Ministry plans phase II of solar parks, doubles target to 40,000 MW

The Ministry of New and Renewable Energy (MNRE) is planning a second phase of setting up solar parks across the country, twice as ambitious as the first. Unlike the previous one, the new round will set aside a portion where the solar power producer will also have to set up facility to store the energy in batteries. 

In the first phase, formulated in 2014-15, vacant land capable of hosting solar panels to produce 20,000 MW had to be earmarked and acquired, and the necessary infrastructure, such as transmission lines, put in place for developers to set up solar projects. By the end March this year, 33 such areas in 21 states that could house 19,900 MW of projects had been identified — it takes about 5-6 acres to build 1 MW of installed capacity. While infrastructure at these places are at various stages of completion, some of the parks are ready to be handed over to project developers. Auctions have been held to allot some of these. 

In Phase-II, the ministry wants to identify land capable of accommodating 40,000 MW in about 25 states. "This will include storage of about 200-300 MW," said MNRE Secretary Upendra Tripathy . 

Until now, solar developers didn't bother about storage, promptly transferring the power they generated to the grid. Storage is necessary to ensure continuous solar power supply — since power generation can vary widely depending on the sun's intensity — but it is also expensive, almost doubling capital costs. A few pilot projects that consist of storage are in the pipeline, including 100 MW of storage at a solar park in Andhra Pradesh. 

In the first phase, the MNRE provided financial support through viability gap funding (VGF) of Rs 20 lakh per MW, or 30% of the cost of developing the park, whichever was lower. This may be increased in the second phase if storage is included. "We expect storage to require a higher VGF," said Tripathy. "We are also thinking of launching a National Storage Mission." 

Each park under Phase-I has a solar power park developer (SPPD) — usually, a venturebetween the Solar Corporation of India and the nodal agency for renewable energy in the state where the project is coming up. In Rajasthan and Maharashtra, private entities have also been roped in. "In the second phase, we will be strengthening the role of the state nodal agencies," said Tripathy. "They will have the option to run the solar projects themselves and benefit from the income." 

Global developers prefer setting up their projects in solar parks because they don't have to worry about acquiring land, which the government takes care of. "There have been requests from foreign companies, as well as from states which have available land, to set up more solar parks," said an analyst. "Also, the solar rooftop programme is proceeding very slowly. The government is likely to achieve only around 20,000 MW by 2022 (from rooftop installations), against the target of 40,000 MW. The effort is to make up the shortfall by having more ground projects at solar parks." 

Currently, India has rooftop installations to produce only around 300 MW. 

(This news story is from The Economic Times)