CSP will become economically viable if mainstreamed within large industries

Sustainability Outlook spoke to Prakash Kumar on enablers for the CSP market in India and its for outlook for growth with states and large industries as key target customers.

You mentioned in our offline conversations that there isn't enough technical confidence on CSP installations. Why is this? Can we do anything to increase confidence?

CSP (Concentrated Solar Power) technology is entirely new for Indian power market. Currently, we are entirely dependent  on international experts for all parts of the CSP project development cycle – from  installation  to commissioning. To build technical confidence in India, particularly during the installation phase for CSP, the Indian government has to take necessary steps on a long term basis to develop an ecosystem of local manufacturers & EPC contractors. The involvement of bigger manufactures like BHEL and others at an early stage will help incubate the CSP industry to make a real success.

Sometimes, to adapt a new technology to a customer, some jugaad is often needed.  What kind of CSP-related jugaad have you seen? 

Currently, CSP has gained traction in markets where State Electricity Boards are the end customers. In future, almost all the large industries may become the customers of CSP for meeting their RPO obligations. In such a case, CSP solutions can deliver more energy than PV counterparts, and CSP will become economically viable if mainstreamed within large industries. In terms of adapting to customer needs, there are proven jugaads available like storage system or hybridization of CSP with bio-mass. This may result in more effective operation for 24 hrs. When the CSP installation is used for 24 hours of power generation, the customer recognizes CSP as a good product.

What is preventing CSP projects from taking off? Are there any financing mechanisms to help create momentum for CSP projects? 

At present, there is no specific financing system in place for CSP projects. Everyone currently has their own individual mechanisms through which they are driving the project. A successful financing mechanism is often based on mutual understanding between developers and customers, particularly after reviewing a number of case studies  across a wide a range of industries and projects.

The land requirements for CSP projects are huge and unavoidable as compared to any other power generation technique. This is a major barrier to CSP installations, particularly in captive industrial applications. There are some water requirements, but this  water requirement can be minimized by introducing dry cooling methods or a hybrid system of cooling arrangement.

What other operational benefits or difficulties do customers need to overcome?

The running cost of CSP is incomparable with conventional power generation.  Low operation costs are a major advantage that a customer can realise through adopting CSP technology. However, the only obstacle is the upfront installation cost of CSP. At present, this upfront installation cost  is too high and many customers opt for normal power-plants. To overcome this hurdle and to reduce upfront installation  costs, one must promote local manufacturing of CSP components -  there is no way other feasible alternative.

CSP can run as Solar as a Service model but only when the installation cost is brought down near to the cost of installation of conventional Power Plants. The cost of investment of CSP in India is roughly around 3 times higher than the normal conventional power plants. ROI is typically between 8 to 10 years. In some projects, it is not always easy to realise this ROI if the project’s Daily Net Irradiation (DNI) data predictions are not in sync with reality.

In terms of achieving a good ROI on a CSP project, how vulnerable are these projects to unanticipated changes in, or poorly forecast, irradiance levels?

It is direct relation with the power generation: when the irradiance is low, the power output will be lower and the efficiency of the entire system comes down. When the plant is running at full capacity, the cycle losses can be minimised and the cost per KWH will be lower than the part load conditions. In part load conditions, the auxiliary equipments’ efficiency also will be lower – resulting in an increase of auxiliary power consumption and the net power export comes down. Overall, low irradiance levels will increase the cost of power and ROI on CSP projects.

People say there isn't enough DNI / irradiance data to support CSP installations. How much investment is required to improve DNI data in India?

There are many sources like NREL, C-WET which have databases available for extracting DNI data for a particular geographical location. For getting more accurate data, one has to install a data measurement system supported by sun tracker for one or two years in the area where they have planned for the CSP installation. Currently there is a large network of  weather monitoring stations which have been installed in India by the government - MNRE can re-purpose and increase the number of these weather monitoring stations to supplement existing data sources and get much more relevant data.

Do you think CSP will take off in India by 2040? Why or why not?

Absolutely, CSP in India will take off in 2040 even before that. The reason is the scarcity of fossil fuels and increasing operational cost of coal based power plants. We all know that the new government is planning for announcing two pilot projects in CSP. To improve the growth of CSP further, the government can bring at least one CSP pilot project in each state considering the corresponding state’s DNI data.