He’s the founder and Managing Director of Megawatt Solutions Pvt. Ltd, credited with being India’s foremost specialist company for industrial clean energy solutions. Under his leadership, the company in a collaborative partnership with MNRE, has executed a unique diesel and concentrated solar thermal hybrid project, poised to become India’s technological answer to curbing emissions and making the country a global solar hub. Siddharth Malik speaks to Sapna Gopal on the promise the CSP sector holds.
Q: What is your take on hybrid CSP? Are these projects less risky from the investors’ perspective?
A: Hybrid solar thermal projects create far greater value than stand alone solar thermal projects, for the simple reason that they deliver more kWh per kWp of capacity installed in a given square meter of land area occupied. Further, it optimizes resource utilization, as an example, the grid evacuation infrastructure. In the Indian context, it reduces the open access burden on per unit basis, for a hybrid CSP project set up to sell power under open access. Certainly, it is a
much-less risky proposition for the investors as well. To summarize, the hybrid project configuration is indeed the cornerstone for enabling mass penetration of solar thermal energy in India in an economically effective way.
Q: Experts feel that hybridisation delivers multiple major benefits. Depending on the location and size, it is believed that Integrated Solar Combined Cycle (ISCC) plants can reduce LCOE immediately by up to 30 per cent through the joint use of equipment such as steam turbine and condenser. Does that hold good for India as well?
A: Logically, the ISCC approach which involves providing solar thermal steam to the bottoming steam cycle of gas-based power plants does make a whole lot of sense. However, the
gas-availability situation is unique to every country and hence the viability of hybridizing solar thermal with gas needs detailed evaluation, since not all models can be easily translated from country to country. In India, given the gas situation evident in the recent past with gas allocation policy and its critical need for fertilizer plants, which in-turn are the backbone for the agricultural sector, a business case can be carved out for retrofitting existing gas plants. However, for a green field project, maybe there are more viable and feasible methods to hybridize solar thermal, such as with biomass. The jury is still out on whether gas is a clean fuel, given its inherent fossil nature while also carbon-free combustion.
Q: Is it true that bolting new technologies onto traditional technologies flattens an otherwise steep learning curve for technology providers, operators and financiers, which in turn enables quicker plant implementation?
A: Bolting-on technologies is what I was referring to as the “retrofit opportunity” that exists for solar thermal. This is particularly relevant in the secondary market or the non-electric energy market, including industrial process heating and cooking. This is where solar thermal can make a large dent in reducing India’s oil imports, since a solar thermal system can be seamlessly bolted on to the existing industrial heating system, thereby drastically reducing fossil consumption in industries. Also, here is a segment where solar thermal does not compete with PV or wind. To put the segment in perspective, the Integrated Energy Policy 2031-32 forecast indicates the share of oil and natural gas to be 683 million, primarily for cooking and heating needs, at an import bill of $600 billion ! A focused program which enables bolting on solar thermal onto existing heating/cooking etc. systems can mitigate balance of payment as well as energy security risk.
What is required is an eco-system that facilitates development of such non-electric projects, provides support to the entrepreneur and provides an enabling platform to achieve the above. For example, a non-profit organization such as Centre for Rural Energy and Water Access (CREWA) is doing an excellent job of this. It is a matter of pride that India is leading the way with such installations owing to forward-looking policies set by MNRE and focused organizations such as CREWA.
Q: Since the demand for electricity peaks in India during summers and CSP delivers its maximum output during these peak periods, will adding thermal storage capacity extend CSP’s operational range?
A: Storage is an interesting proposition that warrants a detailed feasibility. Firstly, it creates higher economical value in a regulatory framework that values dispatchability by providing Time of Day (TOD) and Time of Use (TOU)-type tariff structure to the developer. In a regulatory environment where TOD/TOU is not prevalent, storage has a different value proposition- economical and proven storage system scan potentially help make an otherwise unviable project, viable, however, it is not a practical solution if you’re seeking high PLFs throughout the year from your solar thermal plants. For instance, no viable storage technology lends itself to 2 to 3 month monsoons that exist pan-India. The critical driver for adopting storage is that it allows high utilization of power block infrastructure; but then it also requires a tremendously over-sized solar field in addition to cost and complexity of storage system itself. While there are metrics governing viability of storage, I personally believe that hybridization is a far superior alternative to enhance PLFs and maximize power block utilizations for a given project capacity, particularly for India.
Q: In terms of policy, what is it that the sector needs currently? What would help it steer ahead?
A: Four critical policy measures are required—Mass-scale hybridization, project sizing, promoting indigenous development capabilities and a sound approach towards R&D and demonstration projects. MNRE is gradually laying a strong focus on all of these.
a. Hybridization: Solar thermal and biomass, both being clean energy sources, have a natural synergy—a solar thermal–biomass hybrid reduces biomass requirements (or frees up biomass for alternate non-electricity uses) while also enhancing PLFs for what would otherwise be a standalone solar thermal plant. Imagine the positive impact that solar thermal can make in reviving stranded biomass projects that are classified as non-performing assets on bank balance sheets. Secondly, since energy produced by such hybrid plant is completely renewable, a REC or
REC-equivalent market-driven mechanism is required. And, this can be easily done with some thought to awarding the user for reducing his/her fossil requirement for industry. Lastly, both heat and power generated by solar thermal-biomass hybrids are renewable. So, a policy that puts beneficiaries adopting ‘heat or thermal energy’ on the same footing as ‘solar power’ is also the need of the hour. More than 20 per cent of our oil imports are diverted to generate heat in industries in India.
b. Project sizes: While conventional wisdom places 50 MW-type solar thermal energy projects as viable, it isn’t always the case. Such large projects are driven by viability of steam turbines at these sizes and possible economies of scale of solar field technologies such as parabolic trough. Also, there are a few financial reasons as well. However, such large projects are tremendously resource-intensive and their viability is specific to a country. India will benefit much more from a large volume of small-mid scale projects rather than a hand few of very large projects to achieve a given target capacity. Viable solar thermal biomass hybrid projects from 0.5-5 MW capacity is the need of the hour. Of course, this will require turbine technologies which are viable at such scales and concentrating technologies that do not fundamentally rely on large volumes for fundamental viability. Both these exist today globally and we as a company are focused in this particular direction.
c. Indigenous developments: I couldn’t lay much emphasis on the critical need for policy to advance indigenous development and manufacturing. Of course, there could be bankability issues with new breakthrough technological developments, but these should be nurtured towards adaption and adoption and not stamped “unbankable” .The good news is that MNRE is promoting such developments under R&D policy and other forward-looking policy frameworks which support demonstration projects.
d. Demonstration projects: Recently, MNRE came up a policy supporting demonstration projects and this will certainly lay the foundation of long-term success of sound solar thermal in India. An additional effective way to maximise the effectiveness of such a good policy measure is to limit demonstration project sizes up to say 5MW to allow larger participation and thereby provide an opportunity for new technological developments to prove bankability. Also, since these are demonstration projects, unlike balance of JNNSM project activity, an alternate to competitive bid may be explored.
Q: MNRE recently announced a separate CSP hybrid programme through which it will support the development of four hybrid pilot projects. In what way will it help the sector?
A: Absolutely. I believe I have spoken enough on the critical need to support hybridization under a focused policy initiative. MNRE has always been a very forward-looking government agency and I’m positive that their new programme will be a huge success and will benefit the nation.
Q: The second phase of India’s National Solar Mission (NSM) may include a reduced capacity allocation for CSP and the possible introduction of a new incentive scheme. Will this work in favour of CSP developers?
A: It is hard to comment without an understanding of the nuances of the new incentive scheme. However, MNRE is playing a pivotal role in advancing solar in India. We understand the dilemma- we’re all learning as we’re also executing. It is a tricky road and the Indian government has demonstrated strong commitment by launching JNNSM. The road ahead will be smoothened if off-grid, distributed, solar thermal, hybrid and small-mid scale demonstration projects are promoted very actively.
Q: A move to put off Phase II bidding for CSP projects under the JNNSM to 2014-2015 is currently being finalised by MNRE. What do you feel about this decision?
A: Conventional wisdom demands that a thorough investigation of performance of CSP projects installed in Phase I is required before snapping on further capacity in order to meet a capacity target set for future. CSP, unlike PV, is highly knowledge-based, multi-disciplinary,
engineering-heavy and the very fact that Indian operating conditions for CSP plants is quite different then say US and Spain, it requires the need for first establishing confidence in CSP projects in Phase I. Until then, the thrust should be heavily laid on promoting indigenous technologies through a myriad of research and development projects and pre-commercial projects, so that there is a wider technology palette comprising of Indian and foreign technologies to choose from for the next phase of JNNSM.
Q: At the recent climate change talks in Doha, both Saudi Arabia and Qatar reinforced their intentions to invest in large-scale CSP – which includes solar thermal and concentrated solar PV technologies. How will this help the sector? Also, how will it help manufacturers in India?
A: Large-scale projects probably fit the configuration of Saudi Arabia and Qatar’s energy basket. However, given the demographic distribution in India, I believe distributed generation facilities should be poised to form major contributors to our country’s cumulative energy production and consumption. Also, let us clearly understand that there are barely any solar thermal and CPV players in India and the space is dominated by foreign players. Hence, while such initiatives can help the sector by advancing bankability of such players and technologies they offer, India needs to ask: how does it benefit her? One potential way is for Indian manufacturing to contribute; however, the maturity curve is steep and the proposition of low-cost manufacturing needs evaluation, given alternate and more attractive manufacturing hubs emerging in the world surpassing competitiveness of Indian manufacturing. Hence, the only long-term way forward is to establish and develop the technological capability in India by shifting gears on all fronts (policy, finance, etc.) to enable transition from being a ‘technology-absorber’ market to a ‘technology-provider’ market. This is the only sustainable way for self-reliance for Indian energy requirements.
Q: The Government of India through the Department of Science and Technology and the US Department of Energy have committed $25 million each over a period of five years, while 30 companies from India and the US will give another $25 million. The thrust areas of research will be sustainable PVs, establishment of multi-scale CSP and solar energy integration. How will this help the sector?
A: Collaboration is an absolute essential for enabling technologies for sustainable development.
Co-operation is welcome from particularly from developed and mature players. The success of such a co-operation will hinge upon addressing issues that are local and critical for India’s sustainable development and inclusive growth trajectory. It is easy to get derailed and arrive at solutions which are ‘nice to have’, but do not serve local needs of our country. Hence, I am very hopeful and optimistic that such co-operative engagements between Indian stakeholders and developed countries will yield economically viable and effective solutions for addressing current challenges, such as multi-scale CSP and solar energy integration.