Solar will become the cheapest option to generate electricity
Pashupathy Gopalan, who is the head of Indian operations and President-Asia Pacific of SunEdison, talks to The Hindu on emerging solar landscape in India and opportunities.
SunEdison, U.S headquartered global solar energy services firm, has been very active in participating solar PV (photovoltaic) projects across states.
Pashupathy Gopalan, who is the head of Indian operations and President-Asia Pacific, talks to The Hindu on emerging solar landscape in India and opportunities. Excerpts:
Where is the Indian solar market heading?
Ever since the new government came into power, particularly in the last two months, there have been tremendous amount of preparatory work done to make solar a significant part of country’s energy needs. Indian power minister has an ambitious vision of building 100 GW of solar power by 2020 and that vision is exactly the same as what China has for solar industry by 2020. In solar, may be, we are 10 years behind China, but no country that has the same capacity, availability of labour and qualified workforce and a huge domestic market. India can only be perhaps second to China. We have to give him the credit for being so courageous and bold. So, not just talks, the new government at the Centre is doing some real work. International Energy Agency has also said that by 2050 the Number One source of electricity in the world will be solar.
Are all these solar capacity targets feasible?
Very much feasible. In fact, if there is one source of energy that can actually make an appreciable impact in a very short time frame, it is solar. Solar can really make a significant dent in India’s energy mix. What you require to install large scale of solar is land and evacuation infrastructure. That’s it. Technology is there. Other great thing is development of solar projects can be done in a matter of couple of months. Unlike nuclear, which takes 10 years, or thermal projects, which takes a few years, or even wind, which takes about two years and more, solar can be developed very quickly. It can also be constructed extremely quickly. So, you can envision 500 mw projects that can be done in six months’ time. So, planning large capacities in solar is very much feasible.
How should India drive its solar transformation for both economic and social benefits?
In my view, solar is going to become one of the lowest-cost forms of generating electricity, even cheaper than fossil fuel. In India, if you analyse the bids for power plants with imported coal, they are all in the range of Rs.5.50 to Rs.7/kWh. It is not cheaper than that. And, usually the thermal plants powered by imported coal have all kinds of relief for increase in price of coal and forex. Basically, there is some sort of indexation of international coal prices. So, the price can go up.
The most recent solar bids that have come in Karnataka are all in the range of Rs.6.50-7/kWh. So, solar is already in the ballpark of coal prices. Also, coal is polluting, takes many years to develop. Environment clearances are challenging. Fuel linkage is an issue, and domestic coal has been having all sorts of problems over the last few months.
Imported coal has the price variability. But, solar is clean. It can be developed in few months, and constructed in 6-12 months, no issue of fuel linkages, generates electricity during the day time, and no seasonality. So, when we compare all sources of energy – nuclear, wind, gas and coal- solar clearly is emerging as a darling.
Solar costs have also come down. Renewable sources have to play a big role in energy generation, and in that renewable space, solar is clearly emerging as a winner. This may be the year in India for the first time that solar may surpass wind in annual capacity addition.
What kind of an indigenisation plan is required to develop a strong domestic manufacturing?
I think it is a golden opportunity for India to create an industry in early days of that industry. It is really nice and welcoming to see the Prime Minister focusing on Make in India strategy. But fundamental idea should be to focus on the industries that can win, export and be competitive globally. If you look at the solar value chain, over 90 per cent of solar in the world is crystalline silicon, and thousands of companies do crystalline silicon. So, it is very hard for thin-film segment to compete with crystalline silicon as there is only handful of companies. You have the innovation happening through a handful of companies versus thousands of companies where engineers are going to work every day and are making progress. If India decides to scale in solar, it has to think about supporting the crystalline value chain. If you look at this value chain, it is just the module and cell that have been discussed for domestic content in India. But they are the much simpler parts of the value chain. A very little value is added domestically. It is really a soldering operation and the module making is very, very simple. India needs to think what can be the strategic focus area in the value chain. Polysilicon is the crude oil refining equivalent, and that needs to be done domestically. Once that is done, all the others will surround the ecosystem. Supply chain industry can easily come because it requires only a little investment. Today, there is probably 250,000 metric tonnes of polysilicon manufactured in the world. By 2020, it will double, but with new technology. Polysilicon takes billions of dollars of investments. It won’t happen unless the government works out a strategy with various polysilicon manufacturers.
How has been Sun Edison’s growth curve in India?
When we look back, we were a company that has received a lot of support from parent. Our global CEO Ahmed Chatila has been passionate about India and generally emerging markets. He always felt that solar will be big in developing countries because so much energy infrastructure is going to be required, and sooner or later, the costs are going to be at parity. As far as we are concerned, across several segments there is parity and solar can compete effectively today not in future. So, grid parity is achieved. With that background and vision, he supported us a lot, and we have been able to accomplish reasonably well in our first part of the journey in India. Now we have a new and vibrant India. The promises are big and expectations are even higher because things seem to be looking up significantly. We have begun our journey, but it is still a long way go to make any meaningful impact. We are just starting to scratch the surface when it comes to making an impact in India’s energy mix. We have signed a MoU with the Rajasthan government for developing 5000 MW over the next five years. We have won 150 MW projects in Karnataka. We are also awaiting results in few other states. When we do our job, we will bring capital also. Our goal is to be a participant in a meaningful way.
Solar mission is not only about large power plants, but also about smaller distributed generation. What are the opportunities and challenges in this segment?
In distributed generation, there are five segments. First, commercial roof-top is the leading segment and that is taking off as parity has been achieved in certain states like Tamil Nadu & Maharashtra. Solar Energy Corporation of India is doing a great job of promoting this. Second is industrial segment. It has large roof-tops that make sense. But industrial tariff is lower. So, it is more challenging to make economics work now. Third is the residential segment that is very impressive. It will grow like what happened in countries like Japan, the U.S., and Australia. But the challenge is the residential electricity, which is subsidised a bit already and is lower when compared to commercial and industrial. So, may be a couple of years from now, it can show good progress. In the mean time, the leading adopters will do off-grid residentials in conjunction with battery or inverter. Fourth segment is the irrigation pumping segment. In my view, it is one of the most fascinating and important segment and government should support it as it will transform India. If the government takes it seriously, it can convert the 30 million irrigation pumps into solar-powered ones. Thirty million pumps of 5 kw or 5HP will be 150 GW of power generation from solar. It is possible and can transform the lives of farmers.
Some state governments are supporting this. Fifth is the solar micro-grids. This will also have transformation effect, and the government is focusing on it. So, when you think of distributed generation, each of these five segments has to be dealt with separately with right policy and framework.
Source: The Hindu