INDIA SOLAR Indias national policy WEEKLY MARKET is betting big on UPDATE centralized solar power November 15th,

2013 Average project allocation sizes under Indias National Solar Mission (NSM) have been increasing ever since the mission started. The batch one of phase one allowed a single developer to take up a capacity of up to 5 MW. This was increased to 50 MW in the second round. In the first round of phase two, it has been increased to 100 MW. With this, the direction of the national policy is clear. It is moving towards ever larger projects. Now, the Ministry of New and Renewable Energy (MNRE) has taken it a step further by announcing ultra-mega solar power projects. These are envisaged to be gigawatt scale projects. The first of its kind is the 4 GW project that has been allocated to a joint venture of six government owned companies (refer). Bharat Heavy Electricals Limited (BHEL), one of the project

eggs in one basket, i.e., centralized solar. From the ministrys perspective, the key objective of doing this is to bring down costs and ensure a hassle free meeting of targets. However, all these decisions are being made by the ministry even when the debate about centralized solar vs. decentralized solar, as the way to go for India, has not even begun. Centralized solar offers economies of scale and helps bring down costs on the generation side. However, this power needs to be transmitted to the consumption end and the losses in between can be as high as 20%. Moreover, in the centralized framework, solar power is competing with the cost of power generated from other sources of power such as thermal, wind and nuclear. Also, under the centralized model, new transmission infrastructure in the form of green corridors needs to be set up. On the other hand, solar power, unlike most other

proponents, is expected to announce EPC bids for the first 1 GW capacity by March 2014.

sources of power, can be generated directly on the consumption end. Under this framework, there is no need to set up new According to media reports transmission infrastructure (refer), the MNRE may be and there are no planning to set up five transmission losses. The ultra-mega renewable drawbacks of decentralized power plants which will generation include higher add up to a capacity of 18 cost of generation due to GW over the next 10 the lack of scale and new years. However, it is investments in making the important to note that distribution of power these are renewable parks smarter at the last mile. and not solar parks . Within the decentralized Hence, this would not framework, economies of increase Indias solar scale can be created if the capacity by nine-fold as market size increases and claimed in the report. investments in making the grid smarter can also help According to BRIDGE TO make distribution of INDIA, the MNRE will stick conventional power more to its target of allocating efficient. 2.52 GW of solar PV capacity by 2017 (refer). As a country, until we have The only shift that can be a clear answer as to envisaged is that the 1.08 whether centralized GW of solar thermal generation is better than capacity will also be decentralized generation or diverted to solar PV. This vice-versa; it might not be means that a maximum of very wise for us to choose a 3.6 GW can be allocated to side. solar PV by 2017. Considering that 750 MW According to BRIDGE TO is already being allocated INDIA, creating an under batch one of phase ecosystem which will help one of the NSM and 1,000 solar to stand on its own MW is being allocated to feet in the future is more the first ultra-mega important that just meeting project, only 1,850 MW the target numbers set will be left to be allocated under the policy document. until 2017. Most likely, up to four projects with a

capacity of around 500 MW each will be allocated in 2014 to meet the current five year plan (2012-2017) targets. Apart from this 3.6 GW capacity, any predictions for allocations beyond 2017 cannot be made as of today as they will be guided by a new policy document for phase three of the NSM. With very little emphasis on decentralized solar under the central government policy, it seems like India has put all its

THROUGH OUR LINKEDIN GROUP 'INDIA SOLAR FUTURE' Which fair is better for solar in your view: Intersolar, Mumbai or RE Expo, New Delhi?