Capturing the Sun

“Energy storage clubbed with solar power can almost eradicate the need for conventional energy systems as it makes the renewable energy predictable and round the clock,” says Manoj Kumar Upadhyay, Chairman, ACME
 Solar is all set to become a crucial component of India’s energy portfolio. In an exclusive interview with EPR, Manoj Kumar Upadhyay suggests the roadmap to make solar power competitive with grid parity. He observes that the target of generating 20,000 MW under JNNSM is not a tough target.
Can solar power reduce India’s dependence on imports of diesel and coal for power generation?Sure!  The country’s dependence on conventional fuels that fulfil most of its energy demands can be curtailed by the uptake of solar power. We have an ideal location for solar power generation; our country has a great advantage of being in the equatorial sun belt of the earth thereby receiving abundant radiant energy from the sun. Clear sunny days are experienced 250 to 300 days a year in most parts of India. The annual global radiation varies from 1,600 to 2,200 kWh/m2 which is comparable with radiation received in the tropical and sub-tropical regions.
On the financial parameters, during the last few years, cost reduction in solar and cost increase in conventional power have shown significant potential for solar to compete with conventional, grid-connected electricity.
Here, we would like to add the element of energy storage that can revolutionise the entire energy infrastructure.  Energy storage clubbed with solar power can almost eradicate the need for conventional energy systems as it makes the renewable energy predictable and round the clock.  The surplus power generated can be stored in the energy storage device and then drawn back in the absence of the generating source or during peak demand.
Solar will soon become a crucial component of India’s energy portfolio. Solar will fill India’s supply gap while tackling unmet demand.
India sets a target of generating 20,000MW of grid-connected solar power by 2022. Is it an achievable target?We believe that the target of 20,000 MW is not a tough target and will be fully achievable with the support of the central and state governments, efficient solar policies and conducive regulatory framework along with the support from financial and banking institutions.  
On the implementation front, over the last few years, the technological advancements and manufacturing at a decent scale brought down the cost of the solar photovoltaic panels and have helped bringing down the levelised cost of energy.
However, to make solar power competitive with grid parity and to achieve the target successfully, support from financial institutions is a must. Incentives like priority sector lending, long tenure financing i.e. up to the life of the plant and low cost funding will be a boon for solar industry in achieving grid parity.
What are the steps to be taken to achieve this target?The current uptake of renewable energy can be scaled up in multiples with effective policy and regulatory support.
One of the most influential plans in India is National Action Plan for Climate Change, under which the Jawaharlal Nehru National Solar Mission (JNNSM) is playing a key role for most of the solar power investments in the country. Most of the states have also come up with their own feed-in-tariff mechanisms.
However efforts are still lagging for setting up solar projects under Renewable Purchase Obligations (RPO) issued by various State Electricity Regulatory Commissions (SERCs), and Renewable Energy Certificates (RECs).The penalty mechanism is unclear under RPO mechanism and there is a lack of clarity in terms of project cash flows beyond 2017 under REC mechanism. It is further leading to difficulties in financing and paying collaterals and securities to achieve financial closure.
The government should come up with concepts like open solar tariff or contracts to boost the solar sector which will really help in achieving the solar targets set by the government.
What will be your target until 2022?We aim to have a generation portfolio of 1,000 MW by the end of FY 17. In the field of energy storage systems, in partnership with Samsung SDI, we are planning to install 110 MWh in the next two years.
Could you brief us on some of your major ongoing activities?At ACME, our vision is to provide users an independent, reliable, cost-effective green source. To turn our vision into reality, we have taken a slew of measures and partnered with the leading energy giants in the space of solar energy and energy storage solutions.
The company has set itself upon an accelerated trajectory in the solar sector by entering into a three-way joint venture with world’s largest electricity utility, EDF EN and EREN, a Luxemburg-based firm, a leader in the natural resources saving space.
In association with such world-class partners, ACME is fully confident to meet its target of 1,000 MW solar power generation by the end of FY 17.
ACME also entered into a strategic partnership with Samsung SDI, the world leader in energy storage systems.  As per the agreement we will be the sole partners of Samsung SDI having the exclusive right to use Samsung SDI’s technology in India and Africa markets. We aim sale of upto 110 MWh of lithium ion batteries by FY 16 in these two regions.
ACME aims to make solar power tariff at par with grid-connected electricity. How are you going to do this? Is it commercially viable?  ACME has been working towards bridging the competitive gap between the renewable energy and the conventional grid-connected electricity.  There is a lot of research going on to improve the efficiency in the solar power space.  We are trying to improve the efficiency by optimised engineering and reducing execution time for our solar power plants. But still it can’t compensate for higher interest rate and weak rupee.  We believe that this would be immediately possible as the rupee restores its earlier position and interest corrected at 6 to 8 per cent.
What are the major challenges the sector is facing today?Though the regulatory and policy framework for state and central government is favourable for the solar power sector in the country at the moment, a lot of work needs to be done for segments implementing taking out solar from bank sectoral limit of power sector, REC mechanism, captive and open access users and rural electrification. 
Financial closure of the project is a challenge faced by many companies. It is highly related to the financial health of the state DISCOMs or the Power Purchase Agreement (PPA) signing authority. Financial or banking institutions are not comfortable for funding solar projects under other routes like REC etc. as REC is an unpredictable market. In order to boost such markets appropriate regulatory mechanism should be developed by the regulators. More interaction of regulatory bodies and financial institutions is required to address the financing issues.
What are your strategies in place to deal with the given situation?ACME is trying the level best to mitigate these issues. Our project finance team is putting every effort in getting funding at descent rates. With the economies of scale, the cost of solar power is reducing as has been seen in the recent JNNSM Phase II bidding where ACME has been allotted 100 MW.
With support of our international partners viz. EDF EN and EREN, being the largest electricity utility, and with clubbing our experiences; we are getting the best of the technologies, reliability and a good capacity utilisation factor of our power plants which will support to break through the current barriers in the market.
ACME has partnered EDF EN. How do you view this partnership from the Indian context?EDF Energies Nouvelles (EDF EN), the renewable energy major is the renewable energy arm of French state-run electricity utility Électricité de France S.A. and has acquired 25 per cent in ACME Solar.
We believe EDF EN and EREN partnership will help us to scale solar energy generation and play an important role in renewable sector. EDF EN and EREN will bring its expertise in the field of renewable energy. It will also give ACME Solar an access to EDF EN’s proven engineering expertise, leading technology partners, world-class R&D facility in France, where EDF EN and ACME Solar will be jointly conducting research as how to lower the costs of solar power generation.

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