"India is the market of first choice for solar industry"

MNRE secretary Deepak Gupta speaks to Governance Now

sweta-ranjan

Sweta Ranjan | March 15, 2011




Since his appointment as secretary in the ministry of new and renewable energy in July 2008, Deepak Gupta, an IAS officer of Jharkhand cadre (1974 batch), has been striving to create awareness among the masses about solar energy. He cherishes the dream of “Gaon gaon bijli, ghar ghar prakash, akshaya urja se desh ka vikas” (electricity in all villages, light in all homes, progress and growth of the nation with renewable energy). Rural electrification is his pet project and he is also among the key drivers of the ambitious solar mission. In an interview with Sweta Ranjan, Gupta discusses plans of and challenges before his ministry. 

The solar industry is in its infancy. What are your ministry’s plans to meet developmental challenges in terms of capacity building?
India has a vibrant solar industry for manufacturing solar cells and modules and also for solar thermal collectors for water heating applications. The Indian solar industry exports products to various countries including in the EU and US markets. I am sure that as the domestic demand increases the local industry will see India as the market of first choice.

As power is a concurrent subject, which initiatives do you expect from the states in order to implement the solar mission?
In order to kick-start the process NTPC Vidyut Vyapar Nigam (NVVN), the trading subsidiary of National Thermal Power Corporation (NTPC), has been identified as the nodal agency for the purchase of 1,000 MW capacity of grid solar power (connected to 33 KV and above grid). NVVN will buy solar power from the project developers at a tariff fixed by the Central Electricity Regulatory Commission (CERC). NVVN will sign a power purchase agreement (PPA) with each project developer at this rate for a period of 25 years as fixed by CERC.

For each MW capacity of solar power for which PPA is signed by NVVN, an equivalent MW capacity of thermal power shall be allocated to NVVN by the power ministry from the unallocated quota of NTPC stations. Thus, for every unit of solar power, four units of thermal power will be sold by NVVN to the utility. The utilities shall be allowed to adjust the purchase against their renewable purchase obligation (RPO) for renewable power. The states are excited and motivated at this unique arrangement. They shall ensure timely payments to NVVN when they start receiving the bundle power. Also, required investments in transmission equipments should be made in time.

For fulfilling rural requirements your ministry has talked about promoting off-grid applications. What specific applications are likely to be promoted? Is there a timeline for these initiatives? How will the government promote these applications? Will it involve local entrepreneurs?
The mission will support off-grid solar applications for both rural and urban needs. In the first phase the mission will consolidate the ongoing initiatives and also promote development of new initiatives and business models. A number of applications, such as solar water heating, solar lights, diesel replacement systems, power for remote villages and power for rural telecom systems have the potential to expand very fast. However, this can happen only with the participation of a large number of stakeholders including local entrepreneurs, NGOs and government agencies.

What is the progress in the Remote Village Electrification (RVE) programme?
By October 2010, around 11,000 remote un-electrified census villages/hamlets had been sanctioned support for coverage under the RVE programme through renewable energy since the inception of the scheme.

Some states complain that they are forced to subsidise solar power through the bundling scheme as the bundled price would be higher than what they would have normally paid for the unallocated quota. Have you received any communications from the states in this regard?
The unallocated power is not available to the states directly. Through bundling additional power is being made available. In fact, many state governments want us to sanction more solar power in their states under this arrangement.

The industry perception is that solar thermal technology, unlike solar photovoltaic technology, is not proven yet. But the policy seems to be putting emphasis on solar thermal. Why?
The policy is technology neutral. The mission would like both thermal and photovoltaic technologies to be developed, manufactured and deployed in the country. However it is not correct to say that the solar thermal power generation is not a proven technology as a large number of projects have been set up in the other parts of the world. Under the mission, we will offer fair opportunities for both technologies to be developed, especially in the first phase.

Thereafter, the technologies will have to compete with each other to achieve grid parity as early as possible.

How is the waste-to-energy scheme progressing?
The waste-to-energy programme is expanding with over 20 projects of about 35 MW capacity expected to be set up during 2010-11. Although the projects based on municipal solid waste (MSW) are not taking off due to lack of proper waste management and non-implementation of MSW rules, the programme is growing in the areas of urban, industrial and agricultural wastes and residues. Besides waste-to-energy projects in the starch, distillery and poultry sectors, developments are also taking place in the areas of other urban wastes and agricultural wastes/residues.

What policy changes are planned to attract investments in this sector?
The waste-to-energy programme, among other things, aims at creating an attractive financial and fiscal regime for independent power producers to set up projects. Besides central financial assistance, provision also exists for concessions in custom and excise duties. State electricity regulatory commissions are also considering petitions for preferential tariffs for purchase of power generated from such projects.

Business meets and workshops are being organised for dissemination of information on techno-commercial aspects of waste-to-energy projects which are under installation.

Work on research and development projects for developing advanced refuse derived fuel gasification systems is in progress at the Indian Institute of Science, Bangalore, for adapting the clean technology of gasification for energy recovery from municipal solid wastes. This project will, among other things, include setting up of a full-scale demonstration project of 250 KW capacity.

What are the steps your ministry has been taking to achieve its wind power target for the 11th plan?
The government is promoting commercial wind power projects through private investment in wind potential states by providing fiscal incentives such as 80 percent accelerated depreciation, concessional import duty on certain components of wind electric generators, excise duty exemption and 10-year tax holiday on income generated from wind power projects. Loans for installing wind power projects are available from the Indian Renewable Energy Development Agency (IREDA) and other financial institutions. Technical support including wind resource assessment to identify potential sites is provided by the Centre for Wind Energy Technology , Chennai. This apart, preferential tariff is being provided in potential states. The government has recently announced generation-based incentivesunder which 50 paise per unit generated from wind power projects is being provided to the projects, which do not avail accelerated depreciation benefits. Out of the revised target of 9,000 MW of wind power set for 11th plan, 5,900 MW has already been achieved. The target for 2011-12 is 2,400 MW. Therefore, this target is likely to be fully achieved.

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