Solar Energy Prospects & Challenges in Karnataka

The natural availability of solar resource in Karnataka has made the state as one of the premier producers of power from solar energy. - Shravankumar Nayak

The energy sector is one of the fastest growing sectors in the present context as every developmental aspect related to our day-to-day life is directly or indirectly related to it. As most of the required energy comes from the electricity due to the ease of conversion and better controllability, the electrical energy sector happens to be the backbone of any country’s economy. Needless to mention that the prosperity of any country is directly related to the quantum of energy consumption in that country. Particularly in India, the recent decade has seen a phenomenal transformation in the electrical energy sector. The booming renewable energy sector, the aiding government policies, the rapid technological advancements and enhanced awareness among general public about the innovations in the sector, are some of the major reasons for this transformation. Several states in India have become front liners in adopting the innovations in the field of renewable energy technology after having been blessed with abundant resources that are very essential to harvest the electrical power. So far as Solar Energy sector is concerned, the Jawaharlal Nehru National Solar Mission (JNNSM) launched by the Centre is targeting 20,000 MW of solar energy power by 2022. Karnataka is one of the leading states in India in the effective harvesting of electrical power from renewable energy sources, particularly from solar and wind energy. However, there have been, there are and there will be many challenges for the effective harvesting of electrical power from these renewable energy sources. The changing scenario in the form of demand for power, technological developments, government policies, the physical structure of the power system have mainly imposed several challenges for effective harvesting of the electrical power from renewable energy sources.

Present solar power scenario in Karnataka

Karnataka covers an area of 191,976 square kilometres which is 5.83 per cent of the total geographical area of India. It is the sixth largest Indian state by area. The total installed power capacity in the state has been 28,789.99 MW with 1,116.22 units per capita availability. The observed peak deficit and energy deficit have been 5.85 per cent and 3.43 per cent respectively during the latest financial year (Source: Karnataka’s Electricity Sector Transformation India’s Leading Renewable Energy State. Institute of Energy Economics and Financial Analysis-June 2018). Karnataka has become number one state in India in terms of energy harvesting from renewable with an installed capacity of about 13,500 MW particularly after having installed a record 3.9 GW capacity addition in 2017-18. The figure 1 shows the Indian national solar energy potential map with the clear indication about the fairly good opportunities for the solar energy in Karnataka.

A solar power potential of 24,700 MW is available in Karnataka whereas the installed capacity has been 5,966.6 MW as on 30th June 2019 against the total installed capacity of all non-conventional energy sources of 13,656.69 MW amounting to about 45 per cent. In Pavagada of Tumkur district a massive solar park of capacity of 2,000 MW has been commissioned as a joint initiative of KREDL and Solar Energy Corporation of India (SECI) with a tariff as low as Rs. 2.97/unit. The table 1 shows the installed capacity of solar power plants in different districts of Karnataka. As per the solar energy policy of Government of Karnataka, a minimum 2.75 per cent and 3 per cent of the total energy supply is expected to come from solar energy only, during the years 2019-20 and 2020-21 respectively. This clearly shows the expected contribution from solar energy to the energy sector of Karnataka in the coming years also.


Fig 1. Solar Potential in India and Karnataka (Courtesy: NISE / Smart Grid and Renewable Energy)

It can be observed from the table 1, the central and northern parts of Karnataka, by virtue of reasonably higher amount of solar input, have more number of solar power plants commissioned.  More than 60 per cent of the total installed capacity can be seen in these places. Excluding Pavagada Solar Park, then most of the grid connected solar installations can be found in these regions. In the identified solar potential also, these regions have maximum share. With the anticipated reduction in the AT&C (Aggregate Technical and Commercial) losses, grid losses and energy efficiency techniques net expansion in the electricity production required by the end of next decade (2027-28) is expected to be about 40 TWh. Out of this about 13 TWh (25 per cent) is expected from the solar sector itself. This prediction looks fully viable with the recent trends in solar auctions that are taking place in Karnataka. But if the trend and corresponding materialisation of the sanctioned projects is to be continued without any technical glitches, several issues and challenges need to be addressed.

Limited transmission infrastructure

Several solar power auctions have been delayed due to the concerns about the limited transmission system capacity. The unpredictable power generation from solar power installations has always been challenging for the efficient utilisation of the existing transmission resources. The seasonal excess generation from solar power plants might create contingencies in the transmission system. This concern has become more stringent especially with the interstate transmission system capacity. Lack of transmission infrastructure could be one of the possible hindrances for the effective harvesting of electrical power from solar energy resource. As the new solar projects can be commissioned in lesser time span compared to that required for setting up transmission systems, the quicker execution of transmission projects is very essential for overcoming the hindrances. The cost of setting transmission corridor comes to be somewhere between Rs. 50 Lakh to Rs. 1 crore per MW depending on the locations. Therefore, it may so happen that the sanctioned solar projects might get shifted to the other places which are ready with the required transmission corridor. Presently in India about 32 transmission corridor projects are being undertaken both inter and intrastate, with an approximate budget of Rs. 13,000 crore.

There have been several proposed transmission lines of different voltage ratings and also the substations. In Karnataka, over the next few years, KPTCL (Karnataka Power Transmission Corporation Limited) aims to install a total of 451 substations – 208 at the 66 kV level, 172 at 110 kV, 58 at 220 kV and 13 at the 400 kV level. The KPTCL also plans to install transmission lines of 15,152 circuit km with 4,346 circuit km at 66 kV, 3,496 circuit km at 110 kV, 4,470 circuit at 220 kV and 2,840 circuit km at 400 kV. According to KPTCL, the outlay for the projects in 2018-19 is Rs. 3,000 crore. Once these projects are materialised without any delay the solar resources with the remaining potential could be effectively tapped. The other challenges associated with transmission system are related to the rooftop solar power projects in Karnataka. As per KREDL (Karnataka Renewable Energy Development Limited) about 2,300 MW grid connected solar rooftop systems targeted by 2022 in Karnataka. The integration of rooftop solar PV systems to the low voltage distribution system is really challenging task as the transmission utilities are better equipped to manage the integration of large-scale power stations with higher voltage levels. This necessitates the integration of rooftop solar PV system to the grid with more emphasis on the technicalities.

Wheeling charges

According to the solar policy of government of Karnataka, all the solar power producing agencies were exempted from the wheeling charges till 2017. As of now KERC (Karnataka Renewable Energy Corporation) has now directed that they should all pay 25 per cent of the charges applicable to conventional power transmission. The order has been in effect since April 1, 2018 and will be in effect till March 31, 2020. These renewable energy projects will also be liable to bear the losses incurred in the applicable line, as approved by the KERC, by deductions from the net injected energy. KERC has also directed these renewable energy projects to pay two per cent in banking charges. As the results of this, the solar developers have contended that the new order would increase his costs by Rs. 1.19 per unit of power produced which is against 37 Paise of as calculated by KERC. However, in its detailed order, KERC has calculated that the increase on the imposition of transmission and wheeling charges would be 37 Paise, while line loss costs would be another 14 Paise. Nevertheless, the whole confusion regarding the wheeling charges is required to be overcome. However, the matter has already entered into a legal battle and the developers have got some relief from the High Court. A clear and strong policy with the objectives of safeguarding the interests of the investors and consumers is required to be formed.

Solar PV module costs and import constraints

The cost of the PV module lies somewhere between a third and a half of the total capital cost of a PV system, depending on the size of the project and the type of PV module. The histrionic reduction in the cost of solar photovoltaic (PV) modules, which has fallen by 99 per cent over the last four decades, is often considered as a major reason for the quick success of solar energy in India. So far as Indian solar projects are concerned, the government has mandated the investors to use the solar PV modules manufactured in India only, to avail the subsidies from the government. But due to the infant Indian solar PV module manufacturing sector against the Chinese or the other developed counterparts, it may be difficult to enjoy the subsidy benefits due to the considerable differences in the costs and the other modalities related to the PV modules manufactured in India and those exported. Besides, with the exception of a few leading firms that are expanding their capacities to meet increasing demand, most firms operate below full capacity. Module manufacturing is more diversified than cell manufacturing in India, because it is cheaper and less technology intensive to set up. India’s director general of trade remedies (DGTR) recommended in July 2018 the imposition of a 25 per cent duty on solar cells, assembled into modules or not, imported into India from China and Malaysia in the first year, followed by a gradual reduction to 20 per cent in the first six months of that second year and then to 15 per cent in the latter half of the second year. This will likely raise the capital cost of Indian solar projects in the near term by 10-15 per cent, likely offsetting the expected decline in imported module prices over the coming year. On the other side, the state policies have very little to do with overall cost of solar PV modules as they are governed by the policies made at the national level. Yet, it is observed that, as per the industrial policy document of each state, Karnataka has the highest cost of module manufacturing at Rs. 31.91/Wp as it provides only capital subsidy and an exemption on stamp duty against the top ten highest cumulative solar installed states in India. In view of this it is really the high time for the state policy makers to look into these aspects and amend the policies so that they become conducive for the investments in the solar PV module manufacturing sector. With the ‘Make in India’ and ‘Skill India’ initiatives likely to take big momentum in the coming years to come, it is very essential to provide such a platform for the investors to have a completely indigenous solar technology.

Conclusion

The natural availability of solar resource in Karnataka has made the state as one of the premier producers of power from solar energy. The state stands first among all the states in India in the power production from renewable sources. However, in view of the future prospects and requirements, certain issues related to the solar energy sector need to be addressed. The existing transmission capacity has to be enriched for the encouragement of the power producers to sell the power across the state borders. The various liabilities on the power producers in the form of wheeling, banking charges, interest rates are to be restructured keeping in view of the future of the sector. A strong and clear policy in this regard, without giving any scope for the escalation of conflicts in the form of legal issues, is desirable. The industrial policies should be made more conducive for the investors to invest in the solar PV module manufacturing sector to meet the objectives of the ‘Make in India’ and ‘Skill India’ initiatives.