the debate on the viability of CERC’s feed-in tariffs as qualified bidders bid substantive discounts over CERC tariffs up to Rs.5.75/kWh for solar PV and Rs.4.82/kWh for solar thermal. Despite unavoidable criticisms of the reverse auction process, caps on capacities, etc., investor participation was overwhelming and the government and NVVN deserve credit in having conducted the process in a time-bound manner and conveying the seriousness of the program to the global community. Phase I is at best a proof of concepts, the test of which is not just the successful award or even commissioning of projects but in its scalability, given the 20 GW target set out under the mission by 2022. It is time therefore to ascertain the progress under Phase I and prepare for Phase II of the mission.
Of particular interest is the realisation of the solar thermal potential in India, which is central to achievement of the ambitious targets under JNNSM. Solar thermal technologies are emerging in nature and there are only a few operating plants around the world, although several are in the planning / development stage.
Solar thermal plant designs ideally require accurate local irradiation data and extensive engineering inputs in calibration and design of solar fields. Relying simply on the satellite-derived data can lead to faulty conclusions, as some players are finding out with ground-measuring instruments. The above uncertainties combined with the lack of solar development experience amongst bidders and the fact that very few solar thermal bidders actually aligned with solar technology providers at the bidding stage, has increased the risk-perception amongst lenders and made it extremely hard for these projects to get non-recourse financing. Over three-fourths of all projects under JNNSM face challenges in achieving financial closure. This remains an important area to be addressed by the government and multilateral financial institutions (MFIs).
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
