Solar tenders, auctions slowing down in India: Report

While solar installations in India have picked up speed, tenders and auctions have been slowing down over the past couple of quarters, according to a Mercom Capital report. About 1.9 GW of solar power was tendered in Q1 2017 (1 GW of this was a retender) compared to 3.4 GW in Q4 last year. There was 1.3 GW of solar projects auctioned in Q1 2017 compared to 255 MW in Q4 2016. The slowdown in activity has been disconcerting to developers and manufacturers who have been gearing up for more activity based on India’s solar installation goal of 100 GW by 2022.

As per the target set by the government, India needs to instal 18 GW of solar power every year till 2022. If the government wants to meet its solar installation goals, the pace of tenders and auctions must pick up quickly. Companies, who have invested hundreds of millions to expand to meet the demand and build projects, are anxiously waiting for the activity to pick up.

 

According to the report, “Some of the reasons for decline in tender and auction activity include poor financial condition of distribution companies (DISCOMs), transmission issues, weaker power demand and increases in captive generation by commercial and industrial companies. DISCOMs that are continuing to struggle financially are not taking on new generation that is more expensive than coal, which is leading to curtailment of solar and wind projects as well as payment delays to developers.”

The World Trade Organization (WTO) ruling against India’s domestic content requirement (DCR) has resulted in continuous cancellations and postponements of planned DCR tenders.

“In some states, weak power demand is removing the urgency to speed up the pace of solar tenders and auctions. Increases in captive generation by industrial customers have compounded the situation since they are requiring less power generation from DISCOMs,” the report adds.

The recent record low bid of Rs 3.30 (approximately $0.494)/kWh at the REWA solar park auction is playing a big role in the slowdown of auction activity as government agencies and states are stalling to renegotiate PPAs that are more expensive than the bids received at REWA.

For DISCOMs, coal is still the cheapest option available.  According to Mercom’s December Solar Quarterly Report, DISCOMs have resorted to sporadic curtailment from some solar projects in Rajasthan and Tamil Nadu because cheaper power is available on the power exchanges. Even when there is demand, several states have complained that the DISCOMs are resorting to power cuts instead of buying power on the exchanges to save on costs.

Several other developers told Mercom that as of now Bihar, Jharkhand, Tamil Nadu, Rajasthan and Maharashtra are the problem states. According to Mercom’s Solar Project Tracker, tendering activity has declined in these states with most of the old tenders being continually extended.

 

“We hope this is a short-term issue which, once resolved, will see tariffs get down to realistic levels and there will be a big spurt in activity. However, if some of these pressing issues are not resolved quickly, growth will stall,” said Raj Prabhu, CEO of Mercom Capital Group. “There needs to be a policy mechanism put in place to avoid the stop and start in tender activity every time there is an outlier in terms of a low bid. However, if states revise their tenders to include all of the positive aspects of the REWA tender, it can be a win-win for all,” he added.

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India plans Renewable Energy Management Centres for Green Corridors

Existing control centres, known as state load dispatch centres (SLDCs) currently lack renewable energy forecasting systems. Flickr: Tapas GaneshExisting control centres, known as state load dispatch centres (SLDCs) currently lack renewable energy forecasting systems. Flickr: Tapas Ganesh

As part of India’s Green Energy Corridor scheme, the Ministry of Power has proposed setting up a host of Renewable Energy Management Centres (REMCs) across the country to help integrate renewables as their penetration increases. The centres will cost around INR4.09 billion (US$63.5 million).

With a 160GW target of solar and wind by 2022, the ministry is concerned about grid stability and security. It noted that seven states will account for 104GW (65%) of this capacity including: Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, Madhya Pradesh, Gujarat and Rajasthan.

The newly proposed REMCs would therefore be separated into the Southern, Western and Northern regions across the seven major resource rich states and various projects of the Green Energy Corridor scheme.

Existing control centres, known as state load dispatch centres (SLDCs) currently lack renewable energy forecasting systems, scheduling, monitoring and reserve management abilities.

To alleviate this problem, India aims to emulate state-of-the-art renewables forecasting and monitoring systems already successfully operating in countries like Spain, Germany, US, Denmark, Belgium and Australia.

The REMCs’ functions include:

  • Forecast renewable energy generation at state and regional levels
  • Schedule renewable generation with real time tracking and SCADA systems
  • Coordinate with the relevant load dispatch centre

Power Grid Corporation of India Limited (PGCIL) has already worked on similar control centre projects and has therefore been assigned the implementation role. On completion, PGCIL will hand the REMCs over to the states.

The projects are to be implemented within 15 months of award and commissioned progressively through 2018/19.

PGCIL recently entered in to a loan agreement of up to US$500 million with the Asian Development Bank (ADB) partly for one of its Green Energy Corridor projects.

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PM Narendra Modi may step in to resolve wrangling on NITI Aayog’s proposed National Energy Policy

ঘোষণা নীতি আয়োগ-এর

NEW DELHI: Prime Minister Narendra Modi is likely to intervene to resolve an inter-ministerial wrangling over NITI Aayog‘s proposed National Energy Policy to roll out the long-overdue power sector reforms.

Different stakeholder ministries, including those of power, coal, and new and renewable energy, have failed to come to a consensus on some points of the proposed policies, including freeing coal from price control, despite several rounds of consultations, said a senior government official who is aware of the deliberations on the matter.

“National Energy Policy is pending with PMO (prime minister’s office),” the official told ET. “The top office is now planning to convene a high-level meeting of all concerned ministers and secretaries to be chaired by the PM himself to suggest way forward to the policy,” the official said.

The first draft of the policy, framed by the Aayog after intense consultations over last one and a half year, was ready for seeking public comments by March. But that has been held back after concerned ministries raised objections with the PMO over certain proposals.

PM Narendra Modi may step in to resolve wrangling on NITI Aayog's proposed National Energy Policy



Coal ministry, for example, expressed reservations over the proposal to free up the commodity from any price control. Such a move would divest the ministry of its power to control coal prices and help maximise profit for Coal India.

However, NITI Aayog has largely stood by its reforms agenda. National Energy Policy has proposed comprehensive reforms to free sectors such as coal, electricity and fertilisers from subsidies and price controls, helping to produce more power by making electricity generation projects commercially viable for private companies.

The policy has outlined the need and measures to improve financial condition of power distribution companies (discoms), which are bogged down by debt, to make the sector profitable in the medium to long term.

Key suggestions being considered include overhauling the entire structural and functional capacity of discoms so that they operate more professionally.

In India, electricity and fertiliser sectors are heavily subsidised. The government feels there is a need to bring down subsides in such sectors and, hence, a clear roadmap for lowering subsidies and aligning their prices to that of the market has been laid out.

But this proposal hasn’t gone down well with concerned ministries.

National Energy Policy is aimed at curbing imports by increasing production of renewable energy in the country fivefold to 300 billion units by 2019 and tripling coal production to 1.5 billion tonnes. Coal imports are envisaged to come down by 10% by 2022 and by 50% by 2030.

NITI Aayog CEO Amitabh Kant had earlier told ET that differences are obvious as the policy proposes far reaching reforms to transform the power sector. “Wherever there are differences, we’ll pose them before the Prime Minister and let him take a call,” he had said earlier. Prime Minister is the chairman of the Aayog.

National Energy Policy will replace Integrated Energy Policy of the UPA regime that envisioned a roadmap for sustainable growth with energy security over a reasonable period of time.

Is solar sector truly achieving grid parity?

Amplus Energy Solutions won projects across ten states in the bids conducted by Solar Energy Corporation of India (SECI) for rooftop solar power. The tariff offered for projects in Uttarakhand, Himachal Pradesh, Puducherry and Chandigarh was the lowest in history—Rs 3 per unit of electricity. And in six other states, tariff rates between Rs 5 and 6 per unit were offered.

The bidding comes at a point where grid parity of renewable energy is being hailed as a turning point of electricity scenario in India. Grid parity is a situation when generating electricity from alternative sources of energy like renewables costs more or less the same as conventional sources.

This means renewable energy sources can generate electricity at the rate similar or equal to thermal power generation. Unfortunately, the Rs 3-per-unit-tariff is certainly not a step in that direction. The price can be achieved because the government is offering subsidies worth 70 percent of the capital cost, ranging from Rs 38,500 to Rs 52,500 in the capital expenditure model.

There is a direct infusion of subsidy for every kilowatt (kW) in the rooftop solar sector. But even the solar sector, in general, has witnessed tariff rates fall to an all time low. This is because of reverse bidding rather aggressive reverse bidding in central and state solar project auctions that has yielded tariff offer of around Rs 4.34 per unit in January by Fortum Finnsurya Energy, a Finland-based company operating out of Rajasthan.

It was beaten less than a month ago by tenders worth 750 MW of solar at Bhadla Solar Park in Rajasthan which benchmarked by the tariff at Rs 3.93 per unit of power generation. Again, this low benchmark cost is for a 750 MW that would receive viability gap funding (VGF) of 30 per cent. VGF is a capital subsidy to bridge the gap between the project cost dictated by the prevailing electricity rate and the price quoted by a developer. Can we deem this achievement as grid parity when the realisation of a low tariff is under the capital subsidy provided by the government when most of these projects have not seen a financial closure because banks do not consider these projects financially viable?

Not just direct capital subsidy

Apart from the capital subsidy for rooftop and VGF for larger solar projects, the government offers a tax benefit called accelerated depreciation (AD) to all the projects that are not entitled to a direct capital subsidy. AD is the depreciation of fixed assets at a fast rate early in their useful lives. This AD is tax rebate that the project enjoys for the first few years of operation.

This form of incentive is provided by the government to increase investment in any particular sector. One of the primary reasons for the development of wind sector in India is AD. Seventy percent of the 28,279.40 MW installed wind power is based on AD. The impact of AD was felt when the government discontinued the rebate in 2012, and the entire sector saw stagnation. By intense lobbying, it was reintroduced for the development of wind sector, and now the capacity installed has bounced back.

Subsidised grid parity versus unsubsidised grid parity

India has set a target to achieve 175 gigawatts (GW) renewable energy capacity by 2022. Out of this, 100 GW has been allocated to solar and 60 GW to wind. This ambition was raised in July 2015 when India announced its Intended Nationally Determined Contributions to United Nations to show the strides it is willing to make to reduce carbon emissions. To meet these targets and for the development of and to attract investment in wind and solar sectors in India, there have been various forms of subsidies and tax incentives available.

The question is with subsidies and other incentives involved, can the achievement of low tariffs be termed as achieving grid parity? Should India wait for a little for the sector to be deemed competitive when thermal power produces cheaper electricity without the backing up of subsidies? When banks do not consider most of these projects economically viable to fund, and they haven’t generated and supplied electricity at this rate, how can this be an achievement for the sector?

However, India still has 237 million people who do not have access to electricity. We need to provide these people with reliable and affordable power as soon as possible. And if we have decided that renewable energy is the future of electricity, then we need to accept that today renewable energy is a little more expensive than thermal power without subsidies. We have to pay more for this clean energy and people with better paying capacity would have to share a bigger portion of this burden.

 

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The colossal African solar farm that could power Europe

The minibus crosses the vast plateau on a newly paved road. Cracked fields stretch away towards the Moroccan desert to the south. Yet the barren landscape is no longer quite as desolate as it once was. This year it became home to one of the world’s biggest solar power plants.

Hundreds of curved mirrors, each as big as a bus, are ranked in rows covering 1,400,000 sq m (15m sq ft) of desert, an area the size of 200 football fields. The massive complex sits on a sun-blasted site at the foot of the High Atlas mountains, 10km (6 miles) from Ouarzazate – a city nicknamed the door to the desert. With around 330 days of sunshine a year, it’s an ideal location.

As well as meeting domestic needs, Morocco hopes one day to export solar energy to Europe. This is a plant that could help define Africa’s – and the world’s – energy future.

(Credit: Getty Images)

Hundreds of curved mirrors, each as big as a bus, are ranked in rows covering 1,400,000 square metres of desert, an area the size of 200 football fields (Credit: Getty Images)

Of course, on the day I visit the sky is covered in clouds. “No electricity will be produced today,“ says Rachid Bayed at the Moroccan Agency for Solar Energy (Masen), which is responsible for implementing the flagship project.

An occasional off day is not a concern, however. After many years of false starts, solar power is coming of age as countries in the sun finally embrace their most abundant source of clean energy. The Moroccan site is one of several across Africa and similar plants are being built in the Middle East – in Jordan, Dubai and Saudi Arabia. The falling cost of solar power has made it a viable alternative to oil even in the most oil-rich parts of the world.

As well as meeting domestic needs, Morocco hopes one day to export solar energy to Europe.

Noor 1, the first phase of the Moroccan plant, has already surpassed expectations in terms of the amount of energy it has produced. It is an encouraging result in line with Morocco’s goal to reduce its fossil fuel bill by focusing on renewables while still meeting growing energy needs that are increasing by about 7% per year. Morocco’s stable government and economy has helped it secure funding: the European Union contributed 60% of the cost for the Ouarzazate project, for example.

(Credit: Sandrine Ceurstemont)

With around 330 days of sunshine a year, the region around Ouarzazate – a city nicknamed the door to the desert – is an ideal location (Credit: Sandrine Ceurstemont)

The country plans to generate 14% of its energy from solar by 2020 and by adding other renewable sources like wind and water into the mix, it is aiming to produce 52% of its own energy by 2030. This puts Morocco more or less in line with countries like the UK, which wants to generate 30% of its electricity from renewables by the end of the decade, and the US, where President Obama set a target of 20% by 2030. (Trump has threatened to dump renewables, but his actions may not have a huge impact. Many policies are controlled by individual states and big companies have already started to switch to cleaner and cheaper alternatives.)

Due to the lack sun on the day I visit, the hundreds of mirrors stand still and silent. The team keeps a close eye on weather forecasts to predict output for the following day, allowing other sources of energy to take over when it is overcast.

The reflectors can be heard as they move together to follow the sun like a giant field of sunflowers

But normally the reflectors can be heard as they move together to follow the Sun like a giant field of sunflowers. The mirrors focus the Sun’s energy onto a synthetic oil that flows through a network of pipes. Reaching temperatures up to 350C (662F), the hot oil is used to produce high-pressure water vapour that drives a turbine-powered generator. “It’s the same classic process used with fossil fuels, except that we are using the Sun’s heat as the source,” says Bayed.

The plant keeps generating energy after sunset, when electricity demands peak. Some of the day’s energy is stored in reservoirs of superhot molten salts made of sodium and potassium nitrates, which keeps production going for up to three hours. In the next phase of the plant, production will continue for up to eight hours after sunset.

(Credit: Sandrine Ceurstemont)

Once fully operational, the solar plant will only require about 50 to 100 employees (Credit: Sandrine Ceurstemont)

As well as boosting Morocco’s power production, the Ouarzazate project is helping the local economy. Around 2,000 workers were hired during the initial two years of construction, many of them Moroccan. Roads built to provide access to the plant have also connected nearby villages, helping children get to school. Water brought in for the site has been piped beyond the complex, hooking up 33 villages to the water grid.

Water brought in for the site has been piped beyond the complex, hooking up 33 villages to the water grid

Masen has also helped farmers in the area by teaching them sustainable practices. Heading towards the mountains, I visit the Berber village of Asseghmou, 30 miles (48 kilometres) north of Ouarzazate, where a small farm has now changed the way it raises ewes. Most farmers here rely on their intuition alone but they are being introduced to more reliable techniques -such as simply separating animals in their pens – which are improving yields. Masen also provided 25 farms with sheep for breeding purposes. “I now have better food security,” says Chaoui, who runs a local farm. And his almond tree is thriving thanks to cultivation tips.

Even so, some locals have concerns. Abdellatif, who lives in the city of Zagora about 75 miles (120 kilometres) further south, where there are high rates of unemployment, thinks that the plant should focus on creating permanent jobs. He has friends who were hired to work there but they were only on contract for a few months. Once fully operational, the station will only require about 50 to 100 employees so the job boom may end. “The components of the plant are manufactured abroad but it would be better to produce them locally to generate ongoing work for residents,” he says.

(Credit: Sandrine Ceurstemont)

The solar plant draws a massive amount of water from the local El Mansour Eddahbi dam. Water scarcity has been a problem in the semi-desert region (Credit: Sandrine Ceurstemont)

A bigger issue is that the solar plant draws a massive amount of water for cleaning and cooling from the local El Mansour Eddahbi dam. In recent years, water scarcity has been a problem in the semi-desert region and there are water cuts. Agricultural land further south in the Draa valley depends on water from the dam, which is occasionally released into the otherwise-dry river. But Mustapha Sellam, the site manager, claims that the water used by the complex amounts to 0.5% of the dam’s supply, which is negligible compared to its capacity.

Still, the plant’s consumption is enough to make a difference to struggling farmers. So the plant is making improvements to reduce the amount of water it uses. Instead of relying on water to clean the mirrors, pressurised air is used. And whereas Noor 1 uses water to cool the steam produced by the generators, so that it can be turned back into water and reused to produce more electricity, a dry cooling system that uses air will be installed.

The success of plants in places like Morocco and South Africa will encourage other African countries to turn to solar power

These new sections of the plant are currently being built. Noor 2 will be similar to the first phase, but Noor 3 will experiment with a different design. Instead of ranks of mirrors it will capture and store the Sun’s energy with a single large tower, which is thought to be more efficient.

Seven thousand flat mirrors surrounding the tower will all track and reflect the sun’s rays towards a receiver at the top, requiring much less space than existing arrangement of mirrors. Molten salts filling the interior of the tower will capture and store heat directly, doing away with the need for hot oil.

Similar systems are already used in South Africa, Spain and a few sites in the US, such as California’s Mojave desert and Nevada. But at 86ft (26m) tall, Ouarzazate’s recently erected structure is the highest of its kind in the world.

(Credit: Getty Images)

Africa’s sunshine could eventually make the continent a supplier of energy to the rest of the world (Credit: Getty Images)

Other plants in Morocco are already underway. Next year construction will begin at two sites in the south-west, near Laayoune and Boujdour, with plants near Tata and Midelt to follow.

The success of these plants in Morocco – and those in South Africa – may encourage other African countries to turn to solar power. South Africa is already one of the world’s top 10 producers of solar power and Rwanda is home to east Africa’s first solar plant, which opened in 2014. Large plants are being planned for Ghana and Uganda.

Africa’s sunshine could eventually make the continent a supplier of energy to the rest of the world. Sellam has high hopes for Noor. “Our main goal is to become energy-independent but if one day we are producing a surplus we could supply other countries too,” he says. Imagine recharging your electric car in Berlin with electricity produced in Morocco.

With the clouds set to lift in Ouarzazate, Africa is busy planning for a sunny day.

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How clean is solar power?

A new paper may have the answer

THAT solar panels do not emit greenhouse gases such as carbon dioxide when they are generating electricity is without question. This is why they are beloved of many who worry about the climate-altering potential of such gases. Sceptics, though, observe that a lot of energy is needed to make a solar panel in the first place. In particular, melting and purifying the silicon that these panels employ to capture and transduce sunlight needs a lot of heat. Silicon’s melting point, 1,414°C, is only 124°C less than that of iron.

Silicon is melted in electric furnaces and, at the moment, most electricity is produced by burning fossil fuels. That does emit carbon dioxide. So, when a new solar panel is put to work it starts with a “carbon debt” that, from a greenhouse-gas-saving point of view, has to be paid back before that panel becomes part of the solution, rather than part of the problem. Observing this, some sceptics have gone so far as to suggest that if the motive for installing solar panels is environmental (which is often, though not always, the case), they are pretty-much useless.

Wilfried van Sark, of Utrecht University in the Netherlands, and his colleagues have therefore tried to put some numbers into the argument. As they report in Nature Communications, they have calculated the energy required to make all of the solar panels installed around the world between 1975 and 2015, and the carbon-dioxide emissions associated with producing that energy. They also looked at the energy these panels have produced since their installation and the corresponding amount of carbon dioxide they have prevented from being spewed into the atmosphere. Others have done life-cycle assessments for solar power in the past. None, though, has accounted for the fact that the process of making the panels has become more efficient over the course of time. Dr Van Sark’s study factors this in.

Panel games

To estimate the number of solar panels installed around the world, Dr Van Sark and his team used data from the International Energy Agency, an autonomous intergovernmental body. They gleaned information on the amount of energy required to make panels from dozens of published studies. Exactly how much carbon dioxide was emitted during the manufacture of a panel will depend on where it was made, as well as when. How much emitted gas it has saved will depend on where it is installed. A panel made in China, for example, costs nearly double the greenhouse-gas emissions of one made in Europe. That is because China relies more on fossil fuels for generating power. Conversely, the environmental benefits of installing solar panels will be greater in China than in Europe, as the clean power they produce replaces electricity that would otherwise be generated largely by burning coal or gas.

Once the team accounted for all this, they found that solar panels made today are responsible, on average, for around 20 grams of carbon dioxide per kilowatt-hour of energy they produce over their lifetime (estimated as 30 years, regardless of when a panel was manufactured). That is down from 400-500 grams in 1975. Likewise, the amount of time needed for a solar panel to produce as much energy as was involved in its creation has fallen from about 20 years to two years or less. As more panels are made, the manufacturing process becomes more efficient. The team found that for every doubling of the world’s solar capacity, the energy required to make a panel fell by around 12% and associated carbon-dioxide emissions by 17-24%.

The consequence of all this number-crunching is not as clear-cut as environmentalists might hope. Depending on the numbers fed into the model, global break-even could have come as early as 1997, or might still not have arrived. But if it has not, then under even the most pessimistic assumptions possible it will do so in 2018. After that, solar energy’s environmental credentials really will be spotless.

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NTPC awards the contract for Asia’s first integrated solar thermal power plant: Thermax and FRENELL to execute the project

NTPC awards the contract for Asia’s first integrated solar thermal power plant: Thermax and FRENELL to execute the project

Thermax, an Indian energy and environment company and FRENELL, a German concentrated solar power company, (through its wholly owned subsidiary Novatec Solar Espana, S.L) have been awarded by India’s state owned utility NTPC, to execute Asia’s first integrated solar thermal power plant at Dadri in Uttar Pradesh, India. The project involves the integration of a concentrated solar field into the Dadri coal fired power station. The ground breaking ceremony was celebrated on Friday, 4th of November 2016. The completion of the project is scheduled for September 2017.

The solar field will use FRENELL’s proprietary concentrated solar power (CSP) technology which is based on flat mirror Fresnel collector principle. On a surface of 33,000m2, the solar field will feed annually 14 gigawatt hours of solar thermal energy into the water-steam cycle of a 210 MW unit of the power station. The mirrors concentrate the sunlight on absorber tubes and heat the fluid up to 250°C which are the parameters required for the power station unit. The heat generated from the solar field will heat the feed water supplied to the steam generator, allowing for lower coal consumption and thereby reducing the emission of greenhouse gases.

In a competitive tender process among three international EPC companies, the Fresnel technology won out over parabolic trough and solar tower technology and the contract has been awarded to the consortium of Thermax and FRENELL. Thermax will be acting as the EPC contractor to NTPC and is responsible for design, engineering, procurement and supply of the entire solar thermal plant and balance- of- plant equipment as well as for the integration of the solar field into the coal fired power station. FRENELL will deliver its CSP technology as subcontractor and will execute the turnkey manufacturing and construction of the solar field.

“This project is of high strategic importance for India as it introduces a new option for power generating companies to improve the efficiency of their coal fired power stations. This solution will also contribute to the national target of at least 3% solar share of total power generation by 2022,” says M.S. Unnikrishnan, CEO of Thermax. “Compared to green field CSP plants, this is a cost efficient application as the existing thermal power station infrastructure can be used. The total market potential of this solution in India is estimated to be 1,700 MW and Thermax is prepared to continue the lead in offering such integrated solutions,” he adds.

“We are very proud to have been selected by NTPC to deliver our CSP technology to this flagship project,” says Martin Selig, CEO of FRENELL. “We share Thermax’s view that there is a significant market potential for CSP brown field solutions in India. In order to further increase our cost advantage over competitors in future CSP tenders, we are planning to localize our solar field component manufacturing and supply chain in India. The required temperature for this project is 250°C. Our solar field is designed for up to 550°C. We are keen to show case in future projects our high temperature solution which is also capable to store high temperature energy for solar power generation during night time,” he adds.

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India Wavers on Emissions as Power Plants Balk at Price Tag

India may ease a deadline to cut pollution from coal-fired power plants blamed for causing the world’s worst air quality amid pressure from generators who say it’s too difficult to implement the $37 billion reforms.

The deadline to meet all the new standards may be pushed back beyond the original December 2017 target, said S.D. Dubey, chairman of the Central Electricity Authority and head of the panel drafting the road map for power producers to meet the new guidelines. Prime Minister Narendra Modi’s government proposed the limits on toxic emissions in December 2015.

The delay highlights the challenge facing Modi’s administration to provide cleaner air alongside affordable and reliable power to all of the country’s 1.3 billion people. Limiting emissions would take longer than the government’s original two-year deadline and cost as much as 2.5 trillion rupees ($37.4 billion), the Association of Power Producers, a lobby group of non-state generators, said in March.

The new goals may be implemented “in a phased manner,” Dubey said in a phone interview. “Particulate matter emissions should be addressed in the first phase. The next step would be sulfur dioxide emissions and later on oxides of nitrogen. That’s the direction we are moving in.”

The office of Federal Environment Secretary A.N. Jha, whose ministry originally proposed the standards, didn’t respond to e-mails seeking comment.

India’s 187 gigawatts of coal-fired power capacity, which generate more than 75 percent of the nation’s electricity, contribute to the air pollution that makes India home to what the World Health Organization has determined are 11 of the top 20 cities on the planet with the worst air quality. The plants account for 61 percent of its generation capacity, according to the Central Electricity Authority.

India must first establish monitoring systems at all plants to establish an emissions baseline, determine what technologies will be appropriate and then install them at the plants, said Leslie Sloss, an analyst with the IEA Clean Coal Centre, a technology cooperation program of the Paris-based International Energy Agency.

“The time frame for the new norms is extremely challenging and probably not possible in practice,” Sloss said. “The new norms equate to India complying with emissions standards within a few years that Western economies have worked up to over decades. ”

Coal-fired power plants contribute to the release of about 60 percent of India’s industrial particulate matter, as much as half of the sulfur dioxide and 30 percent of oxides of nitrogen, the New Delhi-based Centre for Science and Environment said in a report in December, weeks after the new standards were announced.

“The emission norms require capital expenditure, which will lead to an increase in tariffs and burden the already weak financials of state power retailers,” said Sachin Mehta, an analyst at Mumbai-based Centrum Broking Ltd. “The plan is fraught with challenges. It is impossible to meet the current deadline.”

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Renewables could lose European power grid priority, documents reveal

Industry concern after confidential impact assessment models scenarios for paring back the ‘priority dispatch’ system for clean energy

The sun reflects off a solar collector assembly at the Andasol solar power station, southern Spain. Retroactive changes to funding rules have caused disputes and cutbacks in several countries, notably Spain.

 The sun reflects off a solar collector assembly at the Andasol solar power station, southern Spain. Retroactive changes to funding rules have caused disputes and cutbacks in several countries, notably Spain. Photograph: Marcelo Del Pozo/Reuters

Paring back the “priority dispatch” system could increase carbon emissions by up to 10%, according to a confidential EU impact assessment seen by the Guardian. But the document goes on to model four scenarios for doing just that, in a bid to make Europe’s energy generators more flexible and cost-competitive.

Some industry sources have told the Guardian they are alarmed and think it highly likely that priority dispatch for clean energy will be scrapped from the EU’s renewable energy directive, which is currently being redrafted for the post-2020 period.

Oliver Joy, a spokesman for the WindEurope trade association, said: “Removing priority dispatch for renewable energies would be detrimental to the wind sector, which would face more curtailment across the continent. It also seems to be at odds with Europe’s plans to decarbonise and increase renewables penetration over the next decade.”

“Investors took priority dispatch into account when projecting revenues in the original investment decisions, and it could have a bearing on existing projects if they are not protected from the change.”

The issue of retroactive changes to funding rules for renewables in Europe has been a cause for disputes and cutbacks in the wind and solar sectors of several countries, notably Spain.

Senior industry sources say they will push for financial compensation and access to balancing markets to help prevent a significant industry contraction, if priority dispatch is ended.

“We have had enough instability and retroactivity in Europe and going forward, the difference between existing and future assets should be well distinguished,” said one industry source.

“I would be extremely worried if they just removed priority of dispatch and did not touch other key issues around market design. It would mean that the commission was taking measures against the same renewable industries that they defend in public.”

Fossil fuel power providers argue that renewables have the lowest operating costs and so would anyway receive priority access to the grid network.

They also say that taking the clean energy sector out of priority dispatch would prevent “negative prices” – where more energy is produced than can be sold – and eliminate anti-competitive subsidies.

The EU’s assessment views the abolishing of priority dispatch as a step towards the creation of a “level playing field” for energy generators.

But without such a system, renewable sources may be the most likely to be taken offline because of the relative ease of switching off a wind turbine compared to a coal or nuclear plant.

The energy source with the lowest marginal cost – almost always renewables – is usually the first in line to be shut down by power grid operators.

As things are, a Europe-wide trend towards ending financial support has constrained the forward march of renewables on the continent, and siphoned off investment to elsewhere in the world.

“Everyone is investing in renewables outside Europe right now,” said one industry source. “If you want to bring investors back you have to send very relevant signals.”

Removing wind and solar power from priority dispatch may be intended to help reform the capacity market system, which currently pays gas generators to remain idle. Ironically though, it could lead renewable generators to demand an extension of the same mechanism to their own sector.

“If priority dispatch is removed, then renewables must be given a fall-back option of access and renumeration in the balancing markets to help stabilise the system, or clear levels of compensation in the event that curtailment is necessary,” Joy said.

Priority dispatch is supposed to be mandatory under current EU rules, although the UK, Sweden and the Netherlands are among countries that do not comply.

The study says that “the biggest impacts on generation [from ending priority dispatch] would be observed in Denmark, Great Britain and Finland, where biomass holds a large share of generation capacity”.

But this would be felt more in terms of bioenergy’s “expensive” production costs than its carbon emissions reduction potential, which is disputed inside and outside the commission.

“The removal of priority dispatch for biomass would indeed, in the first instance, imply an increase in GHG [greenhouse gas] emissions,” the paper says.

The four scenarios for scaling back priority dispatch involve an increase in CO2 emissions of 45m-60m tonnes.

 

View original post on : https://www.theguardian.com/environment/2016/nov/01/renewables-could-lose-european-power-grid-priority-documents-reveal

Surplus power: An opportunity beckons

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Representational image (Photo: Getty Images)

India is witnessing a strange paradox. Providing electricity to ensure one light and a fan to the poor is in itself a big deal, and amidst tall government claims, many villages in the country are still not electrified or despite installation of electricity poles, remain powerless. Under these circumstances, the Central Electricity Authority, under the Ministry of Power, has come out with a report, according to which there will be 1.1 per cent surplus power in 2016-17.

Surplus or deficit power is seen in terms of power supply and demand throughout the year. If demand for power is greater than its supply, it would be considered deficit of power; where supply of power is more than its demand, it would be called a power surplus situation. In fact, this is the first time that we have surplus power, according to government statistics. The situation does give satisfaction, but it poses a problem as well. Due to surplus power, power plants are under stress because of lower demand and lower prices in view of competition. The important question is whether this challenge can be converted into an opportunity.

While analysing the reasons for surplus power, experts opine that demand for power is estimated from the people connected to the grid. However, a large number of people are still not connected to the grid. If we add the prospective demand from those deprived of electricity so far, then this surplus will vanish. As per international comparisons, India’s per capita consumption of electricity is among the lowest in the world. India’s per capita electricity demand is 1070 kilowatt hours, while the global average is 3026 kilowatt hours. Among BRICS nations, India is at the bottom in terms of per capita electricity consumption. Due to lower incomes, people have lower purchasing power and therefore they consume less electricity. However, electricity demand is on the rise year after year. In 2014-15, electricity demand increased by 6.6 per cent and in 2015-16 by 4.2 per cent. The government is making efforts to increase the capacity to generate more power, to facilitate availability of power for an increasing population. By August 2016, the total capacity was 306 Giga watts. Today total production of electricity is 1108 billion units from utilities and 166 billion units from captive power plants.

It is satisfactory that we have surplus power and there are few possibilities of power cuts. However, we still have 3.2 per cent power deficit during peak hours. The current government pats itself on the back for the surplus power. However, CEA has estimated that though we have surplus power in the southern and western parts of the country, there is still power deficit in the eastern and northern parts of the country.

Power deficit was a major problem in India till some time back. However, the situation of electricity surplus is no less challenging as electricity producing units will have to sell electricity at un-remunerative prices and therefore may incur huge losses. As a result, future capacity generation may get adversely affected if electricity generation becomes a loss-making business. The last three years have seen 77636 megawatts (MW) of installed capacity in power generation.  Due to the efforts of the present government, especially the Prime Minister, significant strides have been made in solar power and there is a great future for it in the country. Therefore, it is essential that we are able to maintain a balance between demand and supply of electricity in the country.

Even when faced with power surplus, we are still using a large amount of petroleum products for transportation and cooking. A huge amount of LPG is being imported for cooking. If we are able to produce enough electricity, would it not be appropriate to promote use of electric stoves. All over the world due to environmental hazards, people are turning towards electric vehicles. While going fast on solar power generation, the Prime Minister has set a target for reducing petroleum imports by at least 10 per cent. If we are able to achieve this target, the country will be saving at least US $10 billion to 12 billion. Today, India is the fourth largest oil importing country of the world. So, a reduction in imports may also cause further reduction in the prices of petroleum products globally. We may not only be moving towards energy security, the commitments made in the Paris Deal may also be achieved faster.

Due to power surplus and fast increasing electricity generating capacity, India has also started exporting electricity, though in small quantities. We are exporting electricity to Bangladesh, Nepal and Myanmar. Electricity exports to Sri Lanka are under process by laying a cable under sea. Therefore, we can say that in times to come, India may not only be self-sufficient in electricity, it may even be exporting electricity to neighbouring countries.

Riding on electricity surplus, by increasing the use of electricity in cooking and transport, we may not only be protecting our environment, even costs may come down. On the one hand we may be able to reduce our oil import bill, and on the other, earn valuable foreign exchange. However, for converting the challenge of surplus power into an opportunity, we will have to keep a close eye on the scenario, so that the targets of electricity generation are not hit due to lower prices of electricity.

Read more at http://www.thestatesman.com/news/opinion/surplus-power-an-opportunity-beckons/173494.html#mxhR8fglvMcjXCek.99