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Report

Concentrated Solar Power

Heating Up India’s Solar Thermal Market under the National Solar Mission

Arunabha Ghosh
September 2012 | Renewables

Suggested Citation: Natural Resources Defense Council and Council on Energy, Environment and Water. 2012. Concentrated Solar Power: Heating Up India’s Solar Thermal Market under the National Solar Mission. New York; New Delhi: Natural Resources Defense Council and Council on Energy, Environment and Water.

Overview

This report, in collaboration with the National Resources Defense Council, analyses Phase 1 of India’s National Solar Mission. It focuses on grid-connected solar PV projects, and highlights the importance of a robust solar ecosystem to realise the objectives of the Jawaharlal Nehru National Solar Mission (NSM). The findings and recommendations in this report intend to strengthen the development of the concentrated solar power (CSP) ecosystem, to help make India’s immense solar potential a long-term reality. The report was preceded by an interim report, ‘Laying the Foundation for a Bright Future: Assessing Progress under Phase 1 of India’s National Solar Mission’.

Key Findings

Phase 1 of the concentrated solar power projects

  • Of more than 60 CSP bids received during the Mission’s inaugural auction, the Ministry of New and Renewable Energy (MNRE) selected seven projects, totalling 470 MW.
  • Equal project allocation between the two solar technologies played an important part in kickstarting the CSP market.
  • In order to encourage CSP project growth in the midst of falling PV module prices, both the central and state governments must continue to strongly support CSP technologies.
  • There is a need for stronger policy measures to spur transformative CSP technologies. Two technologies that give CSP transformative potential are thermal energy storage and dry-cooling.
  • Some developers struggled to find a sufficient number of adequately trained technicians with fabrication and welding skills for CSP projects.

Resource assessment and finance

  • No CSP plant under the Mission has been financed on a non-recourse basis. The government must help to ensure that non-recourse lending develops.
  • Enforcing renewable purchase obligations (RPOs) were necessary to meet NSM targets. Therefore, making a state’s receipt of central funding contingent on having RPO enforcement policies in place could help to achieve this goal.
  • The sector lending limits and increased competition for power sector financing were bottlenecks to financing renewable energy projects.
  • CSP projects need information on direct normal irradiance (DNI) rather than global irradiance data that PV plants rely upon.

Sustainable technology choices

  • CSP storage presents an opportunity for 24-hour clean energy power supply. Using CSP, storage of solar thermal energy is more efficient than electrical storage of electricity generated by wind and solar PV systems.
  • CSP plants can be combined with new or existing conventional coal or gas plants, thermal industrial systems, or with renewable sources such as biomass.
  • Heat transfer fluid availability has been a bottleneck for trough technology but is also an avenue for local research and development.
  • Water-cooled CSP systems are more efficient in converting solar energy into electricity. However, they have significantly higher water consumption compared to plants that use other cooling technologies, such as dry cooling.
  • The most suitable location for the CSP project is a frequently arid region with limited water supply such as Rajasthan where five of the seven NSM CSP projects are located.
  • These projects rely on the Indira Gandhi canal as their source of water and water supply shortages present a key risk to power generation.

Power plants and groundwater availability in Rajasthan

Power plants and groundwater availability in Rajasthan

Key Recommendations

  • Ensure that Phase 2 policies continue to encourage CSP technologies along with other solar technologies.
  • Enforce commissioning timelines for Phase 1 projects to avoid setting a precedent of leniency on delays.
  • Ensure that Phase 2 guidelines strike a balance between encouraging new players to participate and attracting experienced developers.
  • Coordinate with stakeholders to develop strategies to encourage non-recourse project financing in order to attract investment.
  • The Solar Energy Corporation of India (SECI) should facilitate a set of detailed case studies about key CSP projects highlighting financial viability and loan syndication.
  • Continue to facilitate the collection of DNI data and mandate data sharing by project developers.
  • Continue to analyse effective approaches to the enforcement of RPOs and the development of a renewable energy certificates market.
  • Incentivise the adoption of storage technologies in CSP plants and evaluate mechanisms to spur storage-enabled generation such as carving out CSP projects with storage under the NSM or longer NSM commissioning timelines for projects with storage.
  • Assess opportunities for hybrid CSP baseload plants with sustainably-produced biomass and other fuels and develop policy guidelines to encourage such projects.

CSP storage presents an opportunity for 24-hour clean energy power supply. Using CSP, storage of solar thermal energy is more efficient than electrical storage of electricity generated by wind and solar PV systems.

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