Harnessing Solar energy, Options for India

3. Concentrated Solar Power Projections
Given the current status of CSP globally and in India, it is difficult to foresee how the technology will
unfold in India, and what the market share of each of the three technologies – parabolic trough,
linear Fresnel mirrors and the power tower – will be. Even the price quoted per megawatt for CSP
technologies varies a great deal, with most price points being drawn from the parabolic trough
technology. Keeping in mind the difficulties here, cost curves are not projected. The generationbased
incentive is projected as follows: till 2013 it is held fixed at `15.31 (current tariff), reduced at
5% annually till 2017 (end of Phase 2), and then reduced at an annual rate of 10% till 2022. For
capacity addition, three scenarios are projected for 2022; 1,000 MW, 4,250 MW and 8,000 MW will
be the cumulative deployment in 2022. The assumption here is that scaling up CSP in India is
difficult under normal circumstances. Even in an optimistic scenario, the achievement will be lower
than the JNNSM target.
4. Additional Tariff per Unit of Electricity
Under the three scenarios considered, the total installed capacity of PV and CSP together would be
6,000 MW, 14,250 MW and 20,000 MW respectively. Considering the weighted average of
generation-based incentives (GBI ) of PV and CSP, for capacity additions in each of the scenarios, the
annual outlay for the payment of tariffs would be `940 million in the fiscal year 2010–11, assuming a
total capacity addition of 30 MW of PV by the year end. The total outlay for tariff payments in 2022–
23 would be `130, `310 and `415 billions for a total installed capacity of 6,000 MW to 20,000 MW
in the three scenarios. According to these assumptions, the total net present value of all the tariffs
(annual power purchase agreements [PPAs] signed for a twenty-five-year period) will amount to
`620, `1500 and `1800 billion for the three scenarios respectively.
The entire cash outlay towards payment of tariffs is currently expected to come from increase in
electricity tariff. Gross generation of electricity (utility and non-utility) for the year 2009–10 for all
of India was 862 billion kWh. a Assuming a 9% GDP growth and a GDP-to-electricity elasticity of 0.9,
the generation in 2021–22 could be around 2,200 billion units. The net electricity supplied in 2009–
10 was 681 billion units and in 2022 it will be 1,616 billion units. b
However, to keep the analysis simple, it is assumed that the annual outlay for solar tariff for a
particular year is borne by the electricity (grid) consumers of that year. Further, it is assumed that
the cost of the tariff is evenly distributed to all customers without differentiating based on
consumption levels. In the current year, it is assumed (generously) that 30 MW of solar PV will be
installed in all three scenarios. The total electricity generated this year will be a maximum of 53
million kWh. c The total tariff cost associated with this will be around `940 millon, d but when
distributed over around 681 billion units of electricity, it works out to be less than a paisa per unit.
However, by 2022 the installed capacity (PV and CSP) will be significant at 6,000 MW, 14,250 MW
and 20,000 MW in the three scenarios respectively. The total generation associated with these
installations will be 11 billion kWh, 25 billion kWh and 35 billion kWh respectively. Distributing this
over the number of units of electricity supplied, it works out that the additional tariff for each unit
a Gross generation from utilities is 772 billion kWh (Ministry of Power) plus 90 billion kWh of captive
generation (estimate).
b Assumption: 7% auxiliary consumption and 15% T&D losses.
c Assumption: the capacity utilisation factor (CUF) is 20% or 1,752 MWh of generation per MW of installed
capacity.
d At `17.91 per kWh of current tariff this year for solar PV. No CSP-based generation is assumed this year.
Cumulative Capacity, Grid Parity and Cost CSTEP | Page 54