Lighting the way
You recently forayed into the solar rooftop segment. Tell us a little more about the project itself, the investments, and the challenges in implementing the project.
From building large scale ground mounted projects, Welspun Renewables’ EPC arm – Welspun Energy (WEPL) has successfully constructed three rooftop projects in record time. Cumulative 795kW capacity is reducing the institutions’ carbon footprint by generating 11,74000kWh annually. The projects have been set up to meet captive power needs of the Indian Institute of Technology (IIT) Kanpur – 192kWp, Ansal University – 100kWp and Medanta Medicity Hospital – 500kWp. Energy generated will help lower their thermal energy consumption, thereby reducing operating expenses.
Our expert engineers have designed these projects for optimal generation and global tier 1 solar technology has been employed for high conversion efficiency. The Ansal University project will power day-to-day activities of 2,000 users; 1,000 faculty members and students at IIT Kanpur will be using solar energy to teach/study and carry out their experiments.The Medanta Medicity project is built over two extended parking lots that can house over 300 cars at a time.
Rooftop is a burgeoning business in India. However, certain key challenges need to be addressed by the government to promote the sector:
1. There isn’t enough rooftop space to set up a feasible solar system. The area quantum has to be contiguous and large enough to make it financially feasible.
2. Most old structures have installed AC systems and pipe network on their rooftops. This leaves barely enough space to set up power systems.
3. Most of the old building weren’t designed keeping to take the extra weight of a typical rooftop project. If as a policy was mandated that new structures are designed keeping a rooftop system in mind, this issue could be effectively addressed.
4. Rooftop rights are a big question mark, if the building owner were to sell-off his property at a future date.
5. Especially in residential complexes, owners are still wary of setting up a project. Since it may involve remodelling of their rooftops. Awareness and promotional campaigns could help address this issue.
6. Net metreing policy once incorporated will be a big inducement for building owners to adopt solar rooftop projects.
At a time when India receives plenty of sunlight, we have been unable to deploy solar power to its fullest. What are some of the hurdles that stop the country from implementing more solar projects?
By bringing forth the solar targets to 2017 from previous 2022 year target, a much needed impetus has been provided by the government. We are already seeing a balanced holistic view towards the sector. However, for the success of the sector it is important that the challenges faced by power developers be addressed.
1. Separate sectoral limit and priority sector status for lending to solar energy. Solar energy should be made a priority sector and excluded from conventional power sector and has a different sectoral cap, such that banks are encouraged to lend to the sector.
2. Cheaper international funding required for development of solar project. Raising ECB limits, tax-free RE bonds, special infrastructure RE bonds, international long-term loans from multilaterals, bilateral and other international donor organisations to be explored and encouraged.
3. Ensuring payment security: Given the financial health of the discoms, default in payment to developers is seen as a critical risk by financial institutions. It is necessary to take constructive steps for allaying the fears of the bankers and ensure investments in the sector.
4. Allow launch of solar park financing vehicles (SPFV) to issue solar bonds and finance group of projects.
5. Group fund raising and financing options for solar projects, which can help reduce cost of funds and risk through pooling and scale benefits is currently unavailable. MoF should issue guidelines and policy framework for setting up SPFVs.
6. Make long-term foreign exchange hedging available at an affordable cost for RE project. Government should work with institutions such as the currency exchange fund (TCX) to identify how long-dated FX swaps could be deployed for RE in India.
7. Evacuation infrastructure: The project development cycle of solar & wind is six to eight months. Therefore based on the solar potential in the state the respective state government should develop evacuation architecture. This will ensure that as soon as the projects are commissioned the evacuation infrastructure is already in place and they are able to transmit the energy generated to the state grid.
8. Land Banks: Post assessing the solar potential of each state, government land banks should be created and allocated to the projects which are coming up in the state. Additionally, as solar and wind are non-polluting industries, these projects should fall under the non-agricultural land conversion exemption. For private land to be used for setting up solar power plants stamp duty exemption may be considered.
9. Renewable purchase obligations should be made enforceable for state distribution licensees, open access consumers and captive consumers of power. The sector is not witnessing the percentage increase in solar energy consumption to the degree it should have experienced. Without a legal enforcement mechanism for RPOs, India will not be able to make a steady and sustainable transition to green economy. Enforcement of RPO must for growth of RE sector.
10. There should be a consistent policy flow and bidding rules from central government to the state agencies. Additionally the solar tariffs should be fixed on the basis of the local conditions of the locations.
11. The clearance process for solar projects should be made much more simplified. Mainly for the reason that solar project are sustainable and do not emit any pollutants.
12. Solar PPAs signed between various agencies and the solar developers were based on the norms defined by the appropriate regulators/state nodal agencies. These PPAs should be considered sacrosanct for the entire tenure of the PPAs. The GUVNL action of reopening PPAs has dealt a severe blow to the confidence of both the lender and the developers.
What is your outlook for the power sector? What are some of the various types of projects that Welspun executes?
Year 2015 could be a strong year for the Indian economy. As mentioned earlier PM Modi has given a push to the industry by recognising it as a priority sector and assigning 100GW capacity target.
Doing away with the anti-dumping duty is a brilliant example that the government is laying emphasis on immediate need for generating clean energy on a much faster and sustainable scale. Since then a whole retinue of policy measures have been announced which will attract investments into the sector while addressing some of the key issues the industry has been facing.
Over 25 solar parks will allow solar developers ample opportunity to bid for large sized projects. The states are already proactively identifying land banks, thereby reducing acquisition cycle time. By setting up large capacities, the overall development cost goes down, thereby making the projects more viable for developers due to economies of scale. This positive trend could also lead to solar closing on grid parity.
While encouraging project developers to increasingly invest in the sector, a balancing emphasis has also been placed on indigenous manufacturing – the ‘Make in India’ campaign. Piyush Goel, minister of state with independent charge for power, coal and new & renewable energy, had announced that NTPC will be coming up with a tender for setting up of 1000MW of solar power projects in EPC mode by using cells and modules made in India. This will open up ample opportunities for domestic manufacturers. However, for continued growth they will have to scale up their operations as well as align their offerings to globally accepted quality standards.
Within this scenario Welspun Renewables is able to offer sustainable clean energy solutions for national as well as captive consumptions. We have pioneered solar power solutions, both in terms of plant size and total installed capacity. We have so far commissioned 328MW solar and wind. Our emphasis on systems and processes has enabled the organisation for flawless execution by consistently decreasing its on-ground development cycle. One of our projects the 151MW (DC) Neemuch solar power plant is one of the world’s largest and was developed eight months ahead of schedule. Our 55MW (DC) Phalodi solar capacity is one of India’s largest and is counted among the highest generating plants in the country. Simultaneously our wind portfolio will grow aggressively in the new year. We have started with our 126MW Pratapgarh which is well under development.
WREPL through its EPC arm has been offering specialist services to utilities as well as captive users by developing ground-mounted & rooftop solar projects for them. Given our expertise, this is one area which we are anticipating will see a major growth curve. Presently we are building Maharashtra’s largest 50MW solar project under the PPP model. As mentioned earlier, we have recently ventured into the solar rooftop businesses by commissioning three captive solar projects.
What are some of the innovations made by WEPL in Modified Module Mounting Structure for which you received recognition?
The Modified Module Mounting Structure is used for the installation of modules in solar power projects. We have been challenging ourselves by reengineering each practice to come up with the most effective way of setting up solar power projects. The modified module mounting structure is a great example of ingenuity by streamlining the structure than the usual industry design. Its simplified design, the need for training or technological expertise required also reduces, leading to faster commissioning of solar projects. Due to the innovations made, the project erection time gets reduced drastically with lower cost implications.