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Despite there being more than 10 different Solar CSP technology combinations in the market now, and more than 400MW installed capacity
worldwide, India’s role in the CSP sector has been comparitively reticent – However, latest government incentives are set to reverse that trend. Writing for CSP Today, Giles Parkinson  notes that the international arena’s biggest CSP heavyweights are making a beeline for India, which boasts the most ambitious solar energy development plan in the world. A simple set of numbers illustrate the enormous potential of solar energy: its current capacity is 5MW, and its target for 2022 is 20,000MW.

Attractive FDI opportunity

John Woolard, the CEO of California-based BrightSource Energy, was in India recently, to negotiate with potential local JV partners. He said: “India is one of only a handful of countries where there is good sun and rapid growth in demand for electricity,” says Brightsource spokesman Andrew Dyer.

India has been one of the first international stops for California-based group e-Solar, which has signed an agreement with local construction group ACME for the development of 1GW of solar thermal capacity over the next 10 years.

Their first 2.5MW plant is under construction in Rajasthan and the installation of a 46MW plant is likely to begin in 2010 for completion in 2011. “Conditions in India are very encouraging to do a lot more,” says Raed Sherif, e-Solar vice president of international development.

Sherif says it is impossible to predict at this stage how the market share of CSP and solar PV will be split. “But let’s say for arguments’ sake that it goes 50-50, then we think we can get 30-40 percent of that 10GW market share.”

Australia’s Wizard Power, an Adelaide-based solar dish technology developer, is also looking at a number of opportunities in India, according to its head of business development, Artur Zawadski. One is a series of seven projects comprising six 50Mw plants and one 25MW plant to supply water to a new major agricultural region near Puna. Zawadski says the company is attracted by 100 percent depreciation in the first year on large solar plants. Other incentives created by the Indian government include the removal of customs and excise duty on the import of capital equipment, the training of 1000 engineers, and the creation of a venture capital fund.

Elsewhere, Singapore based Delta Power has tied up with local engineering and construction group Punj Lloyd; Germany’s Solar Millennium has struck an agreement with Indian energy group Suryachakra Power; and US-based Abengoa Solar has signed a “strategic tie up” with Maharishi Solar Technology, although this will likely focus on industrial applications.

Domestic market gearing-up

Local utilities are also planning CSP projects. India’s largest utility, National Thermal Power Corp, has announced plans to install two 50MW solar thermal plants in Gujarat and could extend this to 300MW. It is also building 5MW and 1MW installations on the Andaman and Nicobar islands.

Pune Gadhia Solar, an OEM, has announced plans for a 100 MW plant in Kutch, Gujarat and is in discussions with the Maharashtra state government to install 1.0 – 1.5 MW CSP systems, to extend power to rural areas.

The barriers include space (particularly in populated areas) and manufacturing capability, along with transmission issues.  But Shirish Garud of the Energy and Resources Institute in New Delhi downplays such issues, and thinks that the major challenge will be in mobilizing the financing for CSP.

Arun Srivastava, a New Delhi-based executive director at Ernst & Young, says viability of CSP plants in India will depend on factors such as technological innovation, the scale of operation and the cost of conventional energy. But he adds that renewable energy obligations and other national and regional government measures are required to accelerate CSP deployment. “The NSM is viewed as a step to provide the right signal on the market size in the country to project developers and technology providers,” he says.

At this stage, it is too early to say whether there will be a technology preference in the race to achieve India’s Solar Mission. “Since both the technologies for solar power generation – PV and Solar Thermal  – are new to this country, the policy makers are not too certain at this stage on the relative merits of these technologies and their respective commercial sustainability for the developer as well as the power procurer – The Government program is essentially technology neutral at this stage.