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Tariff Competition: Concentrated Solar Power In Solar Park VS.Solar PV In Village

Reported from CSPPLAZA: India has set an ambitious target of 100 GW of solar by 2022 of which about 12.5 GW has been achieved so far. Solar PV has seen record low tariffs of Rs 2.44 / KWhr. Despite the noteworthy achievement that solar PV has attained, unfortunately the present approach of setting up of the solar PV projects in Solar parks has not benefitted anybody other than perhaps the Chinese solar companies. Some  articles have detailed out how the solar PV projects if set up in a decentralized manner at village level and delivering 15% free power to Agriculture, can help the discoms / state governments to practically bring down the agricultural subsidy burden to ZERO and cure the discoms from the cancer of agricultural power subsidy that is plaguing the Indian power sector.

Since the government has already made significant progress in developing solar parks, question is how, the solar parks that are being developed presently can be put to a better use. In order to do this it is necessary to take a step back and take a fresh look at the issues that the power sector is currently facing and the symptomatic treatment being adopted to address the same.

Indian power sector has undergone a rapid change in the past decade with the power generation capacity getting doubled and a transition to renewable sources from coal based power. The result of the above change are a) the Plant Load Factors of the coal based thermal plants have come down to a level of 58% b) CEA in it’s draft National Electricity Plan has recommended ZERO capacity addition thru coal between 2022 to 2027 c) Addition of large capacity of Solar & Wind concentrated in few locations which will be posing problems of grid stability due to their intermittency d) inability of both solar and wind power to cater to the peak demand period which typically occurs in the evening and morning e) bleak future outlook for stellar companies like BHEL, Thermax, L&T, etc whose power business is badly affected due to the shift to renewable power.

In the meanwhile, there have been significant developments happening in the CSP sector which have gone largely unnoticed but have been brought sharply back in focus with the recent record low CSP bid of $94.50 per MWhr (Rs 6.05/ KWhr ) in Dubai. As reported in some articles the bid for power production priced at $94.50 per megawatt-hour is one of four received by the Dubai Electricity and Water Authority (DEWA), in a call for 200 megawatts of concentrated solar power (CSP) capacity to be built in Dubai’s Mohammed bin Rashid Al Maktoum Solar Park. The article further goes on to state that The DEWA tender does not include any kind of subsidy, although the land will be provided at “nominal cost,” . Furthermore, the tender specifically calls for energy to be delivered from 4 p.m. to 10 a.m. every day of the year.

That means the Mohammed bin Rashid Al Maktoum Solar Park CSP plant, which is expected to be a solar tower design comprising two 100-megawatt towers, will act purely as a molten salt thermal storage system for the delivery of overnight electricity.

Proponents have said the news is growing evidence that CSP with molten salt could outgun PV and batteries for long-duration energy storage.

This news should be welcomed by GOI since this can reignite the interest in CSP which for various reasons has been dumped after the initial foray both by developers and GOI.

From the reports, it is seen that the Dubai bid has sought almost 16 hours of storage. This implies that if we were to limit the energy storage to only 8 hours ( to cater to 4 hours in the evening and 4 hours in the morning ) this could bring down the cost further and with the lower cost of domestic EPC companies, the CSP tariff of Rs 4.5 – 5.0 / KWhr is achievable which will be equal to the cost of power from new coal based power plants.

CSP with thermal storage offers numerous benefits some of which are a) it is a renewable power b) it is dispatchable c) it is based on conventional Steam Turbine technology in which India is quite strong d) the entire equipment can be manufactured domestically e) will provide huge employment opportunities both for manufacture, installation & operation f) will not impair grid stability.

Another major factor that favours CSP is the fact that today the power demand – supply situation is such that there is no need for “Round the clock power “. The 200 GW of installed capacity of coal based plant coupled with the solar power catering to the increased daytime requirement would be adequate to meet the power demand both during daytime and night time. Only duration wherein the shortages are likely be felt would be during the morning & evening peak and this is the vacuum which CSP can cater to most effectively.

Concentrated Solar Thermal Power (CSP) with molten salt thermal storage is the only cost competitive option presently which can meet the need for alternate baseload / peakload.

The Solar PV proponents would argue that the battery prices are coming down and that solar PV + battery in the long run will be cheaper than CSP with molten salt. While this is quite possible, however, this will further increase our imports and dependency on Chinese companies.

It is unfortunate that companies like NTPC, NLC etc whose core competency is in thermal technologies are promoting / favouring Solar PV technologies rather than developing CSP technology with molten salt storage. It is equally unfortunate that the present solar policy of GOI is promoting Solar PV in solar parks whereas the solar parks are ideal for setting up CSP projects. Solar PV projects are best suited for being set up in small capacities in large number of villages in a distributed manner which with 15% of free power to the beneficiary village would help to take away the agricultural subsidy burden from the discoms.

Combination of Concentrated Solar Power (CSP) in Solar Parks with Distributed Solar PV ( DSP) in villages would be a perfect fit for India which would help in transitioning to renewable energy in a sustainable manner .

Source: http://helioscsp.com/

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