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Creating a Skilled Workforce to Scale Up Clean Energy in India

Posted on 2nd November 2015 in Energy, Renewable Energy, solar

By Kanika Chawla and Neeraj Kuldeep

As Prime Minister Narendra Modi stated in San Jose, California last month, “India has the makings of becoming a clean energy world capital.” India’s revised renewable energy targets, aiming to achieve 175 gigwatts (GW) of renewable energy in the next 7 years, have received much attention both internationally and within the country. The commitment to scale up solar photovoltaic (PV) capacity from the current 4.3 GW in September 2015 to 100 GW by 2022 is a mammoth task. Similarly, increasing wind capacity from the current 24 GW to 60 GW by 2022 will be no easy task.

The policy support required to reach these targets as well as the financial mechanisms needed to attract adequate investment to realise these targets, are receiving much needed attention. However, another key aspect to achieve these targets is the availability of skilled manpower. As explored at a CEEW-NRDC roundtable held this month in New Delhi – which brought together manufacturers, developers, international experts and other renewables sector stakeholders – a first step to creating a job-ready workforce for clean energy is understanding the skill needs at each stage of a solar or wind project.

CEEW – NRDC analysis released earlier this year during RE-INVEST 2015 projects that reaching the 100 GW solar capacity target could create up to 1 million FTE jobs, and reaching the 60 GW wind capacity target could create an additional 185,000 jobs. These numbers do not include the jobs created in the manufacturing of solar cells, solar modules, and wind turbines. However, given the growing demand for solar and wind power products, coupled with the government’s “Make in India” programme, a significant number of jobs could be created in the clean energy manufacturing sector. This is promising news, given India’s need for 10 million new jobs every year.

The clean jobs created will require workers across a range of skill sets. Our analysis for wind power suggests that as many as 75% of the jobs created will require workers with some level of specific skills. This underpins the imminent need to create a skilled workforce to take the jobs created by the solar and wind sectors. Government agencies have proposed a range of initiatives to strengthen the skill development infrastructure across India (as laid out in our previous blog), but a closer look at the nature of skills required at the different stages of renewable energy capacity addition is now needed.

Currently, specific trainings for renewable energy projects in universities, technical training centres and vocational centres is limited. During the CEEW- NRDC expert roundtable, we discovered that much of the training of the workforce is currently performed on site by the project developers. However, this on-the-job training approach results in project delays and a lack of standardisation across the industry. Understanding the skill needs at each stage of a clean energy project could help national agencies like the Green Sector Skill Council develop specific training programmes and curricula that will create a job-ready workforce for solar and wind projects.

The development process for solar and wind farms can be categorised into five groups: Manufacturing, Business Development, Design and Pre-Construction, Construction and Commissioning, and Operations and Maintenance. Manpower requirements vary in each phase, with construction and commissioning being the most manpower intensive, while business development is the least intensive.

Manufacturing: Wind and solar component manufacturers are independent of the rest of the development cycle but are directly influenced by the demand of system components. India is already one of the largest wind manufacturers in the world, exporting turbines to other countries. Manufacturing of components requires highly skilled manpower involving manufacturing engineers, technicians and operators, quality assurance specialists and R&D engineers.
- Occupations at a wind manufacturing plant involve casting and finishing mechanical parts, metal fabrication, electro-mechanical fabrication, assembly of electrical systems and production and installation of control systems.
- The skills required at a solar manufacturing facility are most often related to machine operations, fabrication, assembly and product testing.

Business Development: At this stage of a clean energy project, highly skilled personnel are required to conduct a diverse set of activities such as obtaining finance, sourcing and purchasing suitable land, obtaining permissions, and negotiating contractual agreement on power supply.
Design and Pre-Construction: This phase of operations requires technical understanding of each of the system components as well as the entire system, technical standards, relevant design regulations, contractual agreements and selection of manufacturers. Personnel with an engineering background with few years of relevant experience in the domain are tasked to design the entire plant with technical specification of each component.
Construction and Commissioning: Most of the time construction and commissioning work is contracted to an independent construction and professional service firm. Construction work includes site preparation, installation of system components and power lines, procurement of system components and commissioning. The main professional level skills required are civil, electrical and mechanical engineering. A variety of semi-skilled and unskilled technicians, electricians and construction workers are also required.
Operations and Maintenance: Most of the skills required during this phase are for day-to-day maintenance of system components such as wind turbines, PV modules, inverters and monitoring of system performance. Skilled engineers operate and maintain the plant with the help of semi-skilled and unskilled support teams. These jobs are permanent jobs, lasting over the life of the power plant.

CEEW and NRDC will be continuing to identify the existing gaps and needs to train a skilled workforce to facilitate the rapid scaling of the solar and wind energy sectors. The creation of such a workforce is imperative for the realisation of the country’s mammoth renewable energy targets in a timely manner.

comments: Closed tags: renewable energy, skills, Solar

Creating A Solar Army: Training Workforce to Support India’s Renewable Energy Targets

Posted on 7th October 2015 in India, National Solar Mission, Renewable Energy, solar

By Morgan Capilla, Meredith Connolly and Kanika Chawla

India’s renewable energy industry is growing at a rapid pace, with the solar and wind sectors experiencing tremendous capacity addition. Ensuring that the domestic workforce is equipped with the necessary skills is critical to the country’s plans of installing a mammoth 175 gigawatts GW of renewable energy by 2022. It also resonates with Prime Minister Modi’s priority of creating jobs and a manufacturing base in India. Through efforts such as the Sector Skill Council for Green Jobs, Skill India, and Make in India, the central government is putting forth numerous skill development initiatives to boost clean energy development.

India’s installed solar energy capacity recently surpassed 4 GW, positioning India among the top ten global leaders in solar energy. The central government formalized a fivefold increase in its National Solar Mission, targeting a whopping 100 GW by 2022. Currently the world’s fifth largest wind energy producer, India is also aiming to achieve 60 GW of wind installations by the same year. According to a study by NRDC and the Council on Energy, Environment and Water (CEEW), deploying this amount of wind and solar energy could generate over 1 million jobs . As demand for a skilled renewable energy labor market increases, policy support is needed to help create a skilled workforce in order to sustain this renewable energy growth. A range of initiatives are being proposed to bolster the training and skill development infrastructure across India so the country can successfully achieve its twin objectives of clean energy development and employment generation.

Industrial Training Institutions: Prime Minister Narendra Modi unveiled plans to train 50,000 Indian citizens, often referred to as a solar army, in solar energy services to support the National Solar Mission’s goals. Training courses will be offered throughout India’s numerous Industrial Training Institutions (ITIs), where the Ministry of New and Renewable Energy (MNRE) is currently working to incorporate clean energy curricula. With nearly 12,000 ITIs located across India, these institutions could make renewable energy training programs more accessible to citizens.

Sector Skill Council for Green Jobs: MNRE, the Confederation of Indian Industry (CII), and the Ministry of Skill Development and Entrepreneurship (MSDE) took a significant step to enhance renewable energy skill development by creating the Sector Skill Council for Green Jobs (SSCGJ). Introduced in May 2015, SSCGJ will create training curricula for occupations within the clean energy market. In addition to helping create training programs, SSCGJ will also offer training opportunities to citizens. During its first year in effect, SSCGJ aims to provide training to 1,500 renewable energy teachers. Additionally, the council will work to authorize 60 renewable energy training organizations and prepare over 1 million citizens for employment in the renewable energy sector.

Draft National Renewable Energy Act: In another significant stride towards furthering clean energy skill development in India, MNRE proposed the National Renewable Energy Act in the summer of 2015. The Renewable Energy Act lays out a comprehensive policy framework to support growth in India’s renewable energy sector, directly addressing the domestic manufacturing and skill improvements required to sustain this growth. The Act seeks to integrate renewable energy education into academic and vocational institutions across India.

National Policy for Skill Development and Entrepreneurship (NPSDE): The government of India is also enacting a variety of policies to improve India’s broader skilled labor force. Within these overarching policies, government officials are making specific provisions to support the renewable energy workforce. Earlier this year, for example, India announced the National Policy for Skill Development and Entrepreneurship (NPSDE), a comprehensive policy approach to strengthen India’s skilled workforce. Two prominent features of NPSDE include the Skill India and Make in India campaigns.

The Skill India initiative aims to engage Indian youth in quality training programs and standardize skill certification to effectively meet India’s national missions. The program incentivizes skill certification by offering cash rewards for youth who complete certification programs. The program is projected to invest Rs. 1,500 crores to train 2.4 million youth throughout India’s various employment sectors, including renewable energy.

Make in India seeks to fortify India’s domestic manufacturing industry by attracting investments, enhancing manufacturing infrastructure, and improving skill capacity in the Indian labor force. The campaign focuses on 25 industries in India, including the renewable energy sector.

Through these numerous skill development initiatives, the Indian government is demonstrating commitment to meeting the demands of the burgeoning renewable energy sector by creating a talented and capable workforce. As the renewable energy industry continues to mature with the support of skilled workers, India has the opportunity to establish itself as a global leader in quality and reliable clean energy services.

Over the coming months, NRDC and CEEW will be analyzing the availability and gaps in work force and skills requirement of solar and wind energy sectors. We will be conducting detailed industry interviews, coupled with an assessment of available training programs to identify industry trainings needs. We would also update the NRDC-CEEW analysis of job creation from the renewable energy targets in light of recently announced annual targets for renewable energy capacity. Over the coming weeks we will come back with further updates on skills and training programs as our industry survey and research progresses.

The above piece was first posted on the Natural Resources Defense Council blog ‘Switchboard’. Link: http://switchboard.nrdc.org/blogs/skwatra/creating_a_solar_army_training.html

comments: Closed tags: India, jobs, renewable energy, Solar

China’s solar flares burn some

Posted on 2nd September 2015 in Energy, solar

By Arunabha Ghosh

On May 20, the world’s most valuable listed clean energy company’s stock collapsed 47 per cent. Trading in Hong Kong listed Hanergy Thin Film Power (HTF)’s stocks were suspended after the share prices dropped in less than one hour. The fall was as steep as HTF’s rise was meteoric. Even last October, the HTF stock was valued at HK$1.50, but then rose rapidly to a high of HK$9.07. On the day of the crash, shares opened at HK$7.32 and settled at HK$3.91, wiping out nearly $19 billion in value. The news was barely picked up in India, strangely for a country with vast ambitions for renewable energy. What should we make of these developments?

HTF is a subsidiary of the Beijing-headquartered and unlisted Hanergy Group. Its promoter, Li Hejun, owns nearly 75 per cent of the HTF shares and, thanks to the rise of the stock value, became one of China’s richest men. Earlier this year, Financial Times identified two reasons to worry about HTF. First, since Mr Li owned a large share, small volumes of trading in the thinly traded stock could have a big impact on the share price, either rapidly pushing it up or pulling it down. Analysis of two years of data found that much of the price surges happened towards the last 10 minutes of daily trading.

The second concern was more worrying. In 2010-13, nearly all of the sales of HTF had been to its parent company. Hanergy Group uses HTF equipment to manufacture thin-film solar panels. In turn, most of this production goes to Hanergy’s own solar installations. Despite much lower sales than its competitors, HTF managed to post profit margins in excess of 63 per cent in 2013 and ended up being more valuable than the entire Chinese solar sector combined. The Hong Kong market regulator has initiated an investigation.

Investors in clean tech enterprises look for at least three elements that could affect expected returns. First, the technology, related innovations and associated risks. Secondly, overall market direction, as a result of technological advances; falling costs; incremental energy demand; international negotiations; or domestic policy. Thirdly, the certainty and longevity of domestic policy signals. China has tempted on all three fronts, but at times damagingly.

Hanergy placed its bets on thin-film solar technology, making strategic acquisitions in Germany and the United States to give it a market edge. But some analysts have questioned this move, since thin film is still just about 10 per cent of the global solar market. In fact, China’s solar manufacturing has been almost entirely with crystalline silicon photovoltaic (PV) technology. In 2013, thin-film production was about 300 megawatts (one per cent of total PV production in China).

Overall, manufacturing capacity continues to be added in China and costs keep falling (though the pace has dropped). The top 10 solar manufacturers, alone, produced more than 14,000 Mw of modules in 2013. There are, by some estimates, well more than 500 solar manufacturers in China, which now dominates global solar production. In 2013, China had 42 gigawatts out of 60.5 Gw of global production capacity. Production was lower, at 27.4 Gw, still 69 per cent of global PV production that year. And there is a strong export orientation. In 2011, 90 per cent of PV production was exported; in 2012, it was 86 per cent; and in 2013, it was 61 per cent.

The policy direction has also been steadfast. China has elevated the status of clean tech in its new vision for industrial policy. Under its current 12th Five-Year Plan, China named seven new strategic and emerging industries, which included energy saving and environmental protection, new energy (nuclear, solar, wind, biomass) and clean energy vehicles. Last year, 10,560 Mw of solar were installed bringing total capacity to more than 28,000 Mw. By 2030, Bloombergestimates, China is likely to have more low-carbon electricity capacity than the total US power generation capacity.

Given India has one-fifth the power generation capacity of China’s, its large renewable energytargets (175 Gw planned by 2022) are, in relative terms, even more ambitious. In 2010, India’s renewable energy share in electricity generation was already more than twice that of China’s (if large hydro were excluded) and will be a much larger share in future. As I argued in this column in February (mybs.in/2Rt7Ov0), India’s solar manufacturing will need more competitiveness.

But China’s experience offers sobering lessons for India. First, cherry-picking technology is dangerous. It is far better to create direct price signals through explicit carbon taxes, which would help to create a level playing field for energy technologies.

Secondly, easy credit distorts markets and reduces competitiveness. China accounts for 70 per cent of global excess capacity (another major solar manufacturer, Yingli, saw its shares drop 37 per cent on May 19 due to its inability to service debt). After another market leader, Suntech, went bankrupt in 2013, the Chinese government announced a list of 134 enterprises that met PV manufacturing norms. This list is reviewed every six to 12 months. But Chinese firms are now tapping into the country’s shadow banking system. Better regulatory oversight is critical.

Finally, trade disputes over clean tech will likely grow. Seven of the top 10 Chinese manufacturers were also among the top 10 exporters of solar modules in the world. Unless the Chinese domestic market absorbs a growing share of production, mercantilist competition in global markets will increase. India’s strategy to promote clean tech manufacturing must work around these three risks.

The above column was published in the print edition of Business Standard on 16 June 2015.

Link: http://www.business-standard.com/article/opinion/arunabha-ghosh-china-s-solar-flares-burn-some-115061501170_1.html

comments: Closed tags: china, renewables, Solar

Greening the tracks: Union Rail Budget 2015-16

Posted on 13th March 2015 in Environment, India, Renewable Energy, solar

By Aditya Ramji

The new Government under Prime Minister Narendra Modi recently presented its first rail budget under the leadership of Shri Suresh Prabhu, Hon’ble Union Minister of Railways, Government of India. Mr Prabhu in his speech while admitting that the Indian Railways had many challenges, charted out a plan, which indicated clarity of vision and a commitment to ensure that the vision takes shape with specific plans.

The Indian Railways (IR), with a network of over 64000 route-kilometers has integrated markets and connected communities over widely spread out geographies across the length and breadth of the country. The Indian Railways is the third largest railway network in the world in terms of size, the world’s largest passenger carrier (in terms of Passenger Kilometers) and fourth largest rail freight carrier.

Laying the Green Track: Railway Budget 2015-16 (Image Credit: Alles Banane)

As a strategy, the railways is looking to adopt a medium term perspective, build partnerships, leverage additional resources, revamp management practices and systems and finally, set standards for governance and transparency.

To see through these reforms, resource mobilisation is critical. The prime challenge is that the financial resources of the Union Government are themselves stretched and internal revenue generation will pick only with growth in GDP and initiation of railway reforms. Resource generation via market borrowings, PPP and equity-driven projects are some of the key ideas to leverage resources in a better manner. With the challenge of raising the extra-budgetary resources, there is a proposal to set up a Financing Cell in the Railway Board, which would engage with sectoral experts.

The Plan Budget has gone up by 52% from INR 65,798 crore in 2014-15 to INR 1,00,011 crore in 2015-16. The Railways envisages an investment of INR 8,56,020 crore over the next five years.

Powering Ahead: Energy and sustainability initiatives

With particular focus on energy and sustainability, the Railways has already taken a step forward by setting up an Environment Directorate within the Railway Board, which would focus on comprehensive environment management. The Union Rail Budget 2015-16 has shown a strong commitment towards improving environmental sustainability within the Railways with specific action plans being mentioned for air and water pollution, waste management, energy efficiency & renewable energy and green technology. Together, these form the pillars of a comprehensive environment management plan for the Railways.

The Solar Mission for the Railways envisages setting up of Solar PV by developers on Railway or private land and on rooftops of Railway Buildings, at their own cost with subsidy/Viability-Gap-Funding support from the Ministry of New and Renewable Energy in the next five years. CEEW analysis has estimated a potential of about 1700 MW of solar PV across various operations of the railways, including use of 5% railway land for such purposes.

From a macro-economic perspective, the budget recognises the linkages of the Railways with welfare goals, from poverty alleviation and job creation to providing a mass transport system that is efficient and sustainable. If the Indian Railways were to ensure effective implementation of its goals, it could become the largest resource-efficient and sustainable rail network in the world. As Mr Prabhu said, “Investment in the Indian Railways is also necessary for environmental sustainability and well being of future generations.” Apart from a significant contribution to emission reduction, the railways would also accrue huge cost-savings which could be used as investment to further the quality of infrastructure and service delivery within the railways. At a micro-level, with the Railways following a policy of Delegate, De-centralise and De-regulate, this exercise would also serve as a capacity building measure for railway officials at all levels and would facilitate a successful system that runs both top-down as well as bottom-up.

comments: 1 » tags: Indian Railways, railway budget, renewables, Solar, sustainability, transport

Speed, scale, skill… solar?

Posted on 12th March 2015 in Clean Energy, Energy, India, National Clean Energy Fund, National Solar Mission, Renewable Energy, solar

By Arunabha Ghosh

I once asked a rural bank officer how he managed to convince farmers to take large loans to install solar panels. He replied, “I remind them that they use two units of electricity a day (60 a month, 730 a year). This country has given you so much. Won’t you install solar power, reduce your consumption from the grid and give back to the country?” This Kennedy-style pitch to market solar in India was heart-warming, even inspiring. But to reach 100 gigawatts (GW; which the government plans) by 2022, more than inspiration will be needed. In line with the prime minister’s mantra, the solar sector has to match ambition with speed, scale and skill.

India has a little over 3 GW of installed solar power capacity. In order to reach 100 GW, installed capacity has to double every 18 months or at a compounded annual growth rate of 62 per cent, a tall ask by any standard.

The speed of execution depends on several factors. Delays in announcing policies create uncertainties. If developers do not know the tariffs for even the next financial year, how can they secure long-term, low-interest debt finance? Alongside, a roadmap for enforcing renewable purchase obligations (as Rajasthan has done) is urgently needed. A third issue is land availability. Less than 1 per cent of the barren and uncultivated land in the country would be sufficient for 80 GW of grid-connected projects. But land acquisition is not easy. Land accounts for 3.5 per cent of project costs but could increase with rapid deployment and price speculation. State governments could create land banks (Gujarat, Karnataka), lease government land for 25 years or less (Rajasthan), offer exemptions on stamp duties on sale of private land (Madhya Pradesh), or ensure a small share per unit of electricity to the landowner. Whatever the solution, it has to be implemented quickly.

There is no use investing in solar projects if the infrastructure to evacuate power to the grid does not keep pace. The Ministry of Power must provide detailed roadmaps for building new substations. The Green Corridors being implemented in Rajasthan and Tamil Nadu could be further expanded. Electricity regulatory authorities must also consider exemptions from wheeling charges. With net metering policies, grid-connected rooftop projects should be accorded priority in dispatching power.

With speed comes scale but there is more than one route. Council on Energy, Environment and Water (CEEW) researchers have proposed three alternatives: “utility heavy” (80 GW of utility scale projects), “rooftop heavy” (45 GW of rooftop projects), and “rural decentralised heavy” (20 GW of solar irrigation pumps). It might be tempting to dream of mega solar parks but they also bring with them the challenges of land acquisition and dispatch. If 15 per cent of irrigation pumps were converted to solar they would amount to 20 GW capacity. Similarly, one-fifth of the 31 million households with roof cover sufficient for 3 kW systems could add 20 GW. Scale can also have strong developmental co-benefits.

All three scenarios would need investments of about $140-$160 billion. These estimates include the costs of energy balancing, with storage equivalent to half of utility scale capacity. The costs increase by over 50 per cent when solar is balanced with gas-based backup. In order to absorb investments at this scale, new institutions and innovative finance would be needed. A Green Bank, initially capitalised via the National Clean Energy Fund, could offer low-interest loans with long-term tenure. It could help to channel infrastructure debt funds and investments from insurance and pension funds, as well as large overseas investors. Risk insurance (to ensure bankable projects), exchange swaps (to mitigate foreign exchange risk) and green bonds could reduce cost of capital and leverage more private financing. Housing finance companies could provide loans to property developers for rooftop systems.

The scale of ambitions will also impact manufacturing and imports. At current prices and with no expansion of domestic manufacturing capacity, India would need solar imports worth Rs 2,14,000 crore ($35.7 billion) for 100 GW. If every year domestic production grew 1 GW and international panel prices fell 6 per cent, imports could fall to Rs 96,000 crore ($16 billion). Reducing import dependence means much greater domestic competitiveness, as well as targeted investments in energy storage R&D.

For speed and scale, skills will be in demand. CEEW and the Natural Resources Defense Council found that between 2011 and 2014, the solar sector created at least 24,000 full-time equivalent jobs across the value chain from business development to design and construction, commissioning, operations and maintenance. If 100 GW were installed, as many as 1 million short-term and about 3,00,000 long-term FTE jobs could be created. These would be over and above any created in manufacturing. Nationwide training programmes, under the National Skills Development Agency, would have to be delivered through a network of trained entrepreneurs (for both grid-connected and decentralised energy projects).

Today, the largest investor conference for renewable energy in India, Re-Invest, will conclude. Up to 266 GW of renewable energy has been committed but financing commitments are less than 30 per cent of these numbers. The roadmap for a significant role of solar in India has many milestones. Speed, scale and skill are needed; there is little time to waste.

(This article was first published by Business Standard Limited on 28 October 2014 and is a part of Dr Arunabha Ghosh’s monthly column ‘Inflection Points’. You can also read the article here:http://www.business-standard.com/article/opinion/arunabha-ghosh-speed-scale-skill-solar-115021601820_1.html)

comments: 0 » tags: finance, India, infrastructure, investments, jobs, renewables, Solar

Energy Swaraj for India

Posted on 21st May 2014 in Energy, Energy Security, India, Renewable Energy, solar

by Suresh P Prabhu

Now that the dust of the historic elections have settled, it is time to start rebuilding India’s economy and empowering its society. With a clear majority for the NDA coalition, India has a historic opportunity to take decisive action with regard to one of the most important stumbling blocks to India’s renewed and sustained growth: energy. A strategic focus on energy matters for boosting growth, creating jobs, checking price inflation, improving social development, and for India’s standing in the world. A multi-pronged strategy, as outlined below, could make us “mukt” of inflation pressures, balance of payment pressures and security pressures while yielding greater opportunities for India’s “energy swaraj”.

Access to energy is closely related to other human development outcomes such as rising levels of income, education, health and reduction in gender disparities. With rising incomes there is also rising demand for more and better quality of energy. Yet, in India we are still unable to provide electricity to 80 million households. Analysis by the Council on Energy, Environment and Water (CEEW), which I chair, found that the absence of sufficient modern energy sources means that consumption of traditional biomass keeps increasing even with rising incomes in rural areas. Energy access is not just a problem associated with poverty and inequality. There are deep structural bottlenecks to supply. As a whole, commercial primary energy consumption in India will grow five and a half times between 2010 and 2050. If this demand is unmet then it will be near impossible to sustain high rates of economic growth necessary to move millions out of poverty and improve their life chances.

But just as the overall demand for energy will increase, equally important will be the choices we make on India’s appropriate energy mix. We are greatly dependent on coal because we have a lot of it. But as is well known, it has become very difficult to extract coal to meet growing demand. Much of our coal lies under thick forest cover. Of course, we need a smoother, more transparent and more legitimate process for environmental clearances. But we also have to be conscious of the potential for deep social unrest if we do not take the needs of some of India’s poorest communities into account. We have to strike a balance between an all-or-nothing growth model and one that offers a more sustainable pathway.

One approach would be to gradually turn our focus to gas, which (if extracted properly) has half the carbon content as coal-based power. But we will need greater policy clarity to ensure time-bound statutory clearances for exploration projects and create a level playing field for India and foreign firms willing to invest in exploration and production. Further, infrastructure bottlenecks in the railway network undermine higher coal production while underutilised and concentrated pipeline network prevents expansion of gas supply to demand centres.

Moreover, we need to reform our pricing structures for energy. In our polity, it is difficult to administer shock therapy but we also have to be conscious of necessary reform. Inefficient fossil fuel subsidies and poor targeting of subsidies has ensured that the poor do not benefit while our economy’s macroeconomic conditions worsen. Pricing reform would need to find balance in three areas: prices that encourage upstream investment while not overburdening the consumer; prices that balance notional energy costs with the real costs on the environment; and prices that balance current economic pressures with those that create opportunities for energy transitions for the future.

An energy transition for India will also mean a growing share of renewable energy. India’s renewable energy aspirations have many drivers: greater energy access, energy security, responding to local environmental challenges and addressing global climate change risks. India now has more than 20 gigawatts (GW) of installed wind power and more than 2 GW of solar power (the latter in just three years, in large part due to installations in Gujarat and Rajasthan). Yet, we have not yet established a robust financing ecosystem for renewable energy projects. CEEW’s evaluation of India’s green industrial policy reveals that incentives such as feed-in tariffs and generation based incentives have had less success than preferential tax treatment and income tax holidays. This is because project developers are worried about the enforcement of contracts and the financial health of state utilities. Such uncertainty has also ensured that there is little confidence in the enforcement of renewable purchase obligations and little activity in the renewable energy certificates market. For a country with 300 days of sunshine and upwards of 100 GW of wind potential, it is a shame that we have not addressed such policy barriers adequately.

Renewable energy could also be an important component of India’s manufacturing revival. This is not to suggest that India should turn protectionist and impose trade barriers. In fact, we have benefited from the imports of solar panels, whose prices have rapidly fallen in recent years. At the same time, we need not be wholly dependent on imports as well and could, instead, build an R&D and manufacturing base which leverages opportunities in a global market. The top ten importers of solar equipment in the world are also the top ten exporters. India should be part of this global supply chain. Equally, various customs and excise duties applied creatively have allowed Indian firms to import wind turbine components and assemble them in India, thereby gradually increasing value addition at home.

If we can create conditions for Indian firms to create value across the supply chain, then we would also manage to tap into larger opportunities for job creation in balance of systems, project installation, project management, and servicing and maintenance. In the decentralised energy sector, thousands of skilled workers could be trained and deployed from within the communities, thereby enhancing skills, increasing energy access and creating many more potential village level entrepreneurs.

Finally, India has the opportunity to showcase its energy leadership to the world. Our rising dependence on fossil fuel imports makes our economy vulnerable and compromises our national security. We will have to broaden our import horizon through a combination of better integration in global energy markets and building an optimal supply infrastructure. But India also has lessons for the world, particularly in renewable energy and energy access. India should promote a Solar Club, bringing together the world’s main countries with solar potential and the world’s leading countries with solar technologies. Such an “S-30” could create a larger market for solar deployment, deepen cross-border manufacturing opportunities, drive prices down and allow Indian firms to showcase their business models for decentralised energy in other developing countries.

Suresh Prabhu is former Union Minister of Power and currently Chairperson, Council on Energy, Environment and Water.

comments: 0 » tags: coal, energy security, pricing, renewables, Solar, subsidies

A Case for Exploring the Potential of Thin Film PV Technology in India

Posted on 1st May 2014 in National Solar Mission, Renewable Energy, solar

by Shalu Agrawal and Rishabh Jain

Bucking the global trend, the thin film solar photovoltaic (PV) technology occupies a huge share in Indian solar sector (~40 % compared to ~12% globally). It is estimated that 65% of the projects under the National Solar Mission (NSM) have deployed thin films whereas only 35% of the non NSM projects rely on thin films.

The skewed ratio of thin film in India is often believed to be a result of their exemption from the DCR (Domestic Content Requirement) provision of the NSM and the low interest loans that developers obtained from the international banks like US EXIM bank and OPIC, which often mandated developers to buy panels manufactured in their country. The DCR clause which had aimed to stimulate the domestic manufacturing, failed to do so and instead tilted the technology preference towards imported products.

Globally, solar capacity addition has been driven by cost attractiveness rather than technological preferences. Crystalline solar PV dominates global market due to huge manufacturing capacity (particularly in China), price competition and the fact that it came prior to thin film technology. The argument that solar technology mix in India should align with the global trends overlooks the possibility of technological suitability of thin films to Indian climatic conditions.

Image Courtesy: Sujith Ravi

COMPARATIVE STUDY

Few recent analysis based on production data by research firms have demonstrated a higher CUF (~1%) for thin film based projects in India. To explore further whether there exists a case for thin film in India, an attempt was made to compare the power production potential and financial attractiveness of utility scale (1 MW) solar PV projects using crystalline and thin film panels for a plant located in Jodhpur. To analyse the variation in generation, the study uses mean hourly irradiation and temperature data from NREL’s India Solar Resource Data (hourly) and SEC’s Solar Radiation Handbook respectively.

From the analyses it was found out that a thin film solar plant located in Jodhpur, , would produce 0.71% more power than a plant based on crystalline technology. Assuming deployment of 20 GW of solar capacity by 2022 (JNNSM target), there would be excess generation of 512 million units annually if all projects used thin film panels than all panels being crystalline (at current costs). Given the power shortage in the country to the tune of 7% – 8%, this could go a long way in bringing down the deficit when solar forms a larger share of overall capacity.

The study also tried to assess the financial aspects of the projects based on different technologies under two scenarios. The initial project cost for crystalline and thin film based projects was taken to be INR 7 Crores and INR 6.56 Crores respectively (CERC benchmark cost for 2013-14). The two scenarios for which analysis was carried out have been listed in the table below.

Table 1: Assumptions for analysis

Variables	Scenario 1	Scenario 2
Debt-equity ratio	70:30	70:30
Loan Period (years)	10-12	10-12
Interest rate	13%	13%
VGF (INR Lakhs)	Nil	135*
Feed in Tariff (INR per KWh)	To be evaluated	5.45
Accelerated Depreciation	Nil	Nil
Project time period (years)	25	25

*Minimum VGF support granted under DCR category in Phase II bidding

Scenario 1: The break even Feed in Tariff (FiT) for project time is found to be INR 5.9/KWh for crystalline based projects and INR 5.55/KWh for thin film projects. Assuming a FiT of INR 6/KWh, the NPV (Net Present Value at discount rate of 13%) and IRR (Internal rate of Return) of the initial investment in thin film project exceeded that of crystalline project by INR 44 L/MW and 3% respectively with a shorter payback period.

Scenario 2: This scenario tries to mirror the Phase II of JNNSM. The Viability Gap Funding is assumed to be INR 1.35 Crore (Lowest Bid in the DCR category). It was observed that the NPV and IRR of the initial investment in thin film project exceeds that of crystalline by INR 43.62 L/MW and 4% respectively, with former having shorter payback time.

In both the above scenarios, we observe that even without favourable situations created by external factors (low interest financing/ predatory pricing of panels), thin film projects appear to be financially more attractive due to their technological as well as cost advantage. This difference arises from two factors. One, thin films produced more power at higher temperatures due to lower temperature coefficient (-0.2%/K) than crystalline (-0.442%/K), Secondly the thin film panels are cheaper which reduces the debt servicing burden as well as equity requirements.

Thin film technology, it seems, may turn out to be climatically as well as financially more suitable for the Indian context. However, the study has its limitations in terms of availability of datasets like temperature, solar irradiation, and degradation rates for thin film and crystalline solar PV panels. For this study, a similar degradation rate (0.5% per year) for both technologies has been assumed, based on analytical study by NREL.

HAULING UP THE DOMESTIC MANUFACTURING CAPACITY

Cheap imports of PV panels are believed to be the reason behind forced closures and debt restructuring of India’s PV manufacturers. Imports of cheap crystalline panels from China, which are believed to heavily subsidised, are preventing discovery of potential technology in India, besides hurting the local manufacturing capacity. Indian government is planning to impose anti-dumping duties and an investigation is pending.

Under the NSM, the ‘thin film loophole’ which was being exploited by developers has been plugged after the DCR clause has been made technology neutral (Phase II guidelines). However, thin film manufacturing capacity in India is small. This implies that DCR provision would now become technologically biased towards crystalline technology, for want of thin film supply. This is significant in view of the phase II targets under JNNSM of deploying 4-7 GW of solar capacity in India.

Measures like anti-dumping duty and DCR provision are significant to protect a budding industry, but a comprehensive solar policy should capitalise on domestic strengths and opportunities. Technological neutrality in the given market scenario might actually end up discouraging the adoption of the most appropriate technology.

India’s manufacturing policy for solar sector, then, should proactively incentivise research, innovation and deployment of the most suitable technology options, besides stimulating the domestic manufacturing capacity. Various measures and institutions that can be utilized for this purpose are listed below.

Incentivising Research and Innovation through following measures:

1. Making public the real time power production data from existing and upcoming solar plants and specifying the technology employed. This will enable a realistic study of power production trends and allow the developers to make more informed technology choices.

2. Strengthening and reinvigorating existing institutions:

a. National Clean Energy Fund (NCEF) has been created to facilitate research and innovation in clean energy technologies. However, it has been used to allocate funds to projects that mostly promote small-scale proven technologies or meeting budget shortfalls. There is a need to revise the NCEF guidelines to foster research and facilitate adoption of most appropriate technologies by setting priorities and effectively channelizing the resources.

b. National Institute of Solar Energy (NISE) is doing commendable research work but lacks focus on commercial viability of its ideas and innovations. By expanding its focus towards commercial aspect, NISE can enhance the utility of its research efforts.

c. National Council of Research (NCE), proposed to be established under the JNNSM, should be fast tracked. The Council can encourage technology transfer by facilitating joint projects with sharing of IPR and setting up R&D bases in India by companies abroad (MNRE, 2010).

d. Performance Related Incentive Scheme (PRIS) proposed under the Science and Technology Policy, 2013 can promote basic research leading to scientific publications by offering grant – based investments.

3. Strengthening overall IP regime in India

The corpus of knowledge thus generated will help India to make more effective policy choices with a long term perspective. Alongside, there is a need to stimulate domestic manufacturing capacity by leveraging existing policies:

a. Under Domestic content requirement (DCR) clause of JNNSM, subsidy in the form of VGF support for a certain project capacity is given to stimulate local manufacturing. Presently, there is negligent thin film manufacturing capacity and DCR policy will inadvertently promote only crystalline manufacturing. This calls for a relook into the existing provisions.

b. Special investment promotion schemes aim at promoting manufacturing capacity by offering financial incentives. These include 20 per cent capex subsidy for units located in an SEZ and 25 per cent capex subsidy for those not located in an SEZ, and also a reimbursement of Excise/CVD on imported capital equipment. There is an urgent need to approve the pending applications under earlier Special Incentive Package scheme (SIPs) which expired in 2010and also under Modified – Special Incentive Scheme (M-SIS) along with quick disbursal of subsidy.

c. Technology transfer and joint ventures: In case of crystalline PV technology, Indian manufacturers have used several routes like using expired patents, licensing, collaboration and in house R&D; whereas, thin film technology is relatively recent. So, there is a need for proactive efforts on part of government to facilitate technology transfer and joint projects in R&D of thin film technology.

d. Reducing import duties on raw materials for solar manufacturing industry across the value chain.

India is at a critical juncture in scaling solar energy to provide energy access to its growing cities and vast rural communities. In order to meet our targets in most cost effective and technologically efficient manner, we need to make policy choices in long term perspective.

comments: 0 » tags: JNNSM, PV, renewables, Solar, Technology

Women Stirring Up Decentralised Solar Revolution in Rajasthan

Posted on 8th March 2014 in solar

by Poulami Choudhury

The solar workshop run by Prayatna Sansthan, a local NGO, in Jaipur district’s Solawata village is buzzing with activity and excitement. Confined to traditional roles for ages, women at this workshop are being trained to become solar engineers and are being transformed into breadwinners. This remarkable initiative is largely due to concerted efforts of Barefoot College in Tilonia, along with its affiliated local partners – Manthan and Prayatna Sansthan. These institutions are empowering several women in rural Rajasthan, enabling them to bring sustainable solar solutions to their communities.

A woman working at the solar workshop in Rajasthan’s Solawata village

Meeting Clean Energy and Clean Water Demands

Manthan and Prayatna Sansthan are training these rural women in construction and fabrication of solar components that go into various solar lighting solutions such as lanterns and home lighting systems. Training is also provided in spheres of installation, and repair and maintenance of solar products such as solar lanterns. Women from rural Rajasthan are not the sole beneficiaries of this novel program. Women in isolated parts of Africa have also received training and are lighting up their communities ( Read: Two women ‘solar engineers’ light up Cameroon village).

It is noteworthy that women participation in some cases is not confined to solar lighting solutions alone but also extends to solar powered reverse osmosis (RO) desalination systems providing safe drinking water to communities. Solawata is one example, which has no source of sweet water in the vicinity forcing villagers to consume highly saline groundwater (with total dissolved solids of upto 3000 ppm).

CEEW also discovered that women in-charge of running Prayatna Sansthan’s day care centre in Jaipur district’s Mordi village are successfully operating and maintaining a 5000 liter per day capacity solar-RO desalination system installed in 2012 – one of the few successfully running solar powered RO plant installations in the country funded by the Coca Cola Foundation.

These women have received O&M training from officials of Central Salt and Marine Research Institute (CSMCRI), which has designed and installed this solar-RO plant and Barefoot College. Manthan, Prayatna Sansthan and CSMCRI handle the support for complex repair and replacement of the plant.

The solar desalination plant housed within the day-care center premises is run daily for three hours in the afternoon (12 p.m. to 3 p.m.) to produce potable drinking water for around 30 families. Moreover, this harmonises well with the day-care center timings preventing women from spending additional time to operate the solar-RO plant.

This is an exemplary case of how women with the support of dedicated local institutions can successfully manage perceived complex solar – RO systems, thus ensuring long-term sustainability of such installations. This is contrary to the popular perception that CSR funded decentralised renewable energy projects often fail in the long run owing to dearth of lack of skilled personnel that can oversee maintenance.

Why not scale – up?

The experience from Solawata and Mordi proves that women have a crucial role to play in tackling rural India’s energy poverty and clean drinking water problems. It is imperative that more stakeholders step forward, especially Corporate India which can funnel investments to encourage similar initiatives as part of their Corporate Social Responsibility.

After all, if one considers the bigger picture, it is clear that investments like these can not only spur renewable energy technologies but also result in a range of other benefits in terms of health; clean drinking water; community mobilisation and women empowerment.

comments: 0 » tags: Decentralised, Desalination, Rajashtan, Solar

Solar in India: adopting a whole-of-system approach

Posted on 30th April 2012 in Climate Change, Energy, India, National Solar Mission, Renewable Energy

by Arunabha Ghosh and Rajeev Palakshappa

Creating a new renewable energy market is no easy task. India is blessed with abundant sunshine, in fact 300 days’ worth in most regions. Average incident solar radiation ranges between 4 and 7 kilowatt-hour per day per square metre – much higher than the amount of solar radiation in many other countries. Meanwhile, 70 per cent of India’s primary energy supply relies on fossil fuels while hundreds of millions of people need access to modern sources of energy. In 2010 India launched the Jawaharlal Nehru National Solar Mission, one of the world’s largest solar energy programmes. The aim is to install 20000 megawatts (MW) of grid-connected solar power and 2000 MW of off-grid solar power by 2022. This is an ambitious mission with the promise of responding, in part, to India’s climate challenge and to increasing energy access. Like India, most of the solar potential world over is in tropical countries. But by one count, until 2010, eight of the top ten countries with installed solar photovoltaic capacity were in temperate zones. Clearly, there is a long way to go before India realises its potential in solar energy but the National Solar Mission has positioned itself to play a significant catalytic role. How it could do so is the subject of our recent report, Laying the Foundation for a Bright Future, available here

A nascent solar industry is beginning to take shape in India, with more than 500 MW of capacity installed already. Competitive bids for projects have also driven prices for solar power down rapidly. But installed capacity and prices do not complete the picture. There is a need to understand challenges in installing projects, so that developers are able to do so on time and feed electricity into the grid at committed capacities. There are also questions about choice of technology and policies related to sourcing cells, modules and other equipment. And, perhaps most importantly, solar projects have to be financially viable to attract the levels of investment necessary to meet the Mission’s targets. These issues are interconnected and interdependent, critical to the evolution of a solar ecosystem.

In order to examine all the dimensions of the ecosystem, CEEW and the Natural Resources Defense Council (NRDC) partnered to produce Laying the Foundation for a Bright Future. This report adopts a “whole-of-system” approach, identifying multiple stakeholders and focusing on all aspects of grid-connected solar power: selection, deployment and commissioning of projects; bankability and the role of various financial channels; the development of a robust manufacturing base; and the creation of an enabling environment with regard to land, power evacuation, skills. The figure below shows the different stakeholders operating at various levels in the solar ecosystem; effective coordination among them is essential for a successful Mission.

Drawing on our independent analysis of national, state-level and international programmes to promote solar energy, and after extensive individual and group stakeholder discussions, the report offers findings and recommendations in each of the focus areas. In the minimum it calls for three main policy priorities:
• Clear benchmarks, transparency and monitoring of project performance;
• A coordinated approach to strategic financing that brings together various funding channels and financial institutions; and
• A technology-neutral approach to promoting manufacturing.

The findings and recommendations of this report would be relevant not only for government agencies (at the national and state levels), but also for project developers, manufacturers, financiers, donor agencies, R&D and research institutions, and others keen on the success of the National Solar Mission. We welcome you to read the report and send us your comments. Over the coming weeks CEEW and NRDC will be continuing the discussion. If you are in India keep an eye out for sessions in Delhi and Mumbai, or email us at info@ceew.in for more information.

comments: 3 » tags: Jawaharlal Nehru National Solar Mission, Manufacturing, Natural Resources Defense Council, Research and Development, Solar, Solar Ecosystem

Is technology collaboration the new technology transfer? But how to do it?

Posted on 6th July 2011 in Clean Technology, Climate Change, India, Technology Collaboration, The United States

by Rajeev Palakshappa

For years, climate negotiators have stumbled on a key point of dispute between developed and developing countries – the demand of the latter for the transfer of clean technologies from the former. While there are many reasons why this is a legitimate demand, new initiatives are underway to move towards a new kind of relationship – technology collaboration. The question is: how to do it?

In 2010, as part of efforts to continue to strengthen India-U.S. clean technology research and development collaboration, India’s Prime Minister Manmohan Singh and U.S President Barack Obama launched the India-U.S Joint Clean Energy and Research Development Centre (JCERDC). As part of the JCERDC, the Indian government and U.S. Department of Energy announced a substantive USD $50 Million funding opportunity focused on three specific clean technology areas: Solar, Second Generation Biofuels and Building Efficiency.

The funding opportunity represents an important juncture for India-U.S. bilateral collaboration. For the first time in their extensive history of research cooperation the two governments have worked together to issue a joint funding document. Further, research consortia must include a minimum of two entities from each country. Thirdly, the consortia are expected to co-finance the R&D activities to supplement grants from the governments.

Strong collaboration is a constant theme of the JCERDC. Along with robust scientific proposals, bidding consortia are also required to illustrate strong governance and active involvement from both the U.S. and Indian counterparts in IP development. Through the course of our discussions with private companies and research bodies, it has become apparent that multi-institution, bilateral collaboration is a new approach for a number of organisations and time will be required to build appropriate networks and explore relationships. But several questions remain:

– What mechanisms and platforms exist to help build consortia locally (and subsequently internationally) in a short space of time?

– How to ensure that IP sharing is carried out in an equitable manner?

– What governance arrangements are most appropriate for international collaboration?

The team at CEEW, along with our project partners the Administrative Staff College of India and the Natural Resources Defense Council, has been working to build awareness and disseminate information about the funding opportunity. As part of our programme of outreach activities we have held two workshops (one in Hyderabad, and one in New York) with a third one to be held this Friday in New Delhi. Our aim has been to reach out to entities that may have not otherwise heard about the funding opportunity, act as a platform for collective feedback to the secretariats, and bring together stakeholders who may wish to explore working together.

The New Delhi workshop will aim to explore the outstanding issues further, with input from Intellectual Property experts and insight and experiences shared by discussants from across the funding opportunity sectors. Effective collaboration isn’t something that happens overnight. CEEW, ASCI and NRDC’s efforts are geared to act as a point from where some organisations can build towards future sustainable long-term collaborative research partnerships.

The New Delhi workshop is scheduled to be held at the India Habitat Centre on Friday, 8 July.

comments: 1 » tags: Biofuels, Energy Efficiency, Research and Development, Solar