CSP Today examines India’s market potential for solar combined cycle plant retrofits and new build projects in India.
By Francesca Boothby
Integrated solar combined cycle technology (ISCC) is widely regarded as a ‘bridge technology’ between fossil fuel and solar energy production. Countries such as Morocco, Algeria, and Egypt and have already successfully deployed ISCC.
Yet, despite having carried out successful feasibility studies for ISCC plants in India since 1989, India is trailing behind.
India’s main project, the Mathania plant in Rajasthan, has been in the pipeline for over two decades. Today, it is still only at the bidding stage. Why has ISCC uptake been so slow in India, and what does the future hold?
Georg Brakmann, Managing Director at Fichtner Solar analyst and engineering consultancy sheds light on the issue. His conviction in the benefits of the technology saw him personally defend the ISCC concept through presentations of thermodynamic calculations to the World Bank.
After many fragmented starts and the so called “ISCC crisis” of confidence in the 1990s, the Rajasthan government decided to go ahead with commercial scale plans for an area near Jodhpur.
It invited KfW (the government funded German development bank) and the UN Global Environmental Facility to financially support this pioneering project. In 2000 Fichter Solar went on to win three out of the four market contracts being offered (Morocco, India and Egypt).
Progress of ISCC in India however, then faced a new problem. Brakmann recalls how “the industry just wasn’t ready” and there was little international interest. Construction of the gas pipeline being built for the proposed 140Mwe ISCC plant at Mathania was halted when rising prices of gas imports from Qatar and crude oil raised concerns over the project’s financial viability.
Eventually the stalemate became so entrenched that plans for the Mathania project were suspended indefinitely, while new open bidding systems were organised. Fichtner Solar instead focused on Ain Beni Mathar in Morocco and Kuraymat, Egypt. These two plants are now operational.
India’s approach contrasts starkly with Iran’s proactive stance on ISCC and the relatively swift pace of implementation there, notes Shiv Shukla, President & CEO, Abengoa.
A key factor holding back progress has been a lack of government commitment to framework policies. “Government indecision” has stalled progress over the last twenty years, while many individuals that were originally involved have either moved on or retired, explains Mr Shukla.
India’s Jawawharlal Nehru National Solar Mission (JNNSM) is currently the driving force behind solar energy in India. Having come into existence in 2009, it currently focuses on CSP and PV projects.
ISCC at Mathania would be the first in the country, however, since the technology is not prioritised or formally recognised under the JNNSM, ISCC projects cannot technically be taken up under the framework.
Another factor holding back implementation is the current lack of ‘sale depth’ in India’s Renewable Energy Credit (REC) market. The result is that it is currently impossible to implement an ISCC project based on sale certificates, given that companies are as yet unable to forecast the price of REC certificates.
Mr Shukla notes that from a project finance lending institution’s perspective, this has had “a major effect on confidence and progress”.
The current situation regarding ISCC deployment in India is therefore something of a problem. Mr Brakmann jokes about his “frustration” over one of the first projects he ever worked on twenty years ago having not yet been implemented.
Industry sentiment, however, indicates that there is significant market potential for ISCC in India; experts including Mr Brakmann and Mr Shukla are confident that the Mathania project will eventually gain traction, despite ISCC’s convoluted history having discouraged many players, and the current constraints of low bidding prices.
On the positive side, ISCC works particularly well in areas with abundant solar radiation (Rajasthan and northern Gujarat, and Tamil Nadu) and theoretically the Rajasthan government still has access to the US$49 million originally allotted by the World Bank with an overall financing total of US$245 million.
India’s Solar Mission has cemented policy commitment and consequently, a more stringent framework is evolving. Nevertheless, as Abengoa’s Mr Shukla observes, ISCC is being overshadowed by standalone PV and CSP projects. He says this is unlikely to change in the near future.
“I don’t think there will be any changes in the coming policies. The current situation is that government is fully supporting [standalone] solar PV and CSP because they need to meet their renewable energy targets”, he says.
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