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Industry experts feel positive about Gujarat Solar Energy Investment Growth Story

Monday, June 29, 2009 0 comments


As the investment in past few months has been increasing, I was wondering whether is it only news or is there any development also happening? But this has been substantiated by a recent article in which corporate honchos from industry reflected their views on the Gujarat's solar energy development plans. 
In beginning of the year 2009, Gujarat Government had put forward the new "Solar Power Policy" as an incentive to spur an investment in Renewable energy, the present and future of energy industry.
According to Mr. Kaushal Shah, "Gujarat has tremendous potential of being a renewable energy hub, given its vast geographical resources including Wind Energy and Solar energy in northern part of Gujarat. All it needed was political support, and which is perfectly provided by Govt. of Gujarat in Solar Power Policy of 2009". Mr Shah is the Director of Business Development at Shree Ram Eco-friendly Energy Pvt. Ltd., a Joint Venture between Caritas International, USA and Shree Ram Group of Industries, Bhavnagar, Gujarat. 





According to Dr. Vithal Dhaduk, President of Caritas International, USA "We are pleased to have the opportunity to develop this 25 MW solar power project, on completion it will be the largest in size in Asia and one of the largest around the world, with one step closer to our mission of providing clean, affordable solar electricity. "

Adding to that, Mr. Mukesh Patel, CEO of Shree Ram Eco-friendly energy Pvt. Ltd. and Chairman of Shree Ram Group of Industries "The sheer size of the project helps us achieve economies of scale that are a significant factor in helping PV energy become competitive with fossil fuels and to be able to provide an increasing contribution to national renewable energy targets." 

It needs to be noted here that Shree Ram Eco-friendly Energy Pvt. Ltd. will own and operate the solar power plant and sell the electricity to GPCL under a 25-year non-escalating power purchase agreement. The project will deploy about 350,000 modules and will occupy about 200 Acres of land in Gujarat.
But, besides just producing clean electricity, the project will spur further investment in Gujarat, in renewable energy, create both technical and non-technical jobs, will boost local economy and will give Gujarat, a "brand" in global renewable energy world. Although, policy seems to be sound and clear enough to incentivize the investors to dig their pockets for projects, there are some reasons that investors are holding back:
    1. Government's co-operation on land acquisition would be the first step that would help investors' to be more confident about the investment. Given the nature of the solar power projects, it doesn't require land in or around the communities; it can be desert areas as well, which are not used anyways.
    2. Minimizing the risk, as the project taking place under this policy will be established for long-term, say 25 years.
    3. Education on the side of debt investor is very important. If we look at the model, that western countries have deployed, Germany and Spain has developed no. of institutional investor or commercial lenders, specializing in renewable energy projects.
Hopefully, things will change and "sun" will shine soon in Gujarat and other states of India, and thus revolutionize the renewable energy sector of India.
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Kutch all set to become Gujarat's Solar Energy Hub

Friday, June 26, 2009 1 comments

Investments in Gujarat's Solar Energy is increasing at a much higher rate than anticipated. It has not been even one month since Clinton Foundation's declaration of huger investments in Gujarat and it has already seen quite a bit of activity on positive side.

On June 24th 2009, Chief minister of Gujarat Narendra Modi announced his plans to turn Kutch district into solar energy hub of the country as the area witnesses bright sunshine for the larger part of the year. Quoting Mr. Modi, ""Seeing abundant sunshine in this region, I have no doubt that Kutch will become 'saur urja no desh' (hub of solar energy) in a decade, which will change the district's face further."


According to his speech, many industrialists were ready to come to Kutch to generate solar power, but did not name them. Stating that post-quake years had seen unprecedented, all-round development of the district, the CM said the Kutch of today was very different from the Kutch of past, when Kutchis had to migrate to earn their livelihood.

Mr. Modi inaugurated 71 new check dams on the occasion of New Katchi Year and praised Kutchis for successfully adopting drip irrigation system and setting an example of utilising scarce water in an effective manner.

It needs to be noted here that most areas of Kutch are barren with low agricultural activity. This would provide an area for large-scale implementation of Concentrated Soalr Power plants to be erected. The Government is already talking with investors but with one of the largest desert in India, can Kutch become next California for CSP plants in India.

What do you say?
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More investment in Gujarat Wind power - 100 MW Wind Farm by Indowind

Monday, June 22, 2009 0 comments


Great news coming our way in terms of Wind Energy in Gujarat. Gujarat is really picking up in terms of renewable energy investments. Chennai based Indowind Energy plans to infuse INR 100 crore to generate 30 MW of wind energy in the current fiscal.

However, it has proposed to increase its authorized capital to INR 200 crore from INR 65 crore by conversion of foreign currency convertible bonds, qualified institutional placement, preferential allotment to promoters and employees stock option, in order to raise funds for the expansion.



Indowind is in talks with the Karnataka government for additional land to increase its production capacity

Meanwhile, it has signed a MoU with the Gujarat government for setting up 100 MW wind farm entailing an investment of INR 650 crore. The government is yet to consider its demand for 3,000 acre for the project. The current trend of rising stock markets is also driving the market further.

Which factors do you think are critical in current time for renewable energy promotion?

Please post your comments as it would help me to understand my audience in a better way.

Jai Garvi Gujarat!
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Most-Awaited Solar Eclipse in Gujarat on July 22... Don't Miss it

Get ready for the most-awaited total solar eclipse on July 22. The eclipse marks the celebration of International Year of Astronomy globally. The Gujarat Council of Science City on Sunday kicked off a month-long Countdown Awareness Programme for safe observation of solar eclipse in the city.

As part of the programme, a workshop at GSC was organised on Sunday to orient amateur astronomers, science communicators and youth on the upcoming Total Solar Eclipse (TSE) to be seen on July 22. The total solar eclipse will last nearly four minutes in India and the sun will not be visible at all.

Solar Eclipse Belt for July 22


During the workshop, Vishnu Reddy of astronomy faculty at University of North Dakota, US, said, "The sky has no limit and boundaries. Anyone with strong interest and right type of training can explore the night sky and observe many fascinating asteroids, comets and novas."

"The geographical situation of India on the globe makes it an ideal place to explore astronomy and space," added Reddy. GSC has planned a series of activities to popularise the solar eclipse. The visitors to Science City will be oriented with the eclipse observation activity through workshops, interactive sessions with scientists, radio talks and hands-on activities to ensure that those interested can have a safe viewing of the rare celestial event.

On preparation for the eclipse day, senior scientist, GSC, Narottam Sahoo said, "We are spreading the science about solar eclipses to eradicate so called superstitions related to them prevailing in the society in our month-long programme."

The TSE on July 22 will be the longest one that will occur in the 21st century and will not be surpassed in duration for the next 123 years. Honorary scientist with Indian National Science Academy Prof Narendra Bhandari at Science City said every solar eclipse has been different and provides a variety of scientific stuff for study and future exploration.

Solar eclipse is a natural phenomenon and has some effect on birds, animals, plants, humans and the entire environment. Students should take up some scientific studies and spread the science of eclipse in the society, added Bhandari.

Source: Times of India
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PDPU Narendra Modi Speech

Recently, CM Shri Narendra Modi delivered speech during 1st convocation at Pandit Deendayal Petroleum University ( PDPU )and he said that "why cant we initiate and create an organization for solar energy, the day is not far when India will lead solar powered countries."


check the video at:


I feel that Chief Ministers from other states should also come up and form their state policies and replicate Gujarat's model.

Keep posting.
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Largest Solar Pond Project in the World

The largest operative solar pond project in the world is located in Bhuj, in the state of Gujarat. By maintaining distinct layers of saline water in the pond, solar heat is trapped within the water body. The brine then heats up water upto 70 degrees centigrade, to be used by a dairy to generate process steam. The dairy saves on fuel costs due to less burning of lignite, and the hot water is also used for washing milk cans.


Watch the video at:


This video would give a snapshot of what can be done in order to increase efficiency by any company.
This would also enable to reduce costs and earn carbon credits too.

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Gujarat State Wind and Solar Energy Policies

Tuesday, June 16, 2009 0 comments

As I have mentioned on many posts on my blog about investment-friendly Gujarat government’s policies, I intend to discuss the salient features of them over here.

In terms of tariffs, Solar PV and Solar Thermal would be charged at 0.3 $/ kWhr and 0.2$/kWhr from their 1st to 12th year of operation. After that it would be as low as 0.067 $/kWhr which would be one of the lowest rate of tariff in the world. The solar plant must have a life of 25 years in order to avail this rates. A wheeling charge of 2% would be applicable and the operations of plants should start within 2009 and 2014 to avail the benfits of this solar energy policy in Gujarat.


Incentives such as accelerated depreciation, tax holidays, exemption from electricity and excise duty will be provided to solar energy companies in Solar PV and Solar Thermal space.

Finally, sale of energy can be through GUVNL, distribution licensee and third party.

Hope this would help the companies to compare Gujarat state solar energy policies with other states and regions to make a wise decision for their investments.

Jai Garvi Gujarat!

Keep posting your comments to make this discussion productive.

Your comments..

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Gujarat Solar Energy Investment Opportunities

Gujarat promises a good market for solar energy companies due to favorable government policies and good solar irradiance levels. The various investment opportunities by solar energy sub-sectors are:


Power Generation:

Grid Interactive power generation with a phase-by-phase approach, which has found its place in state solar policy too

Retail:

Small-scale solar modules of Solar Thermal and PV devices can be sold at retail outlets with help from GEDA for household, institutions and corporate. The positive aspect of investing in Gujarat is, that people over there are already aware of benefits of solar as the solar thermal water systems and solar cookers have deep penetration in Gujarat. (I have both of them installed at my home too and they are working quite well since past 7 years)

Manufacturing:

With Tata Nano being manufactured in Gujarat, there are many more manufacturing hubs coming up. The government provides good opportunity for solar cells, modules, arrays for PV system manufacturers to start their production facility in the state.

R&D:

Gujarat possesses a good pool of engineering students in varied fields from IT, electronics and communications to Instrumentation and Fabrication Control engineering. Thus companies interested in solar R&D can start their knowledge centers in Gujarat for technological development of Solar Energy.

Jai Garvi Gujarat!

Keep posting your comments to make this discussion productive.

Your comments..

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Gujarat Renewable Energy Sector Attractiveness Matrix

As of today, in terms of installed capacity, wind energy leads in Gujarat. This is predominantly due to the very good policies formed in Gujarat way back in 2000s. The Gujarat government has lately introduced solar policy and also encouraging investments in bio-fuels.

As recommended, wind, solar and biofuels should be promoted in the first phase of development of renewable energy sources in Gujarat. Next bio-energy and MSW to Electricity. Finally, the newer technologies such as geothermal, tidal and fuel cells which are still the nascent stage.

Hopefully, the high sector attractiveness and current promotion of solar energy in Gujarat state will increase the investments and MWs installed till 2015.

There are number of projects coming up which justify the higher attractiveness of Solar Energy in Gujarat.

Source: CIIE, IIMA

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Gujarat Solar Energy and other Renewable Industry Enablers


Gujarat State policies are favoring the solar industry which is seeing an increase in investments in the sector. Gujarat government has been providing incentives such as accelerated depreciation, tax holidays and exemptions from taxes in the initial years of investment. This is likely to encourage companies entering in this space.

However, some of the questions such as which is the best alternative energy source, competencies in each of the renewable technology and the current level of efficiency drawn from the renewable sources often pose a threat to the development of the solar energy and other renewable sources in India, esp. Gujarat.

Hope the technology such as CSP and emerging technology of CPV are able to bring down the capital costs involved in setting up such a plant.

Source: CIIE, IIMA

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Gujarat Solar Energy Investment Boosters

Solar water heating systems and solar cookers near commercialization

- A Solar Water Heating System of capacity 54000 Litres/Day has been at Cattle feed Factory, Kanjari

Focus on Grid Interactive Power

- Gujarat Solar Policy; Max Cap at 500 MW; Min at 5 MW

- Reliance Industries and Euro Solar have approval of 5 MW each under MNRE’s generation based incentive scheme

Semiconductor Policy,2007

- 20%-25% capital subsidy (investment grant or interest subsidy) or equity participation or combination of both

- in units manufacturing solar cell, photovoltaic, storage devices

- with NPV of Rs INR 10,000 million ($208 million)

National Solar Mission, 2008

- Decentralized Distributed Generation

- Grid Interactive Solar PV power plants

- Back up Power for Telecom Towers (Base Transceiver Station)

- Roof based solar PV systems

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GERC drafts a new resolution to promote renewable energy sources

Sunday, June 14, 2009 0 comments



In order to boost renewable energy sources in the state, the Gujarat Electricity Regulatory Commission (GERC) has drafted a resolution under which the commission would be procuring renewable energy from various units to be set up under the state authorities.

GERC Secretary P S Shah said the commission along with the Gujarat Energy Development Agency (GEDA) will develop suitable mechanism for issuance of ‘Renewable Energy Certificates’ to promote use of renewable energy in the state and facilitate fulfilment of renewable energy obligation.

However, the prices of setting up the equipment for producing renewable energy is likely to be the biggest hindrance said various agencies involved in production and policy formulation in renewable energy generation in the state.

GERC officials said as per the resolution the renewable energy generator may inject power into the grid and will be paid for injection of generation.

On the other hand, each distribution licensee shall purchase from these units. The resolution states that eight per cent of the renewable energy would be procured by GERC for 2009-10.



GERC officials said around 6 per cent would be from wind energy, while 1.5 per cent would be from solar energy and about 0.5 per cent from other sources of energy. On the other hand, the projected estimate of procurement of the energy will increase to 9 per cent in 2011.

Vice-chairman of the Vadodara-based Centre for Fuel Studies and Research Ajit Kapadia said despite subsidies given by the state to procure renewable energy from various units in the states, the procurement tariffs are very less. 

Source: Indian Express, GERC

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Gujarat: All set to become one of the greenest state in India, attracting huge investments in Solar Energy

Gujarat has over Rs 80,000 crore investment lined up in solar energy and wind energy which is in-line with what I feel would be the next green-power state in the world. This would help it to be a model state for other regions in India as well. The governement of gujarat has planned to add around 7,000 MW of renewable energy in next three to four years.

Gujarat is already among the top four states using renewable energy, having an installed capacity of about 1,400 MW. According to a Business Standard's recent interview with Narendra Modi, he acknowledged that the state needed to focus on renewable energy, esp. solar to curb the global issue to Global warming.

The state government has recently come out with a separate solar power policy under which it proposes to purchase 500 MW of solar power every year at an agreed cost.

“The chief minister had set a target of 10% renewable energy for 2014. However, looking at the liberal policies in wind and solar power, and favourable investment and business climate, we would be able to accomplish it in 2-3 years, going by the response we are getting,” said a senior government official. This seems a bit over-optimistism but the way Mr. Modi has pulled up strings in Gujarat, this number could be also achieved.

In the solar energy segment, the state will see investments to the tune of Rs 45,000 crore.

Major Solar Investment Proposals in terms of capacity (MW)

Gujarat government also offers attractive tariffs of Rs 11 and Rs 13 per unit for solar thermal and PV cells, respectively. This tariff is given for a period of 12 years, after which a tariff of Rs 3 per unit is offered for another period of 13 years.

In wind power, the state currently ranks third but is aiming to overtake Maharasthra and Tamil Nadu in the next two to three years by generating over 5,000 Mw of wind power. “Tamil Nadu has touched 4,000 Mw, but has reached a saturation point. It can install only about 5,000 Mw. Currently, Gujarat has an installed capacity of 1,500 Mw,” a senior official said.

The state is expected to draw investment to the tune of Rs 40,000 crore in the wind energy sector. The players that are likely to sign MoUs include Sydney-based Abellon Bioenergy for a 1,000 Mw wind farm project with an investment of Rs 5,500 crore, Suzlon’s Rs 9,000 crore investment for producing 1500 MW, NTPC’s Rs 3,000 crore investment for 500 MW and Enercon’s Rs 3,500 crore project for producing 600 MW of wind power.

Source: Business Standard

Jai Garvi Gujarat!

Keep posting your comments to make this discussion productive.

Your comments..

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Gujarat Solar Industry Drivers

Saturday, June 13, 2009 0 comments

I think many of you who are reading this blog would be also interested in discussing what is driving the solar energy market. Frankly, there are many drivers, both at macro and micro level but still the market is not pushing as we had expected. Everyone nowadays puts the blame on "Global Recession" for lower rate of investments in solar energy sector. But some companies such as Suryachakra group, Tata and very recently the Clinton Foundation have planned a huge investment in Gujarat's soalr energy sector. This is definately going to reap them benefits as in such times we get labor and materials at a cheap rate compared to when the economy is doing well. Think about it.

The key drivers according to me are:

Demand for Energy

> The accelerated pace of industrialization creates a massive demand for energy and corresponding investment into energy generation infrastructure and capacity

> In the first 8 months of this year, at least 80% of electric power generation in India came from coal fired power plants

Economics

> Government policy has been to encourage cost reduction via the localization of Solar module manufacturing as well as awarding concession projects

Pollution Concerns

> India is beginning to address its serious pollution problem

> One solution has been to reduce the use of coal fired power plants which release tons of harmful carbon into the environment

Government Support

> The central government has supported Solar industry growth aggressively via ambitious targets for installed capacity as well as Solar power related regulations to incentivize growth in infrastructure

Environmental concerns

> Kyoto Protocol obliges members to reduce carbon emissions in light of the harmful effects of greenhouse gas on the global climate

> In newly industrialized countries, the main concern has been mitigating the pollutive effect of burning fossils fuels

> Solar power is the obvious alternative due to its minimal impact on the environment

Need for a stable, sustainable resource

> Demand for energy is predicted to be almost 60% higher in 20 years whereas the supply of fossil fuel is soaring

> Major concerns exist over the reliance on imports as well as unstable prices of non renewable energy

> Solar, on the other hand is an indigenous and unlimited resource

Commodity prices set to keep rising

> Average global industrial electricity prices have increased by 46% between 1998 and 2006, while average global household electricity prices have increased 42% over that time

Dramatic fall in cost of Solar energy production

> The cost of Solar energy has more than halved over the last 20 years(1)

- In the early 1980s, when the first utility-scale PV modules were installed, Solar-generated electricity cost as much as 60 cents per kilowatt-hour. Today, state-of-the-art Solar power plants can generate electricity for less than 15 cents/kWh(2)

> This cost is comparable to that of non renewable resources, especially after factoring the external costs of fossil fuel energy

- e.g. new coal energy production costs approximately 5 – 9 cents per kwH

Significant improvement in technology

> Capacity, efficiency and visual design of Solar PV modules have improved dramatically

> A modern Solar Module is not only space efficient, but produces 20 more times electricity than what was available 20 years ago

Jai Garvi Gujarat!

Keep posting your comments to make this discussion productive.

Your comments...

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Indian Solar Energy Current Scenario and Estimates

The Indian government has committed to Solar energy targets of 20 GW by 2015 and 200 GW by 2030
- 2015 target of 20 GW represents a CAGR of 62% from 2008
2030 target of 200 GW represents a CAGR of 20% from 2010


This will be further driven by the fact that 
cost of Solar energy production is falling to levels comparable to that of non-renewable alternatives such as coal

New Energy Finance, an industry research resource estimates that the Solar energy sector is expected to exceed the 2020 government set targets by 50%

Today, renewable energy in India is a $600-million market growing at the CAGR of 15% annually. India ranks fifth in the world in 
renewable energy capacity. Its renewable energy target for 2030 is 200GW, up from its current 8GW. The goal will require an estimated $200 billion capital investment. 

Additonally, the renewable energy sector in India is expected to receive $US180 billion of public and private investment by 2020 and exceed government set targets for capacity. 

Lets hope that all the projections and estimates turn into real numbers by 2015 and 2030.. Or else as everyone say, "it's only a number"

Jai Garvi Gujarat!

Keep posting your comments to make this discussion productive. 

Your comments...


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