Solar tracking-systems-india

Solar tracking-systems-india

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  How much beneficialare tracker-equipped solar PV projects? Analyst Note | 12 July 2012 CONTENTS How beneficial are solar PV Solar power project developers in projects equipped with tracking India face these questions as they • Introduction grapple with issues like falling equipped over conventional • Additional Revenue Generation feed-in tariffs and credit supply solar PV projects? • Case Study: 5 MW solar PV project by Reliance crunch from the lenders. Industries Are the additional capital This analyst note attempts to • Surplus Power Generation expenditure, operation and analyze the additional benefits of • Carbon Revenue maintenance costs related to projects equipped with single-axis • Additional Capital Cost tracking equipment justified by the trackers and compares them to • Conclusion increased power generation? the added investment. - Payback period INTRODUCTION METHODOLOGY With increasing competition and significant fall in feed-in tariffs of For comparison between conventional and single-axis tracker solar PV projects, developers under constant pressure to secure equipped PV projects, parameters determined by the CERC and the investment for their projects and, eventually, earn substantial expected operational parameters assessed by the seven profits from the power projects. Due to the evolution in the solar subsidiaries of Lanco Infratech Limited for their respective power PV technology the solar tracking equipment have emerged as a plants have been utilized. The actual on-field operational viable option to increase power generation at combatively low parameters and final output may vary from the values determined capital investment while earning significantly more revenue than in this note. Additionally, sector experts expect the actual benefits projects without any tracking equipment (conventional solar PV about 30% lower than benefits expected under ideal operating projects). conditions. At the end May 2012, India had an installed solar PV power The operational parameters for these seven projects have been generation capacity of over 970 MW and almost none of these accessed through publicly available documents furnished by these projects use any tracking equipment. companies. According to the draft regulations released by the Central Comparison of capital cost, operation and maintenance cost is Electricity Regulatory Commission (CERC) for determination of based on the parameters announced by CERC, for conventional preferential tariffs for renewable energy technologies till project, and the higher limit of average industry parameters for FY2016-17, the plant load factor (PLF) of conventional solar PV single-axis tracker equipped projects. technology has been taken as 19%. A solar PV project using single-axis tracking The PLF of a project equipped with single-axis tracking equipment, equipment similar to that being used in Lanco one of the simplest tracking technologies available, is around Infratech’s projects could earn 34.3 percent 23-25%. Seven project using this technology have been set up additional revenue compared to a project using subsidiaries of Lanco Infratech Limited. This note will compare the conventional solar PV technology over 25 years benefits and added costs between a conventional solar PV project through the sale of electricity and a project equipped with single-axis tracking technology, similar to the one used in the projects by Lanco Infratech’s subsidiaries. Solar PV projects by Lanco Infratech subsidiaries allocated under JNNSM Phase I (Batch I) Claimed Annual Developer Tariff Bids (Rs/kWh) Plant Load Factor (%) Generation (MWh) Finehope Allied Energy 11.65 11,803 26.95 Saidham Overseas 11.75 11,797 26.93 Vasvi Solar Power 11.65 11,788 26.91 Khaya Solar Projects 11.50 11,790 26.92 Electromech Maritech 11.60 10,346 23.62 DDE Renewable Energy 11.55 10,239 23.58 Newton Solar 11.70 10,395 23.78 Source: Climate Connect TERMINAL © Climate Connect Limited, 2012 [email protected] London | New Delhi | San Francisco 1
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  How much beneficialare tracker-equipped solar PV projects? ANALYSIS Comparison of Performance of Six Solar PV Projects A 5 MW conventional solar PV project with an assumed average PLF of 19% would generate 8.32 million kWh every year. Over a Assessed by Ministry of New & Renewable Energy period of 25 years such a project is likely to generate about 194.66 million kWh or 7.78 million kWh every year on average (assuming degradation in power generated at 0.7% for the first year and 0.5% from second year onwards). The average preferential tariff of the seven projects owned by Lanco’s subsidiaries is Rs 11.63 per kWh. A PV project based on conventional solar PV technology would thus generate revenue of Rs 226.4 crore over 25 years or Rs 9.05 crore every year on average through sales of electricity only. The Ministry of New & Renewable Energy had assessed the Based on the data available for these seven projects, a 5 MW solar operation of six solar PV projects. These six projects are PV project based on single-axis tracking equipment similar to the among the very first solar PV projects to be commissioned in one being used in these projects will have an average PLF of India. These projects are owned by Moser Baer, West Bengal 25.52%. Such a project is likely to generate over 216.4 million kWh Green Energy Development Corporation, Azure Power, over a period of 25 years or over 10.4 million kWh every year on Maharashtra Power Generation Corporation, Sri Power and average. Reliance Industries. Some of these projects were later included in the Phase I Jawaharlal Nehru National Solar A PV project based on single-axis tracking equipment similar to the Mission through the migration policy. one being used in these seven projects would thus generate revenue of over Rs 304 crore over 25 years or Rs 12.16 crore every Reliance Industries Limited has installed a 5 MW solar PV year on average through sales of electricity only. Thus a tracking- project at Khimsar, Rajasthan. The project is one-of-a-kind in based project would generate 21.74 million kWh additional India as it uses five different solar PV technologies. The electricity over 25 years and earn 34.2% more revenue than a project uses fixed structure modules, dual-axis tracking conventional PV project. modules, single-axis tracking modules and concentrated solar PV modules. The project uses mono-crystalline, multi- crystalline and thin-film solar modules. According to the data released by MNRE, the RIL project generated over 7.47 million kWh between July 2010 and June 2011. The data released also states that the annual average PLF of the project during this period was 18.08% which was 18.1% to 34.6% higher than the average PLF of three other projects for which data was available. The highest PLF in any month for the project by RIL was 23.63% which was highest among six projects. Policy & Options for Sale of Surplus Power A project using tracking equipment would be able to generate more A number of states in their solar power policies have specified that power compared to a project based on conventional PV technology the entities which will procure power from the solar PV projects and can thus sell any surplus power through other schemes. shall purchase electricity up to a set maximum limit. Thus solar PV projects which generate more electricity than the stipulated limit A project with PLF of 25.52% (average PLF of the seven projects shall have surplus electricity. owned by Lanco Infratech’s subsidiaries) would be able to generate The recent reverse-auction of 25 MW solar PV project in Orissa had over 2.82 million kWh every year more than a project with PLF of such a clause. The project was aimed at fulfillment of the solar 19%. Renewable Purchase Obligation (RPO) and according to the A project developer would have several options to use or sell this regulations, the Orissa distribution company had to purchase a set additional power. The developer may utilize this surplus power for maximum power generated from the project which was calculated captive use, sell power to a third-party consumer/distribution at a PLF of 19%. company/power exchange and earn Renewable Energy Certificates The power generation capacity of projects equipped with single- (RECs) as well. axis tracking technology is about a third more than the The project developer would be able to sell surplus power at Rs 3.6 conventional solar PV projects. While the capital cost of projects per kWh (average power trading price in CY2011 at Indian Energy with tracking systems is comparatively higher than the Exchange). conventional solar PV projects, the power output is substantially higher. © Climate Connect Limited, 2012 [email protected] London | New Delhi | San Francisco 2
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  How much beneficialare tracker-equipped solar PV projects? Can surplus power be sold in the open market? The average capital cost of conventional solar PV projects is Rs 10 If the project developers are able to sell the surplus power through crore (US$ 1.83 million) per MW. Due to the simple technical and third-party or power exchange route, they would be able to mechanical requirement for single-axis tracking projects, the generate significant additional revenue. Sale of power in the open additional capital cost is Rs 1.38 crore (US$ 0.25 million) per MW. market also opens up the possibility to avail benefits under the Since a single motor can control the movement of several hundred Renewable Energy Certificate (REC) scheme. However, no clear modules, the operation and maintenance (O&M) cost of tracking regulatory guidelines for such power sale arrangement is currently equipment is only 10 percent of the total O&M cost of the entire in place. project. According to the Renewable Energy Certificate (REC) Regulations, Cost comparison (in Rs crore) of conventional & single-axis tracking any power generation capacity committed to a power purchase project and share of cost of tracking equipment in entire project cost agreement at preferential tariff is not be eligible under the REC scheme. Some captive power projects from Uttar Pradesh Single-axis Conventional Increased Cost registered under the REC scheme are facing similar regulatory Parameter Tracking Project of Tracker issues. A final decision on this issue would possibly remove some Project regulatory hurdles for solar power projects looking to take Capital Cost 10 11.38 13.8 advantage of multiple revenue sources. O&M Cost (25 Expected revenue generation from sale of surplus power and sale of 5.80 6.38 10% Years) solar renewable energy certificates (RECs) between FY2013 & FY2017 CONCLUSION Power Sale Revenue REC Sale Revenue Clearly, the advantages of having tracking equipment in a solar Additional power every year = 2.82 million kWh power project overwhelmingly mitigate the additional capital and O&M costs. The Indian solar sector has ballooned from about 20 @ Rs 3.5/kWh @ Rs 11.35/kWh MW to almost 1,000 MW within a couple of years. The number of companies looking to enter the solar power sector have also Rs 9.87 crore/year Rs 32 crore/year increased tremendously resulting in steep fall in the feed-in tariffs. Project developers should take advantage of the rapid evolution in Carbon Revenue the solar power generation technology as it has technical and commercial advantages, some of which are listed below: These seven projects owned by Lanco Infratech subsidiaries are currently at the validation stage of the Clean Development • Increased power generation Mechanism (CDM). If these projects are registered by 31 December • Surplus power generated may be used bring in additional 2012, the CERs generated would be eligible for trading in the EU revenues ETS. These projects may also be eligible to sell carbon offset • Increased investor confidence instruments in the Australian carbon market from July 2015. • Increased power generation per unit area of land, less land area is thus required compared to a conventional project of equal A solar PV project with single-axis tracking and having an average capacity PLF of 25.5 percent would be able to generate about 10,052 CERs, based on the India’s emissions intensity for FY2011-12. At a CER Comparison in net profit (in Rs crore) from 1 MW conventional PV and price of €4 per tonne, the project can earn over Rs 27 lakh (US tracker-equipped PV project over 25 years through sale of electricity* $50,270) every year. If the project developers are able to sell the CERs in the Australian market they could earn even higher Parameter Conventional PV Tracker-equipped PV# revenues as the Australian emissions trading scheme, to launch in Total Cost 15.80 17. 76 2015, will have a floor price of A$15 to A$17.05 per tonne till June 2018. Revenue 45.28 60.82 Additional Capital Cost Profit 29.48 43.06 Tracker-equipped projects earn 46% more revenue than conventional PV The additional capital cost of single-axis tracking equipment projects represents only about 12 percent the total capital cost of the *Electricity sale assumed at Rs 11.63/kWh entire power plant. A solar panel array comprising of several # Rs 41.87 crore/year additional revenue from sale of power & RECs between FY2013 and modules is connected with a single driving mechanism which is FY2017 controlled by a single AC motor of considerably low rating. This Comparison of payback periods for various PLF, loan interest rates enables the motion of up to 250 kW of solar modules at the same time and using a single motor. Interest PLF 19% PLF 23.5% PLF 25.5% Rate The rotational motion of the AC motor is converted into very slow linear motion by the driving mechanism which includes the screw 5% 4.15 years 3 years 2 years jack. 13% 7.5 years 4.5 years 3.5 years © Climate Connect Limited, 2012 [email protected] London | New Delhi | San Francisco 3
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  How much beneficialare tracker-equipped solar PV projects? References: Draft CERC (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2012. Central Electricity Regulatory Commission. 11 November 2011, New Delhi Achievement till 31 May 2012, Ministry of New & Renewable Energy, Government of India, last accessed on 04 July 2012 www.mnre.gov.in/mission-and-vision-2/achievements Database of Indian solar power projects, Climate Connect TERMINAL, Climate Connect Limited, last accessed on 04 July 2012 http:// www.climate-connect.com Reliance Industries Limited 2011, ‘An overview & performance analysis of 5 MWp solar PV plant at Khimsar, Rajasthan’, Powerpoint presentation. Utility Scale Solar Power Plants – A guide for developers and investors, International Finance Corporation Shingleton, J., 2008. One-Axis Trackers – Improved Reliability, Durability, Performance, and Cost Reduction. National Renewable Energy Laboratory (NREL). New York, February 2008 Disclaimer Climate Connect Ltd has taken due care and caution in compilation and reporting of data as has been obtained from various sources including which it considers reliable and first hand. However, Climate Connect Ltd does not guarantee the accuracy, adequacy or completeness of any information and it not responsible for errors or omissions or for the results obtained from the use of such information and especially states that it has no financial liability whatsoever to the users of this report. This research and information does not constitute recommendation or advice for trading or investment purposes and therefore Climate Connect Ltd will not be liable for any loss accrued as a result of a trading/investment activity that is undertaken on the basis of information contained in this report. Climate Connect Ltd does not consider itself to undertake Regulated Activities as defined in Section 22 of the Financial Services and Markets Act 2000 and it is not registered with the Financial Services Authority of the UK. Climate Connect TERMINAL India’s largest database of solar power projects Featuring extensive information of over 300 solar projects Search across various For demo or subscription parameters – Policy, PPA contact: signed with, Location, [email protected] Capacity, Developer, Call: +91 11 4505 6713 Technology © Climate Connect Limited, 2012 [email protected] London | New Delhi | San Francisco 4