solar energy: the alternative - parliament...
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LOK SABHA SECRETARIAT
PARLIAMENT LIBRARY AND REFERENCE, RESEARCH, DOCUMENTATION
AND INFORMATION SERVICE (LARRDIS)
MEMBERS’ REFERENCE SERVICE
REFERENCE NOTE . No. 8/RN/Ref./February/2016
For the use of Members of Parliament Not for Publication
SOLAR ENERGY: THE ALTERNATIVE
------------------------------------------------------------------------------------------------------------------------------- The reference material is for personal use of the Members in the discharge of their Parliamentary duties, and is not for publication. This Service is not to be quoted as the source of the information as it is based on the sources indicated at the end/in the text. This Service does not accept any responsibility for the accuracy or veracity of the information or views contained in the note/collection.
SOLAR ENERGY : THE ALTERNATIVE
In the Indian tradition, Sun is the source of all forms of energy. As Rig Veda says, Sun
God is the Soul of all beings, moving and non-moving. Today, when the energy sources
and excesses of our industrial age have put our planet in peril, the world must turn to Sun
to power our future1.
INTRODUCTION
Renewable energy is gaining traction as an important area of focus for Governments
worldwide. It is increasingly essential to a country’s energy portfolio, not only to combat Climate
Change but also to diversify sources and protect against external shocks. As governments must
do more with fewer resources, renewable energy is also increasingly part of an economic
sustainability calculation. A clean energy future demands greater investment in renewables,
which in addition to environmental benefits could provide attractive dividends such as job
creation, economic growth, energy security, and greater insulation from oil price volatility2. Thus
there is an urgent need for the entire humanity to tap other resources which will at the same
time be ecologically friendly. Some of such resources (non-conventional) are the Sun, the wind,
the sea waves and geothermal sources. Among the non-conventional resources, the energy
from the sun is a primary one, unbounded by territorial or monopoly limitations. The Solar
energy received by the earth is more than 15,000 times the world’s commercial energy
consumption and over 100 times the world’s known coal, gas and oil reserves3.
INDIAN SOLAR ENERGY SCENARIO
India is endowed with a very vast Solar energy potential. Most parts of the country have
about 300 sunny days. Average Solar radiation incident over the land is in the range of 4-7kWh
per day4. The range of Solar energy is very large. While at the high end there are megawatt
level Solar thermal power plants, at the lower end there are domestic appliances such as Solar
cooker, Solar water heater, and Photovoltaic lanterns. Then, in between, there are applications
such as industrial process heat, desalination, refrigeration and air-conditioning, drying, large
scale cooking, water pumping, domestic power systems, and passive Solar architecture. Solar
1 www.pmindia.gov.in
2 Murthy, V.A.V., India's Solar Energy Future- Policy and Institutions, CSIS, February 2014, p. 1
3 http://mnre.gov.in/
4 India, Lok Sabha, 6th Standing Committee Report, Demands for Grants, Ministry of New and Renewable Energy, 2015, p. 26
-2- cookers and hot water systems based are gaining popularity in India and to a large extent
attained commercial status. Solar energy can be harnessed to supply thermal as well as
electrical energy. Those technologies that use Solar energy resource to generate energy are
known as Solar energy technologies.
Solar energy technologies consists of:
Solar Thermal technologies, which utilize Sun's thermal energy and
Solar Photovoltaic technology, which convert Solar energy directly in to electricity5. The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry at the Federal
level for all matters relating to new and renewable energy6. The National Institute of Solar
Energy, an autonomous institution of the Ministry of New and Renewable Energy, is the apex
National R&D institution in the field of Solar Energy. The institute is involved in demonstration,
standardization, interactive research, training and testing solar technologies and systems. It is
an effective interface between the Government and institutions, industry and user organizations
for development, promotion and widespread utilization of solar energy in the country7.
JAWAHARLAL NEHRU NATIONAL SOLAR MISSION (JNNSM)
The Jawaharlal Nehru National Solar Mission (JNNSM) was launched on 11 January
2010. The targets include, viz., (i) Deployment of 20,000 MW of grid connected Solar power by
2022, (ii) 2,000 MW of off-grid Solar applications including 20 million Solar lights by 2022, (iii) 20
million sq. m. Solar thermal collector area, (iv) To create favourable conditions for developing
Solar manufacturing capability in the country; and (v) Support R&D and capacity building
activities to achieve grid parity by 2022. The Mission was to be implemented in three phases8.
The 11th Plan and first year of the 12th Plan (upto 2012-13) were considered as Phase I, the
remaining 4 years of the 12th Plan (2013-17) are included as Phase 2, and the 13th Plan period
(2017-22) is envisaged as Phase 39. The physical achievement vis-à-vis targets of the Phase I
& II of the JNNSM are furnished in the following table10:
5 http://www.indiaenergyportal.org
6 India, Ministry of New and Renewable Energy, Annual Report, p.1
7 http://mnre.gov.in/
8 Op.cit., 6th Standing Committee Report, p. 27
9 http://mnre.gov.in/
10 Op.cit., 6th Standing Committee Report, p. 27
-3-
Phase I & II achievements of the JNNSM
Application Segment Target for Phase I (2010-13)
Achievement for Phase-I (Till 31st March 2013)
Cumulative Target for Phase II (2013-17)
Cumulative Achievement so far till Feb 2015
Grid Solar power (large plants, roof top & distribution grid plants)
1100 MW 1,684.43 MW (including those under state initiative)
10000 MW 3382.78 MW
Off-grid Solar applications allotment
200 MW 252.5 MW 1000 MW 357.18 MW
Solar Thermal Collectors (SWHs, Solar cooking, Solar cooling, Industrial process heat applications, etc.)
7 million sq. meters
7.001 million sq. meters
15 million sq. meters
8.729 million sq. meters
The actual financial expenditure vis-à-vis allocation of the Solar Mission is given in the
following table11:
Year-wise expenditure under JNNSM
Year RE Actual Expenditure
2011-12 710.00 707.35
2012-13 705.00 655.54
2013-14 887.00 792.37
2014-15 (upto 31/1/2015) 1322.93 1130.72
Upscaling of Targets
India's Solar power capacity target under the Jawaharlal Nehru National Solar Mission
(JNNSM) is upscaled by five times, reaching 1,00,000 MW by 2022. The target will principally
comprise of 40 GW Rooftop and 60 GW through Large and Medium Scale Grid Connected
Solar Power Projects. With this ambitious target, India will become one of the largest Green
Energy producers in the world, surpassing several developed countries12. State-wise tentative
targets are given at Annexure-I.
11
Ibid, p. 28 12
PIB, dated 17.6.2015
-4- It is planned to achieve the revised target of 100 GW by setting up Distributed Rooftop
Solar Projects and Medium and Large Scale Solar Projects, the break-up of which is as
under13:-
Category-wise Targets
Category I Proposed Capacity (MW)
Category II Proposed Capacity (MW)
Rooftop
Solar
40,000 Scheme for Decentralized Generation of Solar
Energy Projects by Unemployed Youths and Farmers
10000
PSUs 1 0,000
Large Private Sector/IPPs 5,000
SECI 5,000
Under State Policies 20,000
Ongoing programmes including past achievements 10,000
Total 40,000 60,000
Year-wise breakup of 1,00,000 MW Grid connected Solar power to be achieved by 2022
through installation of projects under various schemes is given below14:-
Year-wise Breakup of Targets
Year/ Category Rooftop Solar Large Scale Solar Projects
Total
2015-16 200 1,800 2,000
2016-17 4,800 7,200 12,000
2017-18 5,000 10,000 15,000
2018-19 6,000 10,000 16,000
2019-20 7,000 10,000 17,000
2020-21 8,000 9,500 17,500
2021-22 9,000 8,500 17,500
Total 40,000 57,000 97,000*
*3743 MW commissioned upto 2014-15
13
Lok Sabha Unstarred Question No. 1935 dated 10.12.2015 14
Rajya Sabha Unstarred Question No. 2465 dated 21.12.2015
-5- The installed capacity of Solar power in India crossed the milestone of 5,000 MW on 15
January 2016. The cumulative installed capacity has reached to 5,130 MW with installed
capacity of 1385 MW in current Financial Year . The State of Rajasthan stands 1st in the
country with 1264 MW, followed by Gujarat (1024MW), Madhya Pradesh (679 MW), Tamil Nadu
(419 MW), Maharashtra (379 MW) and Andhra Pradesh (357 MW). The State-wise break-up of
5,130 MW is given in the Table below15:
State-wise total Commissioning Status of Grid Connected Solar Power Projects as on 14.01.2016
15
PIB, dated 14.01.2016
Sr. No. State/UT Total commissioned capacity till 14-01-16 (MW)
1 Andhra Pradesh 357.34
2 Arunachal Pradesh 0.265
3 Chhattisgarh 73.18
4 Gujarat 1024.15
5 Haryana 12.8
6 Jharkhand 16
7 Karnataka 104.22
8 Kerala 12.025
9 Madhya Pradesh 678.58
10 Maharashtra 378.7
11 Odisha 66.92
12 Punjab 200.32
13 Rajasthan 1264.35
14 Tamil Nadu 418.945
15 Telangana 342.39
16 Tripura 5
17 Uttar Pradesh 140
18 Uttarakhand 5
19 West Bengal 7.21
20 Andaman & Nicobar 5.1
21 Delhi 6.712
22 Lakshadweep 0.75
23 Puducherry 0.025
24 Chandigarh 5.041
25 Daman & Diu 4
26 Others 0.79
TOTAL 5129.813
-6- The physical achievements during the year 2015-16 (upto the month of December 2015)
under Grid and Off-grid Power is given in the following table16:
State-wise Physical Progress during 2015-16
Financial Year 2015-16 (As on 31.12.2015)
Programme/System Target Achievement Cumulative Achievement
Grid Power (Capacity in MW)
Solar Power 1400.00 1119.76 4878.87
Off-Grid (Capacities in MWeq)
SPV Systems 50.00 54.66 289.01
The Cabinet Committee on Economic Affairs has given its approval for setting up of over
5,000 MW of Grid-Connected Solar PV Power Projects on build, own and operate basis. The
work will be implemented by Solar Power Developers (SPDs) with Viability Gap Funding (VGF)
under Batch-lV of Phase-ll of the Jawaharlal Nehru National Solar Mission (JNNSM).The total
investments expected under this scheme is about Rs 30,000 crore. This would help in creating
additional 5000 MW capacity of Grid-connected Solar PV power generation projects in four
trenches of each 1,250 MW capacity during four financial years viz. 2015-16, 2016-17, 2017-18
and 2018-19. This would also help in employment generation of about 30,000 people in rural
and urban areas with reduction of about 8.525 Million Tonnes of CO2 emissions into
environment every year17.
The estimated requirement of funds to provide Viability Gap Funding (VGF) for 5,000 MW
capacity Solar projects is estimated to be Rs. 5,050 Crore (Rs 1.00 Cr / MW). This includes
handling charges to Solar Energy Corporation of India (SECI) @ 1% of the total grant disposed
and Rs. 500 crore for payment security mechanism for all three Viability Gap Funding (VGF)
schemes of 750 MW, 2000 MW and 5000 MW. The phasing of investment is estimated as
under18:
16
http://mnre.gov.in/ 17
PIB, dated 20.1.2016 18
Ibid
-7-
Year-wise Investment Requirement
Year
Total (Rs crore)
Handling & Monitoring charges for SECI @ 1% (Rs crore)
Total fund requirement (Rs crore)
2015-16 500.00 5.00 505.00
2016-17 1125.00 11.25 1136.25
2017-18 1125.00 11.25 1136.25
2018-19 1125.00 11.25 1136.25
2019-20 1125.00 11.25 1136.25
Total 5000 50.00 5050.00
SCHEMES FOR DEVELOPMENT OF SOLAR ENERGY
The Government is promoting Solar power development in various parts of the country
through the following schemes19:
i). Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects.
ii). Scheme for Development of Solar PV Power Plants on Canal Banks/ Canal Tops.
iii). Scheme for setting up of 300 MW of Grid connected Solar PV Power Projects by Defence Establishments under the Ministry of Defence and Para Military Forces with viability Gap Funding under Batch-IV of Phase-II/III of JNNSM.
iv). Scheme for setting up 1000 MW of Grid- Connected Solar PV Power Projects by Central Public Sector Undertakings (CPSUs) with Viability Gap Funding under Batch-V of Phase-II of JNNSM.
v). Scheme for Setting up of 15000 MW of Grid connected Solar PV Power Projects under Batch II of Phase II of National Solar Mission by NTPC Vidyut Vyapar Nigam Ltd. (NTPC/NVVN).
vi). Setting up of 2000 MW Grid connected Solar power with Viability Gap Funding through Solar Energy Corporation of India (SECI).
INITIATIVES AND INTERVENTIONS TO PROMOTE SOLAR ENERGY
The National Action Plan on Climate Change points out: "India is a tropical country,
where sunshine is available for longer hours per day and in great intensity. Solar energy,
19
Rajya Sabha Unstarred Question No. 2465 dated 21.12.2015
-8- therefore, has great potential as future energy source. It also has the advantage of permitting
the decentralized distribution of energy, thereby empowering people at the grassroots level20.
The Government is providing a range of Fiscal and Financial incentives for promotion of
Solar energy under various schemes:
Exemption from excise duties and concession on import duties on components and equipment required to set up a Solar plant
A 10-year tax holiday for Solar Power Projects.
Wheeling, banking and third party sales, buy back facilities by states.
Guaranteed market through Solar power purchase obligation to states.
Generation Based Incentives (GBI) Schemes for small projects connected to grid below 33 kV.
Reduced wheeling charges as compared to those for conventional energy.
Special incentives for exports from India in renewable Energy technology under renewable energy sector- specific Special Economic Zones (SEZ).
A payment security mechanism to cover the risk of default by state utilities/discoms.
A subsidy of 30% of the project cost for off-grid Solar thermal projects, subject to availability of funds21.
The new Solar target of 100 GW is expected to abate over 170 million tonnes of CO2
over its life cycle. To facilitate such a massive target, the Prime Minister’s Office has been
pushing various Ministries to initiate supporting interventions, like:-
(a). incorporating changes in land use regulations and tenancy laws to facilitate aggregation and leasing of land by farmers/ developers for Solar projects;
(b). identification of large chunks of land for Solar projects;
(c). identification of large Government complexes/ buildings for rooftop projects;
(d). clear survey of wastelands and identification of transmission/ road infrastructure using satellite technology for locating Solar parks;
(e). development of power transmission network/ Green Energy Corridor;
(f). setting up of exclusive parks for domestic manufacturing of Solar PV modules;
(g). provision of roof top Solar and 10 percent renewable energy as mandatory reform under the new scheme of the Ministry of Urban Development;
(h). amendments in building bye-laws for mandatory provision of roof top Solar for new construction or higher Floor Area Ratio (FAR);
20
http://mnre.gov.in/ 21
PIB, dated 3.12.2015
-9-
(i). considering infrastructure status for Solar projects; raising tax free Solar bonds; providing long tenor loans; making roof top Solar a part of housing loan by banks/ National Housing Bank (NHB) and extending India Infrastructure Finance Company Ltd. (IIFCL) credit facility to such projects by the Department of Financial Services;
(j). suitable amendments to the Electricity Act for strong enforcement of Renewable Purchase Obligation (RPO) and for providing Renewable Generation Obligation (RGO);
(k). incorporating measures in Integrated Power Development Scheme (IPDS) for encouraging distribution companies and making net-metering compulsory22.
SOLAR CITIES
The Ministry of New and Renewable Energy is implementing a programme on
“Development of Solar Cities”. The main objective of the Solar cities is to reduce the fossil fuel
based energy consumption by 10% through a combination of energy efficiency measures and
enhancing supply from renewable energy sources. The criteria set by the Ministry for
identification of cities include a city having population between 50,000 to 50 lakh (with relaxation
given to special category States including North-East States), initiatives and regulatory
measures already taken along with a high level of commitment in promoting energy efficiency
and renewable energy. 56 cities have been approved under this programme. A total amount of
Rs. 66.53 crore has been sanctioned for Master Plans, Solar city cells, promotional activities
and installation of renewable energy projects. Against this an amount of Rs.24.16 crore has
been released so far23. State/UT-wise details of Solar cities are given in Annexure-II.
INTERNATIONAL SOLAR ALLIANCE
The Prime Minister, Shri Narendra Modi launched an International Solar Alliance (ISA) at
the CoP21 Climate Conference in Paris on 30 November 2015 as a special platform for mutual
cooperation among 121 Solar resource rich countries lying fully or partially between Tropic of
Cancer and Tropic of Capricorn24.
The Prime Minister of India Shri Narendra Modi, and the President of France Mr François
Hollande, jointly laid the foundation stone of the International Solar Alliance (ISA) Headquarters
22
PIB, dated 17.6.2015 23
Lok Sabha Unstarred Question No. 3165 dated 17.12.2015 24
PIB, dated 15.12.2015
-10- and inaugurated the Interim Secretariat of the ISA in the National Institute of Solar Energy
(NISE), Gurgaon on 25 January 201625.
Recently, Government of India has dedicated 5 acre land in NISE campus, Gurgaon for
the ISA Headquarters and also has contributed Rs 175 crore for ISA corpus fund and also for
meeting expenditure for initial five years. ISA will be India’s first International and Inter-
governmental Organization headquartered in India. ISA will be dedicated to promotion of Solar
Energy for making it a valuable source of affordable and reliable green and clean energy in 121
member countries26.
ISA has been envisioned as a specialized platform and will contribute towards the
common goal of increasing utilization and promotion of Solar energy and Solar applications in its
member countries. The Paris declaration on International Solar Alliance states that the countries
share the collective ambition to undertake innovative and concerted efforts for reducing the cost
of finance and cost of technology for immediate deployment of competitive Solar generation,
financial instruments to mobilise more than 1000 Billion US Dollars of investments needed by
2030 for the massive deployment of affordable Solar energy and to pave the way for future
Solar generation, storage and good technologies for countries’ individual needs27.
CONCLUSION
The Global Warming, Air Pollution and Climate Change are danger signals that all is not
too well with environment. Solar energy, which is abundantly available in the country and
accounted for mere one per cent of nearly two lakh mw of power generated in the country, is
being pursued with renewed vigour. The target of one lakh mw of Solar power by 2022, which
looked over ambitious, now seems to be within the realms of reality with some States already
witnessing silent revolution on Rooftop Solar Power generation with the launch of net metering
in the country28.
Promotion of Solar power will ensure that the fruits of development reached the common
man. These renewable sources of energy will help government to reach every nook and cranny
of the country particularly remote areas where grid connectivity is not there. The cost of
25
PIB, dated 25.1.2016 26
Ibid 27
Ibid 28
PIB, dated 4.6.2015
-11- electricity from Solar photo-voltaic cells is coming down drastically. Also costs of coal is
increasing year after year particularly that of imported coal thereby raising the cost of thermal
power. Recently new Solar photo-voltaic cells have been developed, which can convert 40 per
cent of Solar light falling on it to electricity as against the present ones which convert only 25 per
cent29.
"India has now graduated from megawatts to gigawatts in terms of renewable energy production"30.
29
Ibid 30
Prime Minister, Shri Narendra Modi at RE-Invest 2015 (www.mnre.gov.in)
-12-
Annexure-I
State-wise details of Power Generated from Solar Plants during last three years
Source: Lok Sabha Starred Question No. 261 dated 17.12.2015
-13-
Annexure-II
State-wise list of approved Solar Cities
Sr. No State Approved Solar Cities
1 Andhra Pradesh 1. Vijayawada 2. Narsapur Town
2 Assam
3. Guwahati
4. Jorhat
3 Arunachal Pradesh 5. Itanagar
4 Chandigarh 6. Chandigarh
5 Chhattisgarh 7. Bilaspur
8. Raipur
6 Gujarat
9. Rajkot
10. Gandhinagar
11. Surat
7 Goa 12. Panji City
8 Haryana 13. Gurgaon
14. Faridabad
9 Himachal Pradesh 15. Shimla
16. Hamirpur
10 Karnataka 17. Mysore
18. Hubli-Dharwad
11 Kerala 19. Thiruvananthapuram*
20. Kochi
12 Maharashtra
21. Nagpur
22. Thane
23. Kalyan-Dombivali
24. Aurangabad
25. Nanded
26. Shirdi
13 Madhya Pradesh 27. Indore*
28. Gwalior
29. Bhopal
30. Rewa
14 Manipur 31. Imphal
15 Mizoram 32. Aizawl
16 Nagaland
33. Kohima
34. Dimapur
17 Delhi 35. New Delhi (NDMC area)
18 Orissa 36. Bhubaneswar
19 Punjab 37. Amritsar
38. Ludhiana
39. SAS Nagar (Mohali)
20 Rajasthan 40. Ajmer
41. Jaipur*
42. Jodhpur
21 Tamil Nadu 43. Coimbatore
22 Tripura 44. Agartala
-14-
Sr. No State Approved Solar Cities
23 Uttarakhand 45. Dehradun
46. Haridwar&Rishikesh
47. Chamoli – Gopeshwar
24 Uttar Pradesh
48. Agra
49. Moradabad 50. Allahabad
25 West Bengal 51. Howrah 52. Madhyamgram 53. New Town Kolkata
26 Jammu & Kashmir 54. Leh*
27 Puducherry 55. Puducherry
28 Telangana 56. Narsapur Town
*Only In-principal approval given.
Source: Rajya Sabha Unstarred Question No. 63 dated 30.11.2015