Solar can contribute 10%-13% to India’s grid power supply by 2024: Dr. Tobias Engelmeier Founder and Director, BRIDGE TO INDIA

Tobias-Engelmeier-327There is no doubt that the Indian energy industry (much like other industries) is currently undergoing a phase of massive change.India’s power requirement has been growing at a CAGR of 5.2% for past seven years.[1]Applying the past growth rate to the future, BRIDGE TO INDIA estimates the power requirement in India by 2024 is likely to be 1,748 TWh.Solar and wind contributed 17% of total generation in 2013[2] in Germany.The contribution of solar is still minimal (0.5%) in our energy mix. Solar sector today needs a boost to help meet the growing power needs of the country.Under the assumption of continuous improvements in grid management in India, we estimate that solar could contributeto the tune of 10%-13% oftotal power generation by 2024, without destabilizing the grid. Consequently, the realizable solar potential in India is in the range of 110 GW to 144 GW by 2024.[3]For further details, please refer to ‘India Solar Decision Brief’ titled- “India’s Solar Transformation: Beehives vs Elephants” (online downloadable version available here).

Figure 1: Realizable potential for solar power for each individual scenario

core sector 4.12.14For our estimation of the realizable potential, we took to generation rather than the capacity data, because otherwise we would have to make a number of assumptions on the composition of India’s power mix in 2014 (and the related CUF). I.e., the IEA projection for installed capacity is based on power mix assumptions (and a related average CUF of India’s power plants to meet the power requirements). If we assume a significantly higher share of solar with a lower than average CUF, the total installed capacity would have to be much higher to meet the same power demand.

This realizable potential has been split into four distinct grid-connected solar plant types (non grid connected solar has not been considered here and is not limited by any grid ceiling factor). We have considered five exclusive parameters for understanding how much solar capacity each type of plant could provide until 2024. A rating has been given to each factor on a scale of 10. A rating of 10 implies that the parameter is most favorable for that particular scenario.

Table1: Expected share of realizable potential by 2024 for each scenario

Parameter Small rooftop Large rooftop Utility scale Ultra-mega scale
Timeframe of parity 1 8 6 5
Execution challenges (individual system/plant level) 10 7 6 2
Ease of policy implementation 3 5 10 7
Ease of raising debt financing 5 8 9 8
Transmission and grid stability constraints 10 6 4 1
Total rating points 29 34 35 23
Market share 24.0% 28.1% 28.9% 19.0%

 

We weighted every factor equally (1/5th). The numbers and the weightage can, of course, be debated. So far, only the utility scale projects are a proven business model in India with some level of predictability. The other three are still being developed. We are only too aware of the difficulties of making predictions in solar in India. However, the main point is that the four segments are roughly equal in potential and importance and that building 25 GW of each in ten years is quite feasible.

We estimate the realizable potentialat 26-35 GW, 31-41 GW, 32-42 GW and 21-27 GW for small rooftop systems, large rooftop systems, utility scale projects and ultra-mega scale projects, respectively.

 

[1] CEA LGBR report from 2008-09 to 2014-15

[2]Fraunhofer Institute, Electricity production from solar and wind in Germany in 2013, http://bit.ly/1ktSgCk

[3] Average Capacity Utilization Factor (CUF) for solar plants in India is assumed to be 18.2% (mix of small and large plants)

Dr. Tobias Engelmeier founded BRIDGE TO INDIA in 2007, as a strategic environmental consulting company, based in New Delhi. Since then, his focus has been on developing strategic business models for international companies looking to enter the Indian solar market. Tobias has had a very strong affinity for India for a long time and feels that this is a very interesting time to be in this country, where enormous challenges meet with talent, technology and capital. He is deeply concerned about the resource use of this rapidly growing economy and believes in finding India-specific models to cope with this. He is the lead partner for the Technical University of Munich in a long-term research project on “Adapting Renewable Energy Products to the Indian Market”. Tobias is also very interested in governance structures in India and their impact on market developments. He regularly liaises with the key political decision-makers. Tobias was awarded a doctorate in political science from the South Asia Institute of the University of Heidelberg, Germany for his thesis on the relationship between identity and strategy in Indian politics. Prior to his doctorate, he worked for a leading strategic management consultancy. During that time, he advised large European utilities on how to engage with the fast-rising market for renewable energies.

Tobias.engelmeier@bridgetoindia.com

Twitter: @TEngelmeier