Solar
Agri-PV challenges and opportunities
Agri-PV Europe 2023 Solarplaza Summit was recently held in Rome, Italy.
Dr.-Ing. Matthew Berwind, Project Manager, Agrivoltaics, and Team Leader, PV System Simulation, Solar Power Plants, Fraunhofer Institute for Solar Energy Systems ISE, presented the opening note on agrivoltaics — dual harvesting of food and electricity.
We have confluence of pressure as current challenges facing agriculture and PV. The recent trends in middle European countries show a decrease in rainwater availability for irrigation, coupled with increased solar radiation. Combined factors work together to magnify agricultural drought stress.
Increasing frequency of extreme weather events means that many crops can benefit from protection like PV module shading. Expansion of land use for PV brings conflict around well-located land. Yes, raw numbers for available land in many countries are high, but how much is practically use-able for PV or agriculture?
DIN SPEC 91434 is a new German standard for agrivoltaics. Generally, agrivoltaics is the co-location of agricultural activities and a photovoltaic power plant on the same parcel of land.
An example of HyPErFarm — hydrogen and PV electrification on farm was given. The project duration is from Jan. 2020-Dec. 2023. It is looking at the integration of farm-colocated renewable energy production in the hydrogen economy, at a budget of €5.2 million. The installed capacity is 300kWp HSAT.
The approach involves development of material efficient single-axis tracked APV systems. Electrolysis and organic waste pyrolysis for biochar and hydrogen production. As the project nears its end, repetitions of crop cycles for winter wheat, cabbage, and potatoes are already showing promising results.
Another example of APV 2.0 and AgriFEe was given. Agrivoltaics 2.0 is coupling crop production and PV for structural transition. Project duration is from Jan. 2020-Dec. 2025. It is looking at bio-economy-based structural transition of traditional coal-mining regions at budget of €2.5 million. The installed capacity is 300kWp.
The approach involves in-situ phenotypic monitoring of crops for development of plant growth models suitable in heterogeneous light conditions. It is developing plant/PV/water digital twin framework for control of optimized agrivoltaic tracking systems. Test site is in Jülich, Germany, area of the Rhine coal-mining region.
He talked about an outdoor performance lab for PV system testing with laboratory precision equipment. The opening ceremony was in Spring 2023, and land lease for 30+ years, with potential expansion. It is focused on module monitoring, horticultural tests, vertical agrivoltaics, bifacial trackers, etc.
The approach is to provide industry access to variable testfield with high-precision monitoring equipment provided by ISE. The Infrastructure ready to use with low to no permitting efforts.
DeepTrack is to control algorithms for bifacial tracker systems. It runs from March 2023-Feb. 2025. It is developing robust tracker control algorithms that consider meteorological state, diffuse light conditions, and control light availability in intelligent ways. The approach is digital twinning of system site in Fraunhofer ISE’s realtime PV yield simulation platform, Zenit. It has neural network-based meta-model that simplifies complicated optimization problems to run on normal hardware. You can get predicted performance compared to real performance.
Varieties of agri-PV
Varieties of agri-PV: Chances and challenges, was presented by Dr. Stephan Schindele, Head of Product Management Agri PV, BayWa r.e. AG.
Agri-PV includes farming activity within PV project area on farmland. GM-PV does not include a farmer farming activity within the PV project area on farmland. In overhead and interspace agri-PV, there is challenge of overhead LCOE greater than interspace LCOE. For indoors and outdoors, there is very seldom Agri PV, but more use of BiPV. About 27 standards could happen in EU soon? And, globally?
There are examples of solargrazing, hayvoltaics, cropvoltaics, cowvoltaics, fruitvoltaics, biodiversity PV, etc. If you want to develop agri-PV successfully, the following aspects should be considered. Decision makers and competence carriers must work hand in hand. The operational functions must learn how to integrate an economically viable agricultural activity into the PV project. Technical (legally (project development, sales, legal), and commercially (project management, business analyst, IPP) competence.
New structures, processes, and tools must be created to coordinate capacity building knowledge transfer. Finally, change! Disrupt business as usual is not only true for the farming sector, but also for the PV sector! Learning about farming.
A challenge is 5C agri-PV Tool supporting project development, or the information management covering the agronomic side of the agri-PV project. The future of utility-scale PV on farmland is agri-PV.
Agri-PV is offering target projects: utility scale, fast permitting, low LCOE, better grid access. It is making farmland available for project implementation with no or little competition with farming use. There is easier permitting, as land use efficiency is increased. Governments de-stimulate monofunctional land use and support holistic, cross sectoral solutions. Biodiversity PV, solargrazing, solarpollinator, hay and cropvoltaics are cost competitive with GM PV projects. Cow and fruitvoltaics (overhead applications) need financial incentives support mechanism to be developed.
Agri-PV is innovative with divers, and stakeholder inclusive. ‘Energy only’ is not enough! Agri-PV brings an additional value to the energy transition, and agricultural businesses. Farming is now participating in energy transition, increasing and diversifying income of farmers. It is balancing interest among three sectors: agriculture, PV, and environment.
A farmer’s experience
Ms. Audrey Juillac, VP, FFPA or Fédération Française des Producteurs Agrivoltaïques, presented her experiences as a farmer. She is an organic vegetable producer in Lot-et-Garonne, France. Currently, the farm does not have any employees. It has usable area of 3.5 hectares, nestled between a forest and a cornfield.
FFPA was founded last year, by and for farmers. It is an agricultural vision of agrivoltaism. It has 120 members representing 3k farmers and 1k agrivoltaics projects.
Why did she start? A neighbor started a project with a developer. She saw this as an opportunity to be part of the project. It became a necessity to facilitate my installation. She started cultures, such as medicinal plants, vegetable cultivation workshop, and an asparagus field. She aligned design with her preferences and technical needs. Consulting firms conducted site visits and plans. There is ongoing collaboration with significant author involvement.
Since this project is also a community initiative, we wanted to allow local residents and schoolchildren to visit the vicinity of the power station by planning a pathway all around it. In the picture, the marigold cultivation is on the left, the pathway, and the forest on the right.
How industry leaders optimize performance of renewable and energy storage assets?
Solar Media organized a conference around how the industry leaders optimize the performance of their renewable and energy storage assets.
Fluence has a mission to transform the way we power our world to create a more sustainable future. BTE Renewables is one of Africa’s leading renewable energy companies, with a portfolio of nearly 500MW of wind and solar PV projects in South Africa and Kenya.
Gianmarco Pizza, Head of Digital Asset Performance Management, Fluence, said there are common challenges in asset performance management. These include data management, issue identification, portfolio visibility, maintenance planning, and technical and financial reporting.
Large-scale assets means large-scale data collection. Energy storage capacity is projected to
increase 20x from 2021-2030. Another challenge of data management is improving time to value with data automation. Data collection is automated, with proven data collection process of various asset types and OEMs. Data quality involves cleansing/filtering to maintain high level of data quality and focus on essential metrics. Data harmonization is standardized and scalable data model across assets. Data storage has secure and redundant storage of the whole operational history, from the CoD. Finally, long-term support with ongoing database management, cyber security, and maintenance.
As per an Asset Manager, Renewable Investment Fund: “What we’ve achieved with Nispera so far gives us confidence that we can continue adding more assets to the portfolio without requiring additional data analytics resources. It saves us the cost of hiring at least one or two people that we would otherwise need in-house to manage this volume of data.”
In portfolio visibility, we have disparate assets and technologies that limit scalability. Data is also spread across multiple systems to manage asset portfolio. We need to be achieving a comprehensive view of all assets.
With issue identification and prioritization, there is difficulty understanding and prioritizing issues and alerts. We can look at addressing common asset operational issues with AI. These can be identifying PV tracker faults, tracking wind turbine performance, and detecting battery temperature anomalies.
For maintenance planning, it is better to move from reactive to proactive. We can anticipate and plan, track performance to ensure resolution, and communicate with stakeholders.
Lastly, technical and financial reporting. Ad-hoc reporting is time-consuming and error-prone. Operators may spend countless hours collecting and harmonizing data from various sources to generate diverse technical and financial reports. We can generate reports from a single source of organizational truth. There are different metrics to focus on based on asset types.
Best practices
For solar, there are tracker position, actual production, improvement potential, irradiance, and system efficiency. For wind, there are actual production, improvement potential, wind direction, and grid limit, power curves, and rose charts. For storage, there are charging profiles (charged and discharged energy), average SoC, and actual vs. contractual availability.
There are some best practices to follow. Flexible reporting can meet the needs of different stakeholders and time horizons. Intuitive reports that are fast to read and convey key information for quick consumption. Consistent, auditable data creates a system of record for historical information and reports. Convert power metrics (MW and MWh) into commercial metrics for financial stakeholders.
Stefan Van Niekerk, Head of Operations, BTE Renewables, stated that BTE reports address different stakeholder needs. Intuitive charts show budgeted vs. actual YTD performance at the portfolio level for executive overview. An AI-powered digital twin spotlights the under-performance, enabling prompt investigation and resolution.
Fluence’s Nispera is a next-generation asset performance management software for renewables and storage. Nispera helps the asset owners maximize asset value. These include asset and portfolio optimization. It results in a typical annual profitability uplift of 3-10 percent. Customers across the globe trust Nispera, including BTE Renewables, Lekela, Pampa Energia, PacificHydro, PEC Energia, Terna, Wirtgen Invest, etc.
Lessons learned in agri-PV
Solarplaza, The Netherlands, organized a conference today on growing pains — lessons learned in agri-PV. The participants were Constantin Klyk, Project and Product Manager, Zimmermann Group, Germany, and Ms. Elena Rasheva, CEO and co-founder, EVklips Energy, Bulgaria.
Zimmerman Group, Germany, offers fixed tilt systems, tracker PV systems, floating PV systems, and agri-PV systems. Klyk talked about flexible agri-PV systems. There is a symbiosis of energy and agriculture production. Farmers are deploying agri-PV solutions. They deploy agri-PV for protection from heavy rain/hail, sunburn, reducing amount of plastic, and reducing use of pesticides and fungicides. Zimmermann offers agri-PV for dual, and parallel uses.
ZIM Agri EW system has an East-West orientation, and is suited for use with row panels. There is flexibility in span and maximum crop height. Integration of nets for better rain distribution is possible. He talked about Project Kressbronn that has a HailNet, water system, and planting wires. The module is 1110pc, and power is 300kW. Clearance height is 3.5m for apples. There was 20 percent increase of crop yields. 2022 was typified by heat and drought. It has 80 percent decrease in use of fungicide/pesticide. Raspberries and other fruits are also very suitable for agri-PV.
EVklips Energy has executed agri-PV in several projects. Specifically, these are across Austria, Denmark, The Netherlands, etc. It has over 1GW of installed capacity. Ms. Rasheva said that aspects to consider during planning and budgeting stages include crops lifecycle, soil and ground conditions, and structure height.
For crops lifecycle, installation activities are planned according to the annual cycle, and harvesting of the crops. We need to consider ground preparation, seeding, and germinating. We should not compromise with the surrounding areas while deploying.
For soil and ground conditions, the site access options and type pf machinery to be used during construction depends on soil type, cultivation stage, and denivelation of the terrain. We have to be mindful of all the ground conditions.
Regarding structure height, we need higher H&S requirements. Cost of installation is due to need of specialized machinery. We also need to focus on sustainability. In agri-PV, every scenario and project is very different. There are massive benefits from agri-PV. We still have a long way to go.
Agri-PV: Harvesting the opportunities of solar + farming
Solarplaza recently hosted a webinar, in collaboration with Next2Sun and the Fraunhofer Institute, on how agri-PV can harvest the opportunities in solar and farming.
Ms. Tamara Bretzel, Agrivoltaics Research, Fraunhofer, spoke about agri-voltaics as a game-changer. The agri-voltaic idea came from Prof. Goetzberger and Zastrow, back in 1981. It started in France and Italy in 2011 with first, notable agri-voltaic system. She gave some examples.
- Germany, Hochschule Weihenstephan-Triesdorf, 30 kWp, 2013.
- Italy, R.E.M. Tech Energy, 3 x agrivoltaic systems since 2011: 3.2; 1.3; 2.15 MWp.
- France, Universität Montpellier, 50 kWp, 2010, 2017-2019: 45 MWp.
- Japan, Solar Sharing, Ministry of Agriculture, Forest and Fishery, Akira Nagashima, 1,054 Solar Sharing 2013-2018, 80 kWp/project, 85 MWp.
- Italy, Corditec, Ahlers, 800 kWp, 2012.
- Egypt, SEKEM, Almaden, Kairo, 90 kWp, 2017.
- USA, University of Arizona, approx. 50 kWp, 2017.
- Taiwan, Green Source Technology, 400 kWp, 2016.
The installed agri-voltaic capacity worldwide until 2011 was minimum 14 GWp. More facilities are planned in Vietnam, Israel, Mali, India, Mexico, USA, etc.
DIN specification 91434 has core requirements and criteria. These include agricultural yield at least 66 percent to the reference yield, agricultural usability of area must be guaranteed (agricultural use concept), loss of land due to installation of the system maximum 10 percent (Cat. I) or 15 percent (Cat. II), adapted to agricultural needs with adequate light availability and homogeneity, and water availability, and avoid soil erosion and damage (structure, anchoring, water management).
As a result, irrigation demand by up to 20 percent. Rainwater collection was done for irrigation purposes. There was possible reduction in wind erosion. Use of PV substructure for application of protective nets or films was done. Optimization of light availability for crops, for example, was through tracked PV systems. Higher efficiency of modules was done through better convective cooling. Higher efficiency of bifacial modules, which use light from both sides and generate electricity, due to larger distances to the ground, and to the neighboring rows of modules.
Successful pilots
She also talked about pilot plant at APV-Resola Heggelbach. Installation was done in 2016 in Heggelbach near Lake Constance, at height of 8m and vertical clearance 5m. The installed capacity was 194 kWp. There were 15 rows measuring 136m in length, each, with 48 modules of 1.7 m². Bi-facial double-glass modules of 270W were used from SolarWorld. The yearly production was ~ 256 MWh in 2020. Crop rotation was about clover grass, celery, potato and winter wheat.
All of this has economic feasibility and technical potential in Germany. Germany has 47 percent of agricultural sector. 17 percent were considered for APV installations (without grassland, reserves, protected agri land and wetlands). There was 1,700 GW total APV capacity. Germany now aims for carbon neutrality by 2030/ 2045. This includes 215GW / 400 – 500GW for PV, ~ 0.5 percent of agricultural land needed by 2030, and ~ 3.5-4.5 percent of agricultural land needed by 2045.
There are other R&D projects currently going on. APV-Obstbau is the first orchard pilot project in Germany. Project time is from April 2020-April 2025. Field trials are done with eight different apple species. Installed capacity is about ~ 260kWp, using semi-transparent PV modules, tracked/non-tracked.
Another is APV-MaGa, or, agrivoltaics for Mali and Gambia. It is looking for sustainable electricity production according to the energy-water-food nexus. Project time is from August 2020-July 2023. It is looking at rainwater harvesting, socio-economic barriers, WEF-nexus. The installed capacity (5 prototypes) is 4x50kWp, and 1x150kWp.
Next comes SHRIMPS or solar-aquaculture-habitat as resource efficient and integrated multi-layer product system. The project time is from June 2019-May 2023, looking at the aquaculture, bio flakes, and shrimps. Installed capacity is 100kWp. There are different shading rates and corresponding effects on shrimp production.
APV 2.0 is a coupling plant and PV production in adaptive systems at Jülich, a town in the district of Düren, North Rhine-Westphalia, Germany. The project time is Jan. 2020-Dec. 2025. Topics include plant respondence under systems, optimized tracking and regional economic potential in adaptive systems. The installed capacity is 450kWp. Technology involves the development of a custom tracking system and algorithm in connection with digital twins of photosynthesis, irradiation, and PV yields.
Another is the SusMedHouse, or, Sustainability and Competitiveness of Mediterranean Greenhouse and Intensive Horticulture (EU Prima). The aim is automated and sustainable greenhouse system. Topics include advanced technologies, adaptive energy system concept, PV integration for optimal growth conditions, etc. Investigated plants include tomato, lettuce, paprika, etc.
Vertical bifacial agri-PV
Sascha Krause-Tünker, CFO, Next2Sun, spoke about the vertical bifacial agri-PV, and innovative PV solutions for energy transition.
Dual land use works! PV Installation covers less than 1 percent of the plant. There is unchanged water supply, with only small change in solar radiation (10-15 percent of annual energy). Approximately 90 percent of the land can be cultivated with conventional agricultural machinery. Positive impact on vegetation and crop yield is possible.
Some of the possible plants for agri-PV include Wheat, barley, rice for grains, potatoes, tomatoes, leeks, peppers, etc., for heavy eaters, french beet, May beet, white beet, etc., carrots, parsnips, parsley fennel, etc., and special crops and legumes.
Vertical bifacial Next2Sun systems produce electricity when needed. PV systems with east-west orientation are consistently thought to the end. Modules’ surfaces are aligned vertically to the east and west. By using bifacial (light-sensitive) solar modules on both sides, they can generate power with a single solar module. Electricity production is primarilly in the morning and evening hours.
Further benefits from vertical bifacial Next2Sun Systems include higher self-consumption potential for self-generation systems, beneficial effect on the power grid, advantage of direct generation at off-peak times compared to electricity storage, generation benefits in higher latitudes, with stronger ground reflection (albedo), and at low temperatures. Less clearing is required due to vertical position. It has a win-win-win case in snowy regions.
An example is hay harvest in Europe’s largest agri-PV plant in Donaueschingen, Germany. Silage harvest and pea harvest is also done in Donaueschingen. Other examples are arable farming in Nihonmatsu, Japan, harvest of winter and spring wheat, and lentils, in France. In Austria, there is potato cultivation in Guntramsdorf. There is the installation of bifacial solar fence for chicken enclosure in Austria, and another for cows in Ireland.
2-4x investment needed to meet net-zero targets by 2050: BloombergNEF summit
BloombergNEF Summit 2022 was held today in New Delhi, India. It provides the ideas, insights and connections to formulate successful strategies, capitalize on technological change and shape a cleaner, more competitive future.
Jon Moore, CEO, BloombergNEF, welcomed the audience. We have a ‘think different’ campaign. Coal has dominated India’s power sector so far. India has the most ambitious renewable targets after China. India boasts best-in-class renewables cost. Strong, clean energy policies are the backbone of India’s energy transition. India also leads G-20 in 2021 renewables auction capacity.
Road transportation is another market set to be transformed. Globally, different sectors are in different states of readiness. The importance of segments varies by markets. China is leading in two-wheeler EV market. India can be a key leader, outside of China. Bus electrification is a major opportunity. Canada has been investing more. Charging infrastructure will grow and attract investment. Battery demand will also see huge growth. Fleet electrification deals are a great place to start. EVs already avoid 1.5 million barrels of oil demand per day. India has been rising in policy scorecard due to power and transport.
Today, global investment targets are being set. This is a $100 trillion opportunity. Global investments levels have been rising. 2-4x investment is needed to meet net-zero targets by 2050. Local investment has been increasing again, in India. Last year saw huge spike in green bonds. Local investment has been happening. Private finance needs enabling environment and experience.
ESG, the Indian way!
The opening session was a discussion around ESG with Injeti Srinivas, Chairman, IFSCA. Nitin Jaiswal, Head of Government Relations & External Relations, Asia Pacific, Bloomberg, was the moderator.
Injeti Srinivas, IFSCA, said we are procuring lot of international financial services over $100 billion. We can bring back this business to India. We can service our own needs and export financial services. We need to align our market infrastructure with global practices. We should have full capital account convertability. We also need to have a regulator. SEZ Act has the primary objective of promoting exports. We should be able to compete with offshore jurisdictions. India is set to emerge as a leading financial center. We are competing with best of jurisdictions.
When we talk about ESG or corporate governance, CSR is a legal obligation in India. Mahatma Gandhi had said that the world has enough for meeting everybody’s needs. The Companies Act says every director has to ensure he or she works in the best interests of the stakeholders and the environment. Compliance is so far not in form, but in substance. Today, we have national guidelines. Conduct has to be responsible.
IFSCA has two centers. We have enabled green bonds, social bonds, sustainability bonds, and are working on transition bonds. India has been a late starter for green bonds. Last year, $6.8 billion was raised. India has two financial jurisdictions — local and international.
There has been the development of global sustainable finance hub. It should be focus area for regulator. To raise global capital, we have to be aligned with global principles. We should be moving towards a framework that also meets India’s requirements. We should also have a system that allows the Indian industries to migrate. There should be some sustainability frameworks. Industries that are not so green, should also be given a chance. Agriculture is a major sector. There should be some incentivization for small farmers. There are so many things to do. India is positioned to take a leadership role. Our financial system is also gearing up. The Government can also raise green sovereign bonds.
Transition strategies
This was followed by a talk on transition strategies of India’s corporations. Rohit Gadre, Senior Associate, BloombergNEF, said India’s wind and solar plants need rapid growth in capacity additions. Companies need to also manage regulatory changes. Inaction is threatening ways companies operate. India’s regulators are becoming stringent on disclosures. Companies have to report greenhouse gas emissions, waste and water management, etc. The future is not going to be easy.
The future belongs to those who are prepared. Indian companies are joining the global decarbonization initiatives. Task Force on Climate-related Disclosures (TCFD) looks at forward-looking disclosures. Net zero targets cut across sectors, from cement and energy, to finance and technology. The complexity lies in the details. Infosys, TCS, and Wipro are among the IT companies.
Indian corporates have ambitious clean energy plans for the next decade. Reliance Industries plans to invest $10 billion to create renewable energy ecosystem. Adani Group has similar plans. Government-owned energy firms are getting started on decarbonization journey. Private sector IPPs are trying to stay a step ahead of government firms. JSW Energy is building 958MW of renewables for supply to JSW Steel. Adani Solar has 3.5GW of solar cell and module manufacturing capacity. ReNew Power is setting up 2GW cell and module plant in Gujarat.
Rate hikes and supply chain disruptions are weighing heavily on renewables. Some countries and companies are tweaking their plans. Germany plans to increase use of coal power plants. China may open some shuttered coal mines. Change to low-carbon transition is going to be hard, and messy, but gorgeous.
How prepared are Indian companies?
Next, there was another panel discussion on the topic: Are Indian companies prepared for sustainable markets? The participants were Ms. Deeksha Vats, Group Chief Sustainability Officer, Aditya Birla Group, Ms. Divya Sharma, India Executive Director, Climate Group, and Anirban Ghosh, Chief Sustainability Officer, Mahindra Group.
Ms. Deeksha Vats, Aditya Birla Group, said Indian companies are ready. There is a variety of Indian companies who are defining what sustainability means for them. We now need to look at their maturity. We need to look at what does it mean to have a sustainable market.
Ms. Divya Sharma, Climate Group, agreed that it depends on the companies. Businesses take 100 percent committment. The purpose is to also influence policies that can affect the market in future. Government and businesses are there to make it happen.
Anirban Ghosh, Mahindra Group, said there are technologies that are ready for sustainable markets. Another sector is ready for sustainable financial, such as infrastucture. There can be net-zero buildings in the future. Some industries are not debt-heavy.
Sustainable market
Ghosh said there should be funding available for transition to green. An example can be sustainability-linked bonds. Ms. Vats added that we need to define areas, such as materials. We can find alternative materials. Having access to circular economy is important. There is also technology financing. To scale them up is very important. We need to look at capital and access gaps.
Ms. Sharma added that we need to have enough demand for a technology. Then, we can say the markets have become sustainable. Urban development sector has several examples. There can be enough investments and enough demand.
Ghosh added that there is a chaotic ecosystem. Every new framework gets heavily discussed. Investors need information regarding where to invest. We are in a stage where all this is developing. We are also looking to solve carbon-in-the-air problem. Investors get more information. Climate action is an integral part.
Ms. Vats, Aditya Birla Group, noted that every stakeholder needs corporates to be around so that they can continue to do business. Frameworks are very similar, and we should grow them in a responsible manner. Ultimately, the business should address the needs.
Ms. Sharma, Climate Group, said any company making commitment, needs to ensure their impact is solid. Accountability and reporting help in the impact. Climate groups also have commitments for climate action. Regulations have to support them. There can be utilities who can set up green tariffs. It is like a marriage. We have to be prepared for that.
Regarding financial investors, Anirban Ghosh, Mahindra Group, added it depends on returns to capital. Scaling up can be very easy. We need policies for renewable energy that can lead to faster adoption. Our Group wants to make our suppliers 100 percent green. We have some bottlenecks in regulation.
Ms. Vats added that we need to see how the corporates are using nature-provided solutions and ecosystem services. They also need to see the material risks and opportunities. It will encourage people to do more. We need to have clear targets and roadmap.
Funding India’s energy transition
There was another discussion about how to fund India’s energy transition? The participants were Neeraj Gambhir, Group Executive, Treasury, Markets & Wholesale Banking Products, Axis Bank, Toby Lawson, Chief Executive and Chief Country Officer, India, Société Générale, Abhishek Poddar, MD, Head Business Development of South East Asia & India, Macquarie Asset Management, and Ms. Lakshmi Iyer, CIO, Kotak Mahindra AMC, talked about targeting international financers.
Neeraj Gambhir, Axis Bank, said the opportunity is huge. The next push is going to come from the energy space. There is going to be significant opportunity. There is potential for banks to get involved in power projects. There is more confidence now. PPAs have been great, and tariffs are holding firm. There are mid-sized power producers who are involved.
Toby Lawson, Société Générale, added that India needs to finance renewables. India is great at raising capital for green bonds. To hit a target for 2030, we are looking at 20-30GW per year at least. There should be long-term PPAs, etc. State governments should also purchase renewable energy. We are comfortable with large investments. We are finding huge opportunities for financing India’s green opportunity. Large renewable players are able to tap the green market.
Abhishek Poddar, Macquarie Asset Management, said that we are optimistic about the market regarding green investments. Promoters have also changed from the conventional. Renewable platforms are today backed by global financial providers. Ms. Lakshmi Iyer, Kotak Mahindra AMC, talked about targeting international financers.
Poddar added that it is better to leave to the market to find the best way. It varies, based on the type of project. As long as the projects are viable, people should be able to raise capital.
Gambhir noted there can be projects that are localized. We can arrive at a meaningful size of the debt market. As producers have gained confidence, they have recycled capacity. It is a capital-intensive business. There is place for smaller producers.
He also talked about how banks can raise their capacities. It was the first green bond issuer. It is also about establishing credentials for ESG framework. Banks are not allowed to issue bonds, except for international financing. We should have a well diversified asset portfolio. We can invest Rs. 30,000 crore over next four years in sustainable projects.
Lawson added that you need to show commitments to international markets. We can partner with local banks who can show commitment. There is more appetite for international markets, and huge appetite for good-quality assets. India represents good-quality assets for renewable energy. Domestic market will also grow, as well. Large Indian companies are targeting sustainability, etc. Equities coming from offshore are attractive.
Poddar said that from equity side, there are dollars waiting to be invested. There are active asset managers building profiles. The India story in renewables are well known. We need to look at the broader picture. India will continue to attract capital. For green bonds, we need to improve the bond market. In infrastructure, we are talking about 15-20 years.
Gambhir said that we have seen volatility in power pricing for renewables. If we can get some assurance, new models can be taken up. Lawson added that the PPAs have fixed prices. We need to prioritize the renewables. As transition kicks pace, we can look at the chain and long-term fixed price.
Poddar said that as economies develop, lot of asset allocation can happen. As government opens that up, it can be a sought after sector. Gambhir noted that we need energy security via renewables. Lawson agreed that we need to give investors comfort. We need to see more resilience in the renewables sector.
Financing India’s 2030s renewables ambition
Financing India’s 2030s renewables ambition, was delivered by Shantanu Jaiswal, Head of India Research, BloombergNEF.
Renewables are at the heart of India commitments. Wind and solar could make up 51 percent of power generation by 2030. They will require $223 billion in financing from 2022 to 2029. Renewable project developers have raised debt from several different sources. PPA counterplay is important. There is evolution of debt financing for renewables in India. IPPs move to protect returns in face of increasing competition from PSUs. Infrastructure investment trusts are an attractive avenue for IPPs.
Investors value exit opportunities, and that is a sign of the industry’s maturity. It also helps in building new businesses in the market. Renewable projects in India face regulatory, project, and financing issues, etc.
There are measures to increase the availability of financing, such as regulatory, government support, and changes to auctions. We also looked at lessons from the international markets. There should be firm assurance on provision of government land. Auction land parcels with grid access.
Looking back at semicon / tech in 2021!
We have finally reached the end of 2021! Let’s have a look at some of the breath-taking moments from the global semiconductor and technology industry during the year.
In January 2021, Dr. Anthony Fauci called for remembering Covid-19 lessons at PMWC 2021. I was invited by Dr. Leroy Hood, SVP and Chief Science Officer, Providence St. Joseph Health, Chief Strategy Officer, Co-founder, and Professor, Institute for Systems Biology (ISB), and Co-Program Chair, PMWC 2021. Dr. Fauci was presented the luminary award.
Malcolm Penn, Future Horizons, UK, predicted the global semiconductor market to grow 18 percent in 2021. Scotten Jones, President, IC Knowledge LLC, presented on logic leadership in PPAC era at ISS 2021. AI processors were said to be driving innovations in advanced packaging, as per Jean-Christophe Eloy, CEO and President, Yole Développement. At ISS 2021, semiconductor and equipment recovery were said to be on track for 2021.
Come February 2021, and Semiconductor Industry Association (SIA) had a session on memory semiconductors market and technology trends. At SEMI Flex 2021, there was a panel discussion on sustainability and power for batteries. There was a session on electronics for the brain, and another on liquid electronics for stretchable conductors. Next, European 5G Conference 2021 had a session on key drivers for 6G. IHS Markit presented on autonomous sensors and future apps. Erik Collart, Edwards, came up with an enlightening talk on smart manufacturing in More-than-Moore era at the SEMI Technology Unites summit. Embedded computing with image sensors was another.
Dr. Wally Rhines, CEO, Cornami gave his views on why FHE was ultimate for cyber security. Quantum computing is going to be next game changer. At an SIA summit, it was predicted that the global semiconductor industry could be worth trillion dollars by 2036. Elsewhere, in Europe, CEA-Leti has big bets on silicon-based quantum computing. It was announced IEEE International Reliability Physics Symposium (IRPS), will be held virtually in March 2021.
Bill Gates said green premium is metric that says you are on to success in 2050 at CERAWeek by IHS Markit 2021. In March 2021, there was a conference on RISC-V, and how China can reduce risks. Semiconductor outlook 2021 — navigating through turbulent times, came next, by SEMI. At the Technology Week Summit organized by SEMI, SAW/BAW filters, and future materials technology for new filters were discussed, which took me back to my days at Global Sources, Hong Kong, as were technological challenges for MOS HEMT GaN power devices. IRPS 2021 discussed memory’s journey towards future ICT world, and reliability of SiC MOSFETS. SEMI organized a conference on semiconductor outlook 2021 — navigating through turbulent times.
In April, I received shocking news. We lost Shankar Ghosh, or Keshtoda, to Covid-19! He was my guru from my young days. I recall my first ever article, at 14, published by him at Pragati Manjusha, Allahabad. Just a week back, we had lost Bachchu, or Subhash Ghosh, his younger brother. There was another very sad loss of Buluda, or Arun Chakravorty, our brother-in-law and a very close friend, due to Covid-19.
Next, USA started strengthening microelectronics supply chains, and with the CHIPS Act in place, looks well set to do so. The White House said: Resilient American supply chains will revitalize and rebuild domestic manufacturing capacity, maintain America’s competitive edge in research and development, and create well-paying jobs. Also, e-Estonia Digital provided masterplans on mobility.
6G’s chance for semiconductors, and skills for a digitalized Europe were also discussed at the SEMI ISS 2021 conference. Sensors and software were enabling autonomy for urban air mobility at the SEMI MSTC 2021 conference. Rockwell Automation discussed how Industry 4.0 can strengthen India’s pharmaceuticals sector. Cedrik Neike, Siemens, called for Industry 4.0 in silos needs to be brought together. At ISQED 2021, there was a session on the confluence of AI/ML with EDA and software engineering. Yole Développement, France, came up with global technology trends impacting optical transceivers market.
In May 2021, Arvind Krishna, Chairman and CEO, IBM, announced a major breakthrough on world’s first 2nm technology. It was built at the Innovation Lab in Albany, New York fab. At Display Week 2021, there was an engrossing Women in Tech panel on leadership skills. JS Choi, Samsung Display, talked about the metaverse and great future of display. Every display that maximizes immersion is part of the metaverse. Another interesting session was on start-manage-exit option for CEOs. Guillaume Chansin, Director of Display Research, presented on the opportunities in AR/VR for display manufacturers. Next, 6GHz emerged as the new spectrum battleground.
SEMI ASMC 2021 began with continuing Moore’s Law! Center for the Study of the Presidency & Congress (CSPC), USA, organized a conference on semiconductor shortage lessons for US innovation leadership. Digital Twin Consortium organized a webinar on how digital twin is making the vision come to life. Experts at INDIAai discussed the race to AI is just beginning.
Come June, and Ericsson UnBoxed Office had a session on the importance of network reliability from telco’s perspective. GSEF 2021 held a panel discussion around the generation and use of data in fab processing. There was the spectrum roadmap for Europe laid out. At the Leti Innovation Days, hardware is back, encapsulates role of microelectronics. At the VLSI Technology & Circuits 2021 conference, there was a panel discussion around new generation chip makers vs. incumbents. Here, Tesla made the first appearance. There was another discussion around 3D/heterogeneous integration: Are we running towards a thermal crisis?
At VLSI Technology & Circuits 2021 conference, Spintronics workshop suggested a gateway to green society. Hexa-X defining blueprint for 6G was hot topic at EuCNC 6G summit. Acellera and Electronic System Design (ESD) Alliance (EDA Alliance) co-hosted a conference on Remote work, remote chip design: Building chips during a pandemic. China Tech Threat’s co-founder, Dr. Roslyn Layton, hosted a virtual panel: Let the Chips Fall at BIS? It was also stated that real men own fabs that can re-invent the future! At the European Commission (EC) conference, there was the inauguration of the EllaLink optical submarine cable linking the European and South American continents.
In July 2021, the Center for the Study of Presidency and Congress (CSPC), USA, and National Security Space Program, organized a session on building space capabilities over the horizon. Cadence Design Systems introduced the Cerebrus intelligent chip explorer to revolutionize intelligent chip design. Elon Musk spoke at MWC21 Barcelona how SpaceX was keen on landing people on Mars. Antler Southeast Asia introduced 14 new startups at its demo day. Asia Tech X Singapore organized a panel discussion on deep tech for global good, at the accelerateHER Asia. There was a panel discussion on planes, trains, automobiles and ships: satcoms-on-the-move.
Islam Salama, VP, Intel, discussed more than Moore and heterogeneous integration through packaging at Global Semiconductor & Electronics Forum (GSEF) 2021. Dr. Wally Rhines presented the strong growth in EDA and trends in semiconductor design ecosystem at the SEMI Innovation for a Transforming World. Marco Chisari, Bank of America, Merrill Lynch, presented golden age or short-term cycle for global semiconductor market. There was Ericsson, scaling with 5G and edge computing.
In August 2021, there was a very painful and shocking development. My eldest sister, Ms. Shukla Mukerjee, lost her battle with the dreaded cancer, leaving us extremely distressed. Meanwhile, Ericsson was unlocking potential of 5G for consumers. There was SIA’s session on modern hardware and measurable security. There was a panel discussion on monetizing satellite apps, new business model with innovative use cases in connectivity at the Satcom Industry Association (India) conference.
In September 2021, Vladimir Roznyatovskiy, Lux Research, presented innovations in emergent displays at SEMI, Strategic Materials Conference (SMC) 2021. Role of innovations enabling consumer AR technologies was another. Chuck Byers, Industry IoT Consortium, presented top 10 disruptive new technologies for industrial and IoT networks. SIA had a session on US semiconductor industry facing challenges, and historic opportunities. Xecs Eureka cluster showed support for RD&I in the electronic components and systems. NASA’s flight to Mars via Ingenuity was showcased at Sensors Converge 2021. Lip Bu-Tan, CEO, Cadence, discussed harnessing analytics for electronics industry renaissance. Future Horizons predicted the global semiconductor industry to grow 24.5 percent in 2021. Ms. Taguhi Yeghyan, Market and Technology Analyst, Yole Developpement, presented MEMS and CIS: lithography and bonding equipment market state and outlook, at the Connecting Heterogeneous Systems summit, organized by SEMI Europe.
In October 2021, EMSNow India was launched, carrying my article on how the Indian electronics manufacturing is in a boom period. My blog was featured alongside Forbes and BusinessKorea on China Tech Threat! My thanks to China Tech Threat. SEMI organized a session on challenges in metrology and analysis for next-generation semiconductors.
CASPA, USA, discussed the semiconductor chip shortage, impact, and solutions. Ms. Carlista Redmond, CEO, talked about how RISC-V means an open era of computing! At MEMS & Sensors Executive Congress (MSEC) 2021, iSono Health gave an update on the increasing access to breast cancer screening. European Technology Platform for High Performance Computing (ETP4HPC) organized a session on how EU HPC centres are transforming industries. Yole Developpment, France, organized a conference on supply chain disruption and other MCU market trends.
SIA had a panel discussion on race for semiconductor supremacy: China vs. emerging democratic technology alliance. Indian Space Association (ISpA) was formally launched October 11, 2021. Tech women in space paving way for next generation was organized by Satcom Industry Association (SIA) India. Hydrogen producer, Lhyfe, from city of Nantes, France, started producing green hydrogen for life from seawater. Challenges in metrology and analysis for next-gen semiconductors was discussed at a SEMI conference. Indian Space Association (ISpA) announced its launch.
Following the USA’s Chips for Americas Act, now, Europe also joined the bandwagon with its Chips Act. EU is home to leading global semiconductor research institutions, such as IMEC in Belgium, CEA-Leti in France, and Fraunhofer-Gesellschaft in Germany. The US Chips Act also calls for the creation of a National Semiconductor Technology Center (NSTC), and an advanced packaging research institute.
SEMI, USA organized the Global Smart Manufacturing Conference 2021, where digital twins and software-defined manufacturing were discussed. SIA, USA organized another conference on catalyzing US semiconductor design ecosystem. This was followed by CAR-SEMI conference on chip shortage impact on automotive. The month closed with the state of AI in Estonia, and Global Semiconductor Alliance event on future of automotive computing: cloud vs. edge. Also, Semiconductor Research Corp. (SRC) and SIA discussed new trajectories for communication.
My article: It takes pure brains to work in semiconductor industry, generated lot of interest in Nov. 2021. EV World Congress 2021 looked at rEV index accelerating EC adoption. The cities of Madrid and Helsinki continued to ride ahead with e-mobility and EVs. At SEMI, USA conference, the global semiconductor market was predicted to cross $600 billion in 2022. Another session tried to address what’s behind the chip shortages, and what’s driving the current semiconductor markets?
December began with SEMI’s future of computing in 2040. At, Semicon West 2021, there were some interesting sessions. Rick Bergman, AMD, spoke about innovation beyond Moore’s Law: new era in gaming graphics. Kai Beckmann at Merck talked about shaping the future of electronics. VLSIresearch, presented on the state of the semiconductor market in 2022. Nanotronics unveiled the nSpec Turbo inspection tool at Semicon West 2021.
Next, SRC-SIA looked at the new trajectories for memory and storage. DVCon India 2021 looked at whether respins were a fact of life. The year closed out with Leti’s devices workshop in France, which looked at semiconductor solutions to speed up telecom revolution. There was a session on innovative BAW filters for 5G sub-6GHz. How I miss electronic components! I was probably the best editor at Global Sources for electronic components, visiting Shenzhen, Taiwan, etc., multiple times.
There you go! Let us hope that the semiconductor chip shortage will finally go away this year, and the semiconductor industry continues its onward march in 2022. We may get to hear more about FHE in the coming year. Perhaps, Tesla will come up with new factories, pursue energy and software, and grow even bigger.
Development and key technologies of floating solar
Solarplaza organized a conference on floating solar today. Kane Wang, Director of the System Solution Department at Sungrow, said the development path is crucial. Sungrow has completed CPIA, or high density polyethylene floating body for PV power system on water. New application of floating solar includes those at Guqiao, Yiyang and Guidang in China, along with Taiwan, Thailand and Malaysia.
The offshore floating solar project is worth 180MWp offshore project in 2020. For the hydropower and floating solar, Sungrow has 2.5GWp+ of floating solar and 300KWp+ of hydropower and floating solar. There are key technologies of floating solar, such as wave impact. There have been wave breaker experiments. The material is corrosion resistant for 16 years in practical environment.
Anchoring design is for wind tunnel research, which includes wind load and shelter factor. There was current load simulation conducted. They have done coupling analysis for the floating system. Offshore floating is similar to nearshore. The maximum height of waves it can maintain for offshore solar is about 1 meter. They are researching for 2-meter high waves. Floating PV in winter conditions have been applied in several projects, especially in North Japan and North China, at approximately -40 degrees C.
2nd generation floating PV
Benedikt Ortmann, Global Director Solar Projects at Baywa r.e., presented the second generation of floating PV technology and levelized cost of energy (LCoE). It has a track record of over 3,000MWp realized worldwide, and is a European market leader in floating PV. They want you to co-develop with them in your area/country.
The choice for lakes/water bodies are that there are no offshore applications, no nature or protection zones, etc. There is great potential in places such as Germany of over 20GWp, France over 15GWp, Spain over 35GWp, and Italy over 16GWp. We need a new generation of floating PV is due to the fact that the installation cost or capex is higher than on a ground-mounted plant. The opex is lower than ground-mounted plant. The longer the generator can operate, the closer the LCoE of both, ground and floating PV technologies.
BayWa.r.e floating PV solution has direct water contact footprint, stable walkaways and integrated DC cable concept for fixed and protected cabling, less impact against wind, etc. It has moved to a floating PV park. Its floating transformer station has electrical standard concept with certified floating transformer station brought on the water. Special aluminum floater with integrated cable ducts and water sensors, integration into the floating-PV system with protected cables under the walkways, etc. There is stable walkway for operations and maintenance.
The first generation of floating PV was systems with one floater for each PV module that led to impeding the circulation of water. There were no paths for maintenance and cleaning. There was also no professional cabling for long lasting operation. There was also no reliable static calculation possible.
Anchoring is a key expertise of BayWa.r.e. Concept depends on lake properties, such as surroundings, soil quality, lake requirements, water height deviation, etc. There are different concepts, such as on-shore anchoring around the system, near shore anchoring, etc.
There have been lessons learned during the project Nij Beets. The FPV park had drifted. The company uses permanent anchoring lines from day one. Proper anchoring requires proper equipment. You need to choose the right technology.
Energy data management and revenue reporting challenges when managing PPAs
Solarplaza International organized a webinar titled Energy data management and revenue reporting: Challenges when managing PPAs in big portfolio.
The presenters were Mario Schirru, Executive VP Operations and IT, Encavis, and Luca Pedretti, COO and Co-founder, Pexapark. The session was moderated by Alfonso Barrenecheam Project Manager, Solarplaza.
Mario Schirru, Encavis, discussed the energy data and revenue management challenges faced by large, renewable asset portfolios. Encavis has 192 solar parks and 86 wind parks across 10 European countries.
Challenges with multi-country portfolios
Luca Pedretti, said Pexapark is a 3-year-old company, supporting power purchase agreements (PPAs) worth 10+GW, and 3+GW assets monitored. Revenue is equal to fit-in tariff (FIT) into volume.
Talking about the challenges with large multi-country portfolios include no timely and granular consolidation all revenue figures, no ready access to normalized energy data series, no transparency on underlying costs, control required over revenue and energy sales performance, and there are elaborate semi-automatized, and person-dependent reporting systems.
Possible pitfalls include transparency on revenue performance derived from monthly reports without direct access to underlying commercial data, all revenue analytics are on one-off works, many ad-hoc requests from central management to local asset manager, task duplications among local asset managers, most tasks are people-based and manually-operated, no central oversight on PPA management, etc.
Get in data early enough!
Schirru added there are different agreements for an asset. There are about 500 agreements in place for Encavis. There are multiple data points and agreements. Volume is important! You also need to look at different data sources. The challenge is to get the data in early enough. It is also important to forecast what will happen. This requires lot of excel worksheets, and fully automatized processes in the background. It depends on the countries, as well. You need to wait for 5-6 days for collecting data and revenue reporting.
The very first objective is to save time, and keep the asset managers free from for value-added activity. Forecasting is very important for Encavis. You want to know where we will be lending, how much is our asset worth, what price are we selling energy, etc.
The ability to simulate these scenarios quickly is very important. Management awareness is key. You will have increasing assets that are PPA-based. Some positions also have to be actively managed. You have to manage the top line.
Encavis is automatizing the top line of figures. It is aggregating and integrating all the systems to have a transparent flow of data. There are challenges of storing and handling the data, as well.
Pedretti added there are various data point to handle. Every country has operators, and so, it is important to get data, hourly or otherwise.
BNEF London 2020 summit calls for green recovery
The BloombergNEF London 2020 Summit commenced today. Ms. Dana Perkins, Head of EMEA, BloombergNEF, was the summit anchor.
Delivering the opening keynote, Jon Moore, CEO, BloombergNEF dwelt on: how did the idea of modern art relate to the idea of energy transition? There are announcements that California is to ban new gasoline cars by 2035. China has vowed carbon neutrality by 2060. The majority of many national populations thinks that the global climate change is a major threat.
There was the Tesla electric motor. It has become a household name now. We are moving to a new era of clean, green energy. Renewable power generation additions will increase. Passenger electric vehicle sales will rise 3 percent soon. Li-ion battery demand will increase in the next decade.
Europe’s housing stock is in need for efficiency. ACs will be a significant efficiency opportunity. Sector electrifications will improve hard-to-use segments. Efficiency gains and natural gas are powering China. Hydrogen will be a multi-decade growth sector. Rising petrochemical demand is also an opportunity for recycling.
Focus on hydrogen
Thomas Bohner, CEO, Mitsubishi Power Europe GmbH, added that this year has been difficult. The impact of Covid-19 is yet to be fully understood. The share of renewable energy has been increasing. Hydrogen availability is also very important.
As the International Energy Agency has said, there is momentum building. We are pushing for carbon capture technology. We are testing CO2 capture for marine. We did some studies. On waste heat recovery, there should be five years for profitability.
The energy prices are changing. The biggest opportunities are in converting to hydrogen. There are fuels that can go into chemicals. All gas turbines remain great assets. They are also hydrogen ready. Hydrogen is a clean energy source that does not emit CO2 upon combustion.
The accelerated introduction of IT, continued economic development in emerging nations, and a forecast for increased demand, plus reliable technology for control of the highly flammable element, make hydrogen power generation—clean and abundant—a viable alternative.
Delivering green recovery
There was a a panel discussion on delivering green recovery: What will it take to build back better?
Ms. Nancy Saich, Chief Climate Change Expert, EIB, said that we have remained focused on our goals. We are facing a critical decade. We need to try and solve the problems. In a green recovery, we need to address a lot of what will solve the issues. You also need private finance. We are also working on taxonomy, etc. We have set up a target by 2025. It is a signal to other players. We will also be making sure we will be funding many other objectives. We will be publishing our climate roadmap soon.
Ms. Laurence Tubiana, CEO, European Climate Foundation added that it was worrying to see so much turmoil. There was delay in moving to green transition. It was better to encourage the green transition. China has vowed to go carbon neutral by 2060. The support of the European citizens has seen a push for green recovery.
Paddy Padmanathan, President and CEO, ACWA, said that they had to quickly re-organize due to Covid-19. There was an enormous amount of convergence on what we need to do. We need to come up with carbon neutrality, and resilience of resources, etc. This requires decisive action.
Adair Turner, Chair, Energy Transitions Commission noted that we need to decarbonize the electricity system by 2035-40. We should also decarbonize some parts of our economies. There may also be a role for hydrogen, such as synthetic fuels, etc. We need to think about deep decarbonization, electrification, and hydrogen.
The EU’s focus is on green hydrogen. There is need for hydrogen electrolysis. It will make hydrogen an economic policy. On electrification, there is support program for the automotive industry. The subsidies for new cars are electricity focused. New sales of internal combustion engines (ICE) should be prohibited. Electrification of our economies are so deep. We need to electrify the economies.
The BNEF London 2020 Summit continues tomorrow.
India driving clean power revolution!
BloombergNEF recently presented on India’s clean power revolution. Ambitious targets, comprehensive government policies and economics have placed India among the most vibrant clean energy markets in the world. As the energy transition accelerates, this decade brings new challenges and opportunities for all the actors in India’s clean power revolution.
In 2015, India announced a target of building 175GW of clean energy by 2022, a more-than-fourfold increase in installed capacity in just seven years. By 2030, Prime Minister Narendra Modi wants India to reach a new goal of 450GW of renewables.
Integrating such volumes of variable generation will require a flexible power system. Apart from battery storage and peaker gas plants, lessons from around the world highlight the importance of demand-side measures, grid investments and market reforms for India. It is the world’s largest and most competitive clean energy auction market, allowing it to procure some of the cheapest renewable power. New auction designs now allow the replacement of fossil fuels through better integration.
Transformation of power sector
The transformation of India’s power sector in this decade brings a $633 billion investment opportunity. Capital is needed to build more power plants, and also to replace and expand grid infrastructure. Public and private finance will need to mobilize to deliver these investments.
Accelerating deployment calls for better co-ordination on land issues to ensure that grid availability matches the commissioning of new power projects. Simplifying land acquisition procedures and digitizing land records would remove a bottleneck affecting the sector today.
The financial health and resiliency of power distribution companies will also need to be improved to give investors’ confidence that they will not face payment delays and retroactive contract negotiation. Procurement of clean energy by corporates looking to reduce their costs provides an opportunity to offer alternative bankable offtakers for clean energy project developers.
The continuation of India’s clean power revolution is critical to global climate efforts. Coal’s role in the mix will continue to drop despite rising power demand. Retiring older coal plants will improve utilization rates for the coal fleet and significantly reduce CO2 emissions.
New clean power generation will help India avoid more than 499 million tons of CO2 emissions a year by 2030, and bring peak emissions within reach in the next decade. The 2030 target brings momentum to the goal of capturing more value from the transition domestically, spelled out in the ‘Make in India’ strategy. The wind sector has already seen leading equipment manufacturers open factories to supply the national and international markets.
Largest renewables auction market
Shantanu Jaiswal, BNEF said that India has adapted rapidly to the changes. There are findings relevant to the developed and developing countries. India’s power demand grew by 50 percent on the last decade. Coal was the dominant fuel. Annual renewables additions surpassed coal, and are increasing their share in the generation mix. Coal power is also losing share to renewables. There are record volumes of auctions and competition, that has driven down tariffs. India has also emerged as the world’s largest renewables auction market, cumulatively, till 2019.
India’s renewables are among the cheapest in the world. Policies have helped renewables become cost competitive, created demand and attracted investors. India has also become the most attractive emerging market for clean energy investment. India now has 65GW has new renewables capacity built. It has $50 billion in asset financing for clean energy.
India’s power demand continues to rise, due to an expanding economy and growing population. In 2019, the country consumed 1,285TWh, up from 851TWh per year at the beginning of the decade. India has become the world’s third-largest power consumer, behind China and the United States.
Even as power demand was expanding, the supply deficit narrowed from 79TWh in 2010 to 6TWh in 2019. This was a result of rapid expansion of generation capacity, fast rollout of transmission and distribution infrastructure, and the connection of millions of people to the grid. India’s power demand grew by 50 percent in the last decade. Households and industries are the top power users.
The domestic and industrial consumers together constitute 56 percent of power demand, followed closely by agriculture. In March 2019, the government achieved 100 percent household electrification. The next goal is to deliver uninterrupted, 24×7 power for all. In June 2015, the federal government had set target to have 175GW of renewable generation capacity installed by 2022. Of these, solar PV’s target was 100GW, followed by 60GW wind, 10GW biomass and 5GW small hydro. Looking further ahead, the Prime Minister envisions 450GW of renewables by 2030.
India’s power demand rising
Rohit Gadre, BNEF, added that India’s power demand is expected to grow by 80 percent in the next 10 years. Covid-19 slowed the power demand growth by 36 percent, but not the energy transition. Share of the renewables went up, post the lockdown.
New auction designs force renewables to compete against dispatchable coal. There are IPP strategies to keep tariffs low at the new types of auction. India’s power sector presents a $633 billion opportunity over the next 10 years. Development of the grid and renewables projects calls for co-ordination on land issues.
There is need for co-ordination among the stakeholders for the transmission grid and renewables. Economics and sustainability have made a case for the early coal retirements. A clean energy future is an opportunity to step up the ‘Make in India’ initiative. The next generation of India’s power sector transformation is $410 billion investment opportunity.
Looking back over 2010-2019
In the last decade, India’s power demand has grown by 50% and installed capacity has more-than-doubled. Although coal plants remain the top supplier of electricity, their utilization and share in the generation mix is declining. Since 2017, annual additions of renewables have outstripped coal. Three factors explain this shift.
- A focus on cost made India the world’s largest renewables auction market at the end of 2019. The massive auction programs have allowed Indian developers to optimize their projects, and have attracted private sector investment. Levelized auction tariffs in India are among the lowest in the world.
- Solar and wind have been the cheapest sources of bulk power generation in India since 2018. The success of auctions, and falling equipment prices globally, have made wind and solar cheaper than new coal plants on a levelized cost of energy basis.
- The government complemented its goal for 175GW of renewables by 2022 and its auction programs with policies that have given a wide group of investors, national and international, private and public, the confidence to commit for the long term.
Next decade
Now, India plans to reach 450GW by 2030. India’s auctions are taking renewables closer to 24×7 power. The newer types of auctions will force the renewables to match coal plants on dispatchability.
- The 450GW renewables future will need a flexible power system to manage daily and seasonal variation. Global best practices serve as a useful guide in achieving this.
- The power sector’s growth offers a $633 billion investment opportunity across generation and grid networks. Different sources of capital need to be mobilized to finance these needs.
- The acceleration of renewables will be aided by reforms that address two issues – improving the financial health of discoms and better coordination between stakeholders on land acquisition.
- Economics and sustainability make a strong case for early coal plant retirements, but this will need the government to play a proactive role.
- India’s strong demand for renewables equipment provides a reason for ramping up domestic production, in tune with the Prime Minister’s Make in India initiative.
India’s power demand is expected to grow by 80 percent in 10 years. Demand projections in NEO and CEA follow similar trajectory. There are eight areas of focus to get to the 450GW of renewables. These are: the evolution of auctions, increasing system flexibility, scaling up investments, preparing the grid, co-ordinating land acquisition, addressing discom finances, managing coal retirements and stepping up manufacturing.
India can draw on the global best practices to ramp up its system flexibility. Corporate PPAs are emerging as a new source of clean energy supply.
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