Harnessing Solar energy, Options for India
A study on harnessing solar energy options for India was conducted recently by Shakti Sustainable Energy Foundation, Climate works Foundation and SSN foundation. Supporting this study it has been concluded that solar energy can play a big role in providing electricity to rural areas and thus has been included in India’s rural electrification policy. See more at: http://shaktifoundation.in/report/harnessing-solar-energy-options-for-india/ A study on harnessing solar energy options for India was conducted recently by Shakti Sustainable Energy Foundation, Climate works Foundation and SSN foundation. Supporting this study it has been concluded that solar energy can play a big role in providing electricity to rural areas and thus has been included in India’s rural electrification policy. See more at: http://shaktifoundation.in/report/harnessing-solar-energy-options-for-india/
1.2.3. Solar PV Microgrid 1.2.3.1. Overview The rationale behind a microgrid is that by bringing the generation of electricity closer to the site of consumption, one can avoid the T&D losses of grid extension, especially in remote regions. Additionally, it can alleviate the demand–supply gap and provide more reliable power to rural areas. Given the variability and intermittent nature of solar energy, a microgrid based on a hybrid system of solar and mini-hydro or biomass makes more sense. In this study, a solar–biomass hybrid option is analysed as an illustration since cost data for biomass was more easily available. The optimal allocation of renewable resources will be site-specific, constrained by the availability of resources. Unlike other resources, solar energy is unlimited if the region receives bountiful sunlight. The microgrid is a potential solution for a village or a cluster of villages that have houses in close proximity. The technology is bound to work; the rural poor might be willing to pay for an assured supply of electricity, but even so it has to be borne in mind that sustainable long-term operations of the microgrid is difficult in the absence of solid institutional mechanisms. Under the current framework, the government provides a subsidy of `150 per W p of installed capacity and a soft loan at 5% for the rest of the amount less the promoter’s contribution of at least 20%. 22 1.2.3.2. Techno-economic Analysis A typical village is assumed to have 150 households with each having an energy requirement of 1 kWh per day. Street lighting, an electrified drinking water pump and community buildings such as health clinics and schools are considered essential needs. At any time, any additional demand can be easily augmented with solar energy. Moreover, if there is demand for a cottage industry or any commercial activity, additional solar panels can be added and the commercial entity can be charged a higher rate. Agriculture will be treated separately in a following section. Apart from the DDG system, the microgrid will consist of a low voltage (LT) distribution network, individual household connections, meters and a battery bank. Based on these assumptions, the load of such a village is computed to be 35 kW (See Appendix 1: Assumptions in the Section on Rural Electrification). Figure 9 has the economics of a microgrid that is based on 50% solar and 50% biomass, and 25% solar and 75% biomass. This is done solely for the purpose of illustration. The top x-axis is the system cost of solar PV that is likely to go down in the coming years, while the bottom x- axis is the distance to the grid used for the calculation of grid extension costs for the village. The y- axis is the LCOE of both renewable-energy-based generation as well as grid extension. Solar Photovoltaic Applications CSTEP | Page 68
Levelized Cost of Electricity (`/kWh) SPV SystemCost (` /Wp) 23 180 170 160 150 140 130 120 110 100 90 21 19 Grid Extension Cost 21.6 17 15 13 13.8 11 9 10.5 10.0 7 7.8 11.8km 20.1km 8.6 5 5 10 15 20 25 30 35 40 Distance from Grid to Compute Grid Extension Cost (km) DDG: 25% SPV + 75% Biomass DDG: 50% SPV + 50% Biomass Figure 9: Solar PV System Cost Compared to Grid Extension Observations from Figure 9 show: DDG: 25% solar PV and 75% biomass – solar PV systems cost of `180 per W p (current rates): o Capital cost: `4.56 million and LCOE `10.5 per kWh (at a 10% discount). o At today’s cost, a DDG with 25% solar PV will be more economical than grid extension beyond 11.8 km. DDG: 50% solar PV and 50% biomass: o Capital cost: `5.76 million and LCOE `13.8 per W p (at a 10% discount). o DDG will be economical for grid extensions beyond 20.1 km. If the solar PV system price were to drop to `140 per W p. o DDG with 25% solar PV will be competitive for grid extensions of over 8.1 km. o DDG with 50% solar PV will be more competitive for grid extensions of over 14 km. It has to be borne in mind that in India the power from the grid is cross-subsidised. Households typically pay `2 or less per unit of power for the lowest slab, where most of the rural households this report is targeting will fall under. 1.2.4. Alternate Financial Models The responsibility of installation and maintenance of the DDG for the life of the plant (twenty-five years) is assumed to be given to either a private contractor or a social entrepreneur as a franchisee. However, it is difficult to ensure sustainable operation of the microgrid and energy distribution. With the current scheme, the advantage is the administrative ease of a one-time payment. However, the disadvantage is that the system may languish without any maintenance after the five years of the annual maintenance contract (AMC). Solar Photovoltaic Applications CSTEP | Page 69
- Page 17: of PPAs need better clarity. The en
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Levelized Cost of Electricity (`/kWh)<br />
SPV SystemCost (` /Wp)<br />
23<br />
180 170 160 150 140 130 120 110 100 90<br />
21<br />
19<br />
Grid Extension Cost<br />
21.6<br />
17<br />
15<br />
13<br />
13.8<br />
11<br />
9<br />
10.5<br />
10.0<br />
7<br />
7.8<br />
11.8km<br />
20.1km<br />
8.6<br />
5<br />
5 10 15 20 25 30 35 40<br />
Distance from Grid to Compute Grid Extension Cost (km)<br />
DDG: 25% SPV + 75% Biomass<br />
DDG: 50% SPV + 50% Biomass<br />
Figure 9: <strong>Solar</strong> PV System Cost Compared to Grid Extension<br />
Observations from Figure 9 show:<br />
DDG: 25% solar PV and 75% biomass – solar PV systems cost of `180 per W p (current rates):<br />
o Capital cost: `4.56 million and LCOE `10.5 per kWh (at a 10% discount).<br />
o At today’s cost, a DDG with 25% solar PV will be more economical than grid<br />
extension beyond 11.8 km.<br />
DDG: 50% solar PV and 50% biomass:<br />
o Capital cost: `5.76 million and LCOE `13.8 per W p (at a 10% discount).<br />
o DDG will be economical <strong>for</strong> grid extensions beyond 20.1 km.<br />
If the solar PV system price were to drop to `140 per W p.<br />
o DDG with 25% solar PV will be competitive <strong>for</strong> grid extensions of over 8.1 km.<br />
o DDG with 50% solar PV will be more competitive <strong>for</strong> grid extensions of over 14 km.<br />
It has to be borne in mind that in <strong>India</strong> the power from the grid is cross-subsidised. Households<br />
typically pay `2 or less per unit of power <strong>for</strong> the lowest slab, where most of the rural households this<br />
report is targeting will fall under.<br />
1.2.4. Alternate Financial Models<br />
The responsibility of installation and maintenance of the DDG <strong>for</strong> the life of the plant (twenty-five<br />
years) is assumed to be given to either a private contractor or a social entrepreneur as a franchisee.<br />
However, it is difficult to ensure sustainable operation of the microgrid and <strong>energy</strong> distribution.<br />
With the current scheme, the advantage is the administrative ease of a one-time payment. However,<br />
the disadvantage is that the system may languish without any maintenance after the five years of the<br />
annual maintenance contract (AMC).<br />
<strong>Solar</strong> Photovoltaic Applications CSTEP | Page 69
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