Telangana Home Minister Nayani Narasimha Reddy @ the conference
A solar conference with a focus on Telangana took place in Hyderabad on 7 Sep.
Organized by EcoSure Events, this was supported by the government of Telangana as well as a number of solar related entities in the region. From the government’s side, the Home Minister of Telangana Nayani Narasimha Reddy participated in the inaugural session. (see my post on the conference announcement here)
I represented Solar Mango for the event, and moderated some of the conference sessions.
Some of the interesting sessions at the conference included:
Key Trends in Growth & Challenges for Solar in Telangana, in which the following spoke:
- Srirama Raju of Winsol Pvt Ltd.
- Mantha Subramaniyam of UKM Solar
- Ajay Reddy of Premier Solar
- Vineet Mittal fo Navitas Solar
Infrastructure & Finance Challenges for Solar
- Girish Gelli of Mytrah Energy
- DV Sathya of Shri Shakti Alternative Energy
- Ajay Reddy of Premier Solar
- KS Ramesh fo KSR Financials
The final session, an interesting one, was on distributed solar, mainly on rooftop solar, and this panel comprised the following
- Solar consultant Pampapathy Anchala
- Vineet Mittal of Navitas Solar
- Venkat Tangirala of Wind Stream Technologies
- MR Srinivas of Akasam Consultants.
Overall, it was a focussed day with both strategic and operational insights on solar, with an emphasis on Telangana. The audience, while reasonable in size, ensured that the value was more than reasonable through their extensive participation in questions and discussions.
I am noting the inputs and insights gathered during the day under specific categories:
Some of the challenges highlighted were
- Getting a strong PPA is a challenge
- Getting debt is a challenge
- Getting financial closure is a challenge, especially for small and medium developers, as large guys are getting financial closure without too much trouble
- The tariffs for solar are getting too low to become unviable for most small and medium developers. Even at Rs 6.49/kWh project IRRs less than 12%, according to one financial expert who was a speaker
- Another constraint is whether vendors will be able to scale up to provide modules in time
- 20,000 liters required per day of water per MW for a solar PV farm
- While O&M for solar PV is not complicated, it nevertheless has some challenges
- Another interesting challenge pointed out was: Implementation not spread out evenly, but everyone will rush at the same time – for instance, if a large amount of structures are required at the same time instead of spread over a year, can manufacturers of structures meet the requirements in such a short time?
- One of the positives mentioned was that solar power is now considered close to being a mainstream power sector. The key turning point was the UPA govt’s aligning of the solar sector with the power sector, and thus initiating the early PPAs for solar power plants.
- The other positive pointed out was that, at current costs and prices, very soon the solar market can grow without the need for policies and incentives.
- Renewable energy corridors were recommended. To a certain extent, these are already being worked on in various states.
- It was pointed out that the current practice of reverse bidding for everyone in general is discouraging small bidders; it hence was recommended that govt should give separate bids for small players
- Another suggestion was to do away with pure reverse bidding and instead resort to a cost plus structure for tariff determination.
- Another useful recommendation was to encourage 3rd party sales with free open access. This will make a big difference indeed, in my opinion.
Stats and facts mentioned on Financing, during the conference
- 14% with commercial banks, could get it at 12.5% for PFC solar loans
- In most cases, banks insist on 100% collateral security
- For large Takes 4-6 months to raise a loan
- For large IPPs like Mytrah, the following are the terms they are able to get from banks
- Interest rates of 11-11.5% for their projects
- Loan payback is 15 years
- 8-9 years payback
- Banks still not comfortable with solar, they avoid products and opportunities unless there is structured packaging
- For international financing, today, hedging cost is 7%. It was suggested that measures should be taken in order to bring the 7% to a much lower number (though I am not sure what could be done, as this has to do with the overall country risk and the strength of the rupee).
The Solar IPP Explained
- Getting a client/PPA ==> Raising money ==> Securing land ==> Buying equipment ==> Installing equipment ==> Operating the power plants
- Large IPPs such as Mytrah work with channel partners for rooftops solar implementations
- When it comes to solar-diesel hybrids, max 30% of DG set and max 50% of the load should be the capacity of the solar system; for this system, the inverter needs to be smart
- There are some challenges on installation and cooling for slant roof and also concern on the cost of cleaning
Some Prominent Questions
- Q: If a person wants to start new in solar, how should he go about building his business?
- Well, not sure if there was a well defined answer for this question, but broadly what was received as an answer was that the person should carefully choose his product and target segment combo before investing.
- Q: There was a question/complaint that single phase AC pumps are not available
- Pampapathy, the solar consultant, agreed, but mentioned that single phase DC pumps were available
- In the context of solar pumps, Pampapathy also recommended the use of VFDs to make sure it runs the motor at variable speeds based on the amount of solar power available
- Q: A question was asked to Venkat of Wind Stream – What is the lifetime of the Solar Mill and what was the output per kW?
- He said the lifetime was the same for solar panels (25 years) and VAWTs (20 years). So, I guess the answer would be the lower of the two, or 20 years
- Output of the SolarMill – 3.5 units/kW/day
- Q: Then there was another interesting question: Do solar business opportunities belong only to large companies?
- While many experts on stage did agree that large scale solar farms presented opportunities only for large companies, some mentioned that there were significant opportunities available in the rooftop solar space (especially the non subsidy segment) and also sub-contracting space for EPCs for large scale solar farms
Other Interesting Insights
- A representative from Cargomen Logistics mentioned an interesting aspect to be considered before acquiring land, that is, to ensure road access to land is good for a variety of vehicles to move.
- It was also pointed out by some speakers that it was mainly the large companies that had been able to corner most of the allocations in the recent Telangana solar allocation
- Shapoorji 180 MW
- Suzlon 210 MW
- Mytrah 320 MW
- Skypower 200 MW
- Many speakers raised a point on the low tariff range that the Telangana allocation had resulted in: Rs 5.17-5.88/unit
- Mantha Subramanian of UKM Solar, who had interestingly shifted from the IT field to the solar industry, also mentioned that there might not be significant amount of independent EPC opportunities for the utility scale solar projects in Telangana, as most of the large developers would be doing the EPC themselves. Personally though, I feel that many of them, while retaining the overall EPC responsibility might sub-contract part of the work to smaller players.
Other sources where this event was discussed
- Sapna Gopal, an independent journalist covering Energy & Environment, and writing for media such as India Climate Dialogue and Eco Magazine, sent me the following writeup on the event. (Thank you, Sapna)
Report by Sapna Gopal: Plans to popularise solar in state
Intro: Optimising solar power is now a priority with the Telangana government, as it plans to set up a solar park, adopt it to light up villages and proposes to use it in the departments and police stations in the state
At the Eco Sure conference held in Hyderabad on Monday, the focus was on solar energy and its relevance in the current day scenario, given the fact that we are faced with an energy crisis and 300 million Indians in the country still have no access to electricity.
As T L Shankar, former energy advisor to the Planning Commission admitted, “Though in the early 70s, we never thought that solar will be a solution to our problem, but now we find that it is a solution for the entire energy issue.”
He cited the instance of Andhra Pradesh wherein around 7,000 homes in Anantapur district are now being lit by solar.
On the occasion, Nayani Narasimha Reddy, Home Minister, Telangana, spoke about a proposal to set up a solar park either at Mahabubnagar or Nizamabad. He added that following a memorandum which was submitted by organizers of the Eco Sure conference, he would make efforts to introduce solar power in all police stations and buildings of the home department. The minister also promised to take up the issue of adopting solar in all government buildings, with chief minister K Chandrashekar Rao.
Ashok Kumar B, president of the recently formed Telangana Solar Energy Association, said the challenge is of reaching the common man and creating more awareness. The fact that 4 to 5 villages in Mahabubnagar district have been lit up with solar energy, is encouraging, he added. Just like Karnataka, where use of solar water heaters has been made mandatory for households, a similar system should be in place for Telangana, Kumar suggested.
Some other experts, who were also present, stressed on the need for renewable energy and adopting solar. B Kalyan Chakravarthy, Director General, Environment Protection Training and Research Institute, (EPTRI), spoke of how the institute has been promoting renewable energy and trying to create more awareness. “Since energy efficiency is the need of the hour, there is a requirement for solar pumps, green buildings and to convert waste to energy.”
Mantha Subrahmaniyam – MD – UKM Solar, explained in ways that the sector has benefitted from the Jawaharlal Nehru National Solar Mission (JNNSM) and Generation Based Incentive (GBI). While states like Gujarat, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Andhra Pradesh and Bihar are adopting solar initiatives, the north-eastern states are now major users of the solar off grid. He mentioned how the trend has changed in solar and now, there are policies to support initiatives such as the off grid and rooftop programme.
On solar pumps, he said currently, they are driven by the government and subsidy, but instead, they should be market driven. “It is financing that is reducing the tariff bid and we need mechanized tools to reduce the cost.”
Also highlighted at the event was the SolarMill, a small-scale hybrid wind and solar energy device. It is the world’s first integrated hybrid technology, with a width of 2.8 feet and a length of 4.8 feet. This system has been installed in an engineering college in Pollachi and plans are on take it up in other parts of the country as well, according to Venkat Kumar Tangirala, president, India and South East Asia, Wind Stream Technologies. Incidentally, it was also awarded at the recently held energy efficiency summit organized by CII in Hyderabad.