India has a lifetime opportunity to build the Concentrating Solar Power industry like China did in the wind energy

An opportunity to harness the potential is knocking on its doors. However, the government must ensure policy and tariff uncertainty if the potential is to be realised.

India has envisaged adding 20,000 MW grid-connected solar power generation capacity by 2022 under the Jawahar Lal Nehru National Solar Mission (JNNSM) scheme, which is to be implemented in three phases. Half of the 1,000 MW capacity addition targetted in the first phase is to be based on the concentrated solar thermal technology.

The government has unveiled feed-in tariff for capacity addition envisaged under the first phase. Tariffs for power procurement under the second and third phases is yet to be announced.

“India has a lifetime opportunity to build the Concentrating Solar Power industry like China did in the wind power industry,” according to Anil Srivastava, chief executive officer of Areva Renewables.

“We have to look beyond the first phase and provide certainty of policy framework and enable the value chain—from research & development, engineering and manufacturing to project financing. If we do not do, someone else will do,” Srivastava said. “India has the advantages of capital market, industrial base and size of the domestic market. But we want clarity on tariff,” he said.

An investment of $75 billion is required to build solar power generation capacity envisaged under the JNNSM. “The real challenge will come when developers go to the capital market to raise money for project financing,” Srivastava said.

According to industry experts, while solar photovoltaic is better placed to meet the requirement of decentralised generation—for supplying power to areas where grid connectivity is difficult— concentrated solar thermal has the advantage of scalability and can be used to build utility scale generating plants. The Central Electricity Regulatory Commission has fixed feed-in tariff for CSP equipment plants at a lower level compared to photovoltaic equipment-based ones.

The ministry and new and renewable energy (MNRE) has set the threshold and maximum capacity for concentrated solar thermal projects at 5 MW and 100 MW, respectively, compared to 5 MW for solar PV for allocation of projects under the first phase of the JNNSM.

The MNRE’s guidelines stipulate that the solar power developer should either itself be a technology provider or have tie-up with a technology provider. Alternatively, the bidder can also be an EPC contractor having tie-up with a technology provider.