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Commercial Viability Analysis for Solar thermal Power
Generation Systems under New Market and Regulatory
developments in India
Final Semester Major Project Report Presented by –
Anudeep YadavRoll No 10
Content• Solar Energy - A Promising Energy Source for India.• Solar Thermal Power Generation-Global Achievements So Far.• Solar Thermal Power Generation-India’s Experience.• Jawaharlal Nehru National Solar Mission-Renewed focus.• Concentrated Solar Power –Commercial Tech.• Concentrated Solar Power -Indian Market & Regulatory
Proposals.• Concentrated Solar Power-Key Indian Project Proposals• Technical Issues• Economic Issues• Recommendations
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
Solar Energy - A Promising Energy Source for India
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
•Annual global radiation varies from 1600 to 2200 kWh/m2•The direct normal insolation(DNI) over Rajasthan varies from 1800 kWh/m2 to 2600 kWh/m2.•5 trillion kWh/year theoretical potential •Sunny areas
– Most of the country receives more than 4kWh/m2 /day– Average of 300 sunny days in the most part of the country
• Theoretically If one percent of the land is used to harness
solar energy for electricity generation at an overall efficiency of 10%;
492 x 106 MU/year electricity can be generated .
* TERI Calculations
Solar Thermal Power Generation-Global Achievements So Far
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
*Courtesy DLR- IEA 2009 Report
Total Installed Capacity ~ 600 MW Troughs- Most mature Tech.Towers Next in lineDish - Yet to be Demonstrated.
USA and Spain are the key Markets to look forward to.
*
Solar Thermal Power Generation-India’s ExperienceIndigenous Attempt
• By MNES ,parabolic trough collector technology (line focusing) at Gwalpahari, Gurgaon. • 50kW capacity • Commissioned in 1989 and operated till 1990 ;Shut down due to lack of spares
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
Integrated Solar Combined Cycle Power Plant ,140MW (Mathania) Raj. 35MW Solar
•Began the GEF work program in 1996. *• GEF contribution of US$49 million; a total financing volume of US$245 million (GoI and KfW, and executed by KfW)•Prequalification in 2001; 1 international, BHEL and L &T ( both with SOLEL).•Only BHEL , L&T remained finally. Techno economic difficulty, none submitted.
STATUS (as reported by Magazine “Project Monitor” on 3r d April 2006)• International Funds are transferred to some other project.• Project needs revised techno-economic feasibility study.• RRECL has not been able to sign Gas Supply Agreement with GAIL.
*www.Solarpaces.org
Shelved and now
Reopened Again
Jawaharlal Nehru National Solar Mission-Renewed focus on solar
• 3-phase approach– Up to 2012-13 as Phase 1. installed Cap - 1100 MW– From 2013-17 as Phase 2. installed Cap - 4000 MW– From 2017-22 as Phase 3. installed Cap -20000 MW
• Demonstration projects in Phase I– 50-100 MW Solar thermal plant with 4-6 hours’ storage (plant load factor up to 40%).– A 100-MW capacity parabolic trough technology based solar thermal plant.– A 100-150 MW Solar hybrid plant with coal, gas or bio-mass to address variability and
space-constraints.
• Promotion proposals.– Local demand creation, right incentives & large government pilot/demonstration
programs.– Financing & Incentives , import duty, low rate loans, priority sector lending etc
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
Concentrated Solar Power Commercial Tech• CSP Trough
– Most mature commercial technology– Latest Functional Plant– Andasol (Spain)
• 3 x 49.9 Mwe• Solar to Electrical Eff 16 %• 7.5 full load hours Storage. Annual CUF – 40 %• Investment ~ 750 million Euro ; 80 % debt financed• Approx 32 crores/MW; Tariff ~Rs 17.5/unit• 512000 m2 / 200 Ha of collectors /plant.• 50 member permanent Staff.
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
*Solar Millennium LLC & Flagsol
*
Concentrated Solar Power Commercial Tech- Contd
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
• Solar Tower –second most mature commercial Tech.• Latest Functional Plants – PS 10, PS20 ( Spain)
• 11 MW Sat Steam Rx, 1 hour Storage, backup NG ( 15%)
• Solar resource- 2102 KWh/m2/yr ; Land 55 Ha• Tariff – 27.12Euro cent/KWh , 25 yrs PPA.• Solar to Elect Efficiency – 21.4%.• Plant Cost – 33 Million Euro , Rs~ 19.5Crore /MW.
• State of Gujarat• Not available for MNRE facilitated projects.• Valid for 500MW of Capacity , min cap of 5 MW.• Valid upto March 2014.• No Fossil fuel allowed.• No Electricity duty.• Tariff of 9 Rs /unit for 12yrs.• Specifies penalty for Discom to fail meet RPO @ Rs
12/unit.
Concentrated Solar Power -Indian Market & Regulatory Proposals
• Incentives are mutually exclusive between State policies and MNRE.
• MNRE , GBI Scheme– Limited to total of 50 MW, 10 MW/state and 5 MW/ developer. Policy
limited to 1 year with revision on annual basis. – Not avail with Acc Depreciation.– No backup fuel allowed.– Max Period of 10 yr.– Connected to PPA with Utility with cap of Rs 9.5/unit.
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
• State of Rajasthan• Ten year Promotional Tariff ( incl. GBI) to be Rs 13.18/unit.• Plans to establish a Solar Energy Enterprises Zone
(SEEZ) in the districts of Barmer, Jaisalmer and Jodhpur by offering a package of incentives to private investors.
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Concentrated Solar Power -Indian Market & Regulatory Proposals-contd.
• CERC Solar Thermal T &C for Tariff.– Benchmark Capital Cost Norm Rs 1530 Lakhs/MW – Tariff Period- 25 yrs.– Land Costs- 0.18 crores/MW ( @ 6 Acre/MW,3L/Acre).– Loan Tenure- 10 years.– Normative CUF- 23 %– Depreciation- 7 % ( 1st 10 yrs)– RoE – 19% and 24 % – O & M Expenses 13Lakh/MW– Aux Cons – 10 %
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
Concentrated Solar Power-Indian Project Proposals
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
• 10 MW SOLAR THERMAL Tower Power Project Acme Telepower, (Bikaner )Rajasthan.
• Uses Esolar’s new technology.– Not yet proved. – Pilot Plant of 2.5 x2 ( 5 MW) Operational since last
year.– No Performance Data yet available.
Concentrated Solar Power-Indian Project Proposals- Contd
• Solar Thermal Power Plant at Bap, Jodhpur, Rajasthan based on Parabolic dish-sterling technology.
• Modular 3kW 3340 systems Total Cap . 10 MW• Land Requirement - 70 Acres.• EPC Contractor - INFINIA Corp, USA
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Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
Technical Issues• Major Cost Forecasts Base
– Sargent & Lundy Cost & Performance Forecast.Allocated cost reduction due to • Volume production (learning and improvements in manufacturing)• Plant scale-up (increasing size), and • Technology advances (RD&D)• Assumes cost in range of Rs 6/unit to Rs 4.5/unit.• Tower Plants overtake the cheapest source from trough plants
before 2010.
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
• Problems • Assumed increased deployment hasn’t been found to happen.• Costs in regions of SW USA or Upper EGYPT inc by at least 30 % when
in regions like India.*• Technology cost forecasts for tower are proved mistaken.• Major Costs of Tower Plants • Tech – 23%• Scale up & Volume Prod.
*Greenpeace Solar Outlook
Technical Issues-Contd.• Insolation Level Measurement of specific sites.• Use of New Unproved Technologies in tower
systems.• Unviable small scale plants. ( 5 – 10 MW)*• Extent of indigenization is not high.
– Structures (precision assembly)– Power Block (specialized turbine)– Receiver/ Receiver tubes(very specialized )– Mirror surfaces/heliostats- doubtful(specialized low
thickness upto 2 mm,hi reflectivity 92%,light weight)Anudeep Yadav ;Roll no 10; MBA-Power
Management,NPTI
• Unreliable Dish Stirling Systems• No utility scale plant online yet.• Highest Land requirements (10 – 20 acre/Mw) ,
even more than PV .• Infinia corp. haven't yet delivered high
efficiencies.• Major issues with maintenance, mean time
between failure is reported to be around 40 hrs in a testimony of expert before US Energy Commision.
*Expert Opinion,Sandia
Labs
Economic Issues• Capital Costs
– Technology of proposed projects. 1 – Capital costs – Min .15.9 Crores (w / capital subsidy)*– O & M Costs – Conn. to Capacity^; Staff Training
• Capacity Utilization – Actual values depend on
• Insolation• Extent of Storage• Backup Fuel Allowances
– Best Case Values are around 15 to 21 %
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
*Data on Executed Tower Project in Spain ,Aus Govt
Report on HTSP Roadmap
^ based on Experiences in US SEGS plants.
8%-to- 2 % Points Loss
• Effect of Land level in design of PS 10 ,Spain
Economic Issues-Contd• Hidden costs
– Land development.• Slope of land is key issue. ( 1%)• Continuous areas of sufficient solar field as per
requirement should be available.
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
USA CSP Resource Potential before applying filters of
•Land slope •Continuous Land availability.•DNI value
USA CSP Resource Potential After applying filters of
•Land slope <= 1%•Continuous Land availability.- 10 Kms•DNI value - 6.75 Kwh/m2/day
Economic Issues-Contd• Incentives mismatch
– USA– Renewable portfolio standards of 20 to 30 %– Federal Cash Grant of 30 % of expenditures, eligible to commercial
systems.– Commercial/Residential Tax Credit- not avail. With grant, income
tax liability net of local grants.– Federal Corp. Depreciation :- Accelerated upto the level of 50 % in
first year ,also called as Modified Accelerated Cost-Recovery System (MACRS), classifies several renewable projects as 5 year property.
– Federal Loan guarantee Program:- Allows guarantees for long term repayments upto 90 % useful life or
30 years.
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
• Incentives mismatch– Spain
– Solar thermal focused special regulations.attracted 800 Mwe Plants.
– Special mechanism of high feed in tariffs provided along with capital subsidies from state govt.s and EU
– Option 1 – fix tariff of 0.28 Euro/unit.– Option 2 – combination of market price ~ 0.16euro +premium
upto 0.26 euro /unit subject to min (0.26 euro) and max (0.35 euro), 25 yrs., then 80 %
– Allowance of Fossil Fuel backup upto 15 %.
• Incentives mismatch– India
Recommendations• The Actual Assumptions based on Study analysis gives
the tariff in ranges of Rs 27 – 22/unit.
– Capital costs ranging 16 to 19 crores/MW.– O &M Costs indexed to Capital costs. ( ~ 2 %).– Lower CUFs ( 18 to 21 %).– Motive to produce reliable and dispatch able capacities.
Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI
• Key Parameters having effect on tariffs are• CUF.• Loan Interest Rates.• Loan Tenure.• Capital subsidy.
• Allow Fossil fuel back up with fixed percentages(10-15%).• Provide for state support and incentives for larger scale
plants for establishing utility scale plants. • Small Scale demonstrator plants should be setup with
state as minority stakeholder to establish Life Cycle Costs to set up accurate T & C of Tariff.
• Develop a holistic approach for development of reliable power source, providing scope for storage .
• Prepare detailed DNI database for prospective Solar thermal Sites.
Queries are welcome !Anudeep Yadav ;Roll no 10; MBA-Power
Management,NPTI
• Ministry of New and Renewable Energy sources, http://mnes.nic.in/pdf/mission-document-JNNSM.pdf
• Central electricity regulatory commission, www.cercind.gov.in
• Various status reports of previous developments in solar thermal power generation across the world; www.osti.gov/energycitations
• Communications with Dr. Tom Mancini, CSP program Director , Sandia Labs USA
• SOLARPACES website, for detailed study reports, http://www.solarpaces.org/CSP_Technology/docs
• Concentrating Solar Power Reports, http://ec.europa.eu/energy/res/publications/doc/
• Esolar’s website; http://www.esolar.com/sierra_fact_sheet.pdf
• Estella Solar; http://www.estelasolar.eu/fileadmin/ESTELAdocs/documents
• Rajasthan Electricity regulatory commission; http://www.rerc.gov.in/Order/Tariff_for_Solar_Power_Order2APR08.pdf
• Presentations by Rainer Aringhoff, President Solar Millenium LLC, Berkley; 10 /1/2008 Final Report on “ Technical data, costs, and life cycle inventories of solar thermal power plants" by Peter Viebahn, Stefan Kronshage, Franz Trieb (DLR), Yolanda Lechon (CIEMAT) funded EU , release 2008.
• National Renewable Energy Labs online library for accessing
various reports including Sargent and Lundy's analysis; http://www.nrel.gov/csp/troughnet/pdfs/2007 to 2009.
• • Green peace report on solar thermal
http://www.greenpeace.org/raw/content/international/press/reports/concentrating-solar-power-2009.pdf
• IEA website reports on CSP; http://www.iea.org/papers/2009/CSP_Brochure.pdf
• World bank’s Global Environmental Facility Report on status of solar thermal plants, 2005.
• HIGH TEMPERATURE SOLAR THERMAL TECHNOLOGY ROADMAP for Australia, by Wyld Group Pty Ltd for Australian states of Victoria and New South wales; 2008 .
• European Commission (2007), Concentrating Solar Power: Main Projects document; Supported By The Commission, Brussels.
References
Major Modified Assumptions according to Real project experiences .(Tower)
• Capital Costs- 15.9 Cr/MW and more.• O &M Costs- 2% - 2.5% of Cap Costs.• C U F 19 %
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Anudeep Yadav ;Roll no 10; MBA-Power Management,NPTI