Catching On

Renewables become an attractive option across industries

Until now, the Indian solar market has been driven by independent power producer-led utility-scale projects. The decline in solar equipment prices and increased competition have led to a significant reduction in the price of solar energy, which has fallen significantly over the past three years, from Rs 10-Rs 12 per unit to Rs 4.34 per unit in 2016.

At these levels, solar power is competitive with newly built thermal, hydro and nuclear power plants, although it still faces the issue of being available mainly when the sun shines. Nevertheless, these rates are encouraging consumers across all infrastructure sectors as well as industry verticals to bypass India’s unsatisfactory electricity grid and go solar directly.

A significant number of solar projects, largely rooftop, are coming up at metro rail and railway stations, airports, ports, petrol pumps, manufacturing units, office complexes, government buildings, as well as households. In fact, if one looks at the scale at which some of these consumers are implementing solar power systems, it becomes clear that they will be significant contributors in achieving the government’s target of 100 GW of solar power by 2022. It is, therefore, interesting to track the plans and initiatives of some of the key players in this space.

Airports go power-neutral

In August 2015, the Cochin International Airport went completely solar, with the commissioning of a 12 MW captive solar farm. The airport, which is the seventh busiest in India and handles more than 1,000 flights a week, started with a small pilot project, installing a solar energy plant with 400 panels (1.1 MW) on its rooftop in 2013. When the experiment succeeded, it decided to go all the way and become self-sufficient in meeting its energy needs through solar power.

In a press statement, the airport’s managing director, V.J. Kurian, stated that it was the massive power bills that prompted them to look at green solutions. The airport consumes nearly 48,000 units of power costing Rs 336,000 per day. Technically speaking, the airport has now become grid-neutral, as it feeds more power into the state grid than it consumes. The newly installed solar power plant can generate between 50,000 kWh and 60,000 kWh of electricity per day.

Now, Cochin airport is working to expand its solar power base to meet the increased demand from the bigger international terminal it is in the process of building. A new plant is expected to be ready soon. And the airport is planning to install a solar power system on an adjoining canal.

The idea appears to have caught on, with the civil aviation minister calling for more airports to go solar. To this end, the Airports Authority of India (AAI), which operates 125 airports across the country including the Cochin and Kolkata airports, has decided to build solar power plants at about 30 of its airports and has already signed an MoU with the Solar Energy Corporation of India (SECI) for this. AAI has plans to install 50 MW capacity plants in the first phase (by end-2016), which would be enhanced to 150 MW over a period of time. The plants would be established on surplus land available at these identified airports or on the large rooftops of airport structures.

The first in the series to adopt solar power is Kolkata airport, which is bigger and busier than the airport at Cochin. It has recently completed the installation of a 2 MW rooftop solar plant and aims to follow it up with a 15 MW solar farm.  The latest to join the bandwagon is Chennai airport, which completed the installation of a 1.5 MW solar power plant in May 2016. Apart from Chennai, Tiruchy and Madurai airports are planning to set up solar plants.

Indian Railways sets ambitious goals

Indian Railways (IR) has prepared a plan to meet 10 per cent of its total energy needs through renewable energy, including solar, wind and waste-to-energy, by 2020. In his previous budget speech (2015-16), the railway minister had laid down the roadmap for the Solar Mission of IR to install 1,000 MW of solar plants on the rooftops of railway buildings, covering all railway stations, workshops, etc. Further, in his 2016-17 budget speech, he stated that the possibility of utilising the spare land along railway tracks would be explored for this purpose.

As part of its Solar Mission, IR plans to generate 500 MW of solar energy through rooftop solar panels and another 500 MW through land-mounted solar panels. To this end, it has tied up with SECI to generate 100 MW of solar energy through land-mounted solar plants, and production is estimated to commence from December 2017 at an average rate of Rs 4.50 per kWh. It has also tied up with Madhya Pradesh-based Rewa Ultra Mega Solar Limited (RUMSL) to generate 50 MW of solar energy through land-mounted solar plants at an average rate of Rs 4.50 per kWh, and production is likely to commence from December 2017.

Meanwhile, IR is planning to use its waste to generate energy after the segregation of waste. Major terminal hubs and A-1 category stations will be taken up for this purpose initially.

For all these initiatives, it will use innovative financing mechanisms, including public-private partnerships (PPPs). Tenders for 250 MW of solar plants and 150 MW of wind plants will be issued under the PPP model. In this classic example of PPP, IR will provide its rooftops at no cost, while the project developers will invest money in setting up the solar plants. With the new focus on ease of doing business, it is expected that these initiatives will be rolled out at a faster pace. They will also give a push to the Make in India initiative, as a part of these solar plants will be set up with central financial assistance from the Ministry of New and Renewable Energy, which provides funds for the use of solar panels that are made in India.

DMRC sets an example

Shifting to renewable, especially solar, makes sense for metro rail corporations, given their high power requirements. Take, for instance, the Delhi Metro Rail Corporation (DMRC). Currently, 30-40 per cent of DMRC’s total operational expenditure is on power. This is ample reason for it to move to renewable energy. Notably also, DMRC consumes about 3 per cent of Delhi’s total power supply.

Realising this, a few years ago it initiated efforts to meet its power needs through green energy sources. In 2012, a German firm was deputed to survey the corporation’s stations and depots to identify their solar energy potential, and an MoU was signed with SECI. DMRC has since fast-tracked its efforts to harness solar energy.

In 2014, it released its official solar policy, which included its commitment to proactively establish and promote solar energy to reduce greenhouse gas emissions and the related impact on climate change. As per the policy, the organisation will attempt to use solar energy in all its activities as far as possible, reduce the dependence on fossil fuels, and increase the share of renewables in its overall consumption by generating 20 MW of solar energy for non-traction purposes by 2017. Further, it has set a target to install 50 MW of solar plants on flat and curved roofs of its stations, depots and other buildings, including upcoming metro stations, by 2021.

DMRC is also planning to procure 500 MW of electricity from off-site solar power plants located in other parts of the country, including Madhya Pradesh and Rajasthan. The aim is to be carbon-neutral in its electrical energy consumption for the next 25 years.

As of June 2016, DMRC has installed and commissioned 6.3 MW of solar plants and signed power purchase agreements (PPAs) for another 32 MW of rooftop solar plants. Besides this, it has signed a 25-year agreement with RUMSL to purchase solar power. A 750 MW solar power plant (three units of 250 MW each) is being set up by RUMSL in Rewa. As per the agreement, DMRC is committed to purchase at least 121 MUs of electricity every year from each unit of the solar plant.

Following the success of DMRC, Mumbai Metro too has decided to go solar. The 11.4 km Versova-Andheri-Ghatkopar stretch, which has completed two years of operations, is soon likely to get rooftop solar panels. Power from this will cover 30 per cent of the metro line’s non-traction energy needs such as lighting, air conditioning and maintenance. Currently, Mumbai Metro’s auxiliary energy non-traction use is 6.9 MW or close to 1 MUs per month. The traction requirement is nearly 150,000 units. According to the plan, Mumbai Metro will install 2.3 MW of solar capacity, of which about 2 MW will be produced through rooftop installations at stations and the remaining from solar panels set up at the depot. The solar panels at all 12 metro stations and the depot are expected to be installed during 2016-17.

Solar surge across industry verticals

While the aforementioned infrastructure sectors have significant renewable energy plans, stand-alone companies across various industry verticals have also charted ambitious plans to move towards clean energy. For instance, several public sector oil companies have started adopting renewable energy for their operations, with 3,135 petrol pumps reported to be using solar power as of end-2015. Among these, Indian Oil Corporation is learnt to have converted 2,600 of its petrol pumps to operate on solar energy.

Technology major Infosys has recently installed a 6.6 MW solar plant at one of its software development centres in Telangana, which is now completely run on renewable energy. The company is also building a 40 MW solar farm and plans to add 110 MW of solar capacity over the next two years, according to a news report.

In the financial sector, RBL Bank, a small private sector lender, has decided to make a solar beginning by setting up rooftop solar panels at 10 of its branches. Similarly, Tata Power has recently installed a 12 MW rooftop solar plant at an educational institute in Amritsar.

Need for caution

Clearly, the adoption rate of solar is increasing at a rapid pace across the commercial, industrial and residential sectors. Factors such as increasing diesel prices, challenges in conventional fuel supply, and unstable grid power supply are acting as an indirect carbon tax and pushing large consumers to adopt solar electricity. However, the industry needs to be cognisant of the negative repercussions of this trend. First, the inadvertent push towards solar carries the risk of crippling the already stretched power distribution companies.

Second, with such a large quantum of solar power being fed into the grid, grid stability could get impacted. Moreover, given that solar energy is available only for some hours during the day, it needs to be managed in a more efficient manner. The government recognises these issues and has been working towards devising and implementing energy reforms to address these. It has recently launched a scheme – the Ujwal Discom Assurance Yojana – to restructure the debt of power distribution companies and reduce the cost of electricity. It is also implementing the Green Energy Corridors programme to address transmission as well as evacuation challenges.

These are positive signals, which will encourage further uptake of solar power solutions. In the coming months, many more announcements can be expected from diverse industries.

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