India’s CSP projects lie in wait
July 31st, 2012

The Jawaharlal Nehru National Solar Mission (JNNSM) had a lot of promise when it took off in 2008, but insufficient accurate DNI data, the unclear future of government subsidies, challenges in financing projects, and the need for a local manufacturing base, are all issues that could deter CSP progress in India.


Why the delay?


The first batch of Phase 1 allotted 650MW of solar projects: 500MW for solar thermal and 150 MW for solar PV. While most of the PV projects under this batch, the Migration scheme, and the Rooftop PV and Small Solar Power Generation Programme (RPSSGP) have been commissioned, the 500MW of CSP projects through the JNNSM are still in the construction phase. So far, only one 2.5MW CSP plant is working – the scalable ACME Telepower solar tower in Rajasthan – and developers have until May 2013 to commission CSP projects under the first batch.


“The date for commissioning of CSP projects is still far and therefore, I wouldn’t conclude that developers are behind in completing their CSP projects. However, some of them have asked for extension of time mainly because of delay in availability of heat transfer fluid”, Tarun Kapoor, joint secretary of India’s Ministry of New and Renewable Energy (MNRE), tells CSP Today.


Some local CSP developers also claim that efficiencies and DNI data from public sources was highly misleading during Phase 1, partly due to the inadequate resources of validated data for various sites in India, with different players claiming to hold accurate information.


This led to difficulties in the execution of projects, prompting the MNRE to conduct ground solar monitoring at several locations. “Measures like the MNRE’s efforts to set up solar radiation measurement stations at various regions are increasing investors’ confidence for funding projects in India”, Hari Chereddi, managing director of Hyderabad-based Sujana Energy, tells CSP Today.

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Although the JNNSM is trying to encourage the development of both PV and CSP technologies by giving each equal weight, Chereddi points out that “by allotting specific quotas for each technology, the JNNSM is dictating the ratio of technology that can be built, rather than allowing the market to select the most efficient and cost-effective technology for India”.


Financing and technology dilemmas


Another large issue has been that the solar sector is comparatively new to financial institutions in the country, as only a few of them have seen the full cycle of solar power projects and how they behave. For this reason, most financial institutions are looking at solar power projects very cautiously.


“Some institutions have expressed fears about extending finance on concerns that the technology may not perform as expected and that developers may not get paid on time”, says Chereddi. Furthermore, PV prices have fallen rapidly over the past two years and there has been no consensus on what price will make a CSP plant profitable.


Scarcity of water in some of the high-DNI areas poses yet another challenge. For example, about a 35,000km area of the Thar Desert has been set aside for solar power projects, which receives 2,000kWh of sunlight radiation per square metre annually. Although this allocated region could potentially generate between 700GW-2100GW of energy, it lacks sufficient water.


Most CSP technologies used today are water based, and despite the availability of some non-water based CSP systems, they are not yet cost-competitive. In addition, there is the challenge of connecting to the main grids, as most parts of the region’s CSP-installed land lack transmission lines.

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