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Most urban and industrial centres in India are experiencing peak electricity
shortages of over 15%. Drawing on similar efforts being implemented in
London, Tokyo, New York and Adelaide, the government of India has come up
with a plan to develop 60 cities as solar cities. The proposal envisages a
minimum 10% reduction in total demand of conventional energy after five
years in each of these cities through efficiency and renewable energy
measures. Solar energy will have a prominent role to play since India, as a
tropical country, is blessed with abundant resources. If these solar cities go
ahead, India will become a role model for solar cities worldwide.
To keep pace with the global trend of exercising feed-in-tariff solar power, the
Ministry of New and Renewable Energy has produced a set of initiatives
aimed at bolstering solar generation. Solar PV projects up to a maximum
capacity of 50 MW are to be supported by financial incentives of a maximum
of Rs 12/kWh (28 US cents) for PV projects and Rs 10/kWh (24 US cents) for
solar thermal power projects for a period of 10 years.
With investors rushing to set up solar power projects and adding up to 2500
MW of capacity, the Ministry has asked the Planning Commission and the
Indian Cabinet to expand the 11th Plan solar power programme beyond 50
MW.
Thoughts
The government of India should consider feed-in-tariff schemes in
excess of 1000 MW per year against the present 50 MW, since
the need of the hour is to support PV programmes which are costprohibitive in comparison to other renewable technologies.
This would further encourage local companies to consider
investing in solar PV projects and can help in their economics.
India currently has to depend largely on imports of raw materials
and the rising currency rates make manufacturing a burden.
With government support for PV growing, ample solar resources
and both the labour and the market potential to exploit these
resources India is set to become a major force in the future PV
world.
Addition in retail, office complexes and logistics installations in India upto 2012
Prospective area under roof based solar PV in India under the 3 focus
sub-sectors
between 2008 and 2012
Conclusion
Rural electrification
3.87 The Government of India has kept a target of providing
electricity for all by
2012 with a minimum consumption of 1 kW per day per household.
As a part
of this programme, the government has targeted electrification of
18,000
remote villages through non-conventional power sources.
3.88 Power deficiency in India and the need to enhance access of
power to all at
the lowest lifecycle cost provide an ideal situation for the large-scale
introduction of DDG technologies, like solar, wind, biomass and
small hydro.
3.90 Although the relative economics of solar PV might not provide an ideal
match for all villages just as yet, solar PV is ideal for villages separated from
the grid by physical barriers.
3.91 Taking a conservative estimate of 25% or 4,500 villages out of the 18,000
villages classified as remote being electrified by solar means a demand of
about 300 MW in the coming next 4-5 years.
Telecom
3.92 Most BTSs in India use DG sets for backup power that suffers from
disadvantages, like high cost of fuel (diesel), fuel transportation and storage,
fuel pilferage, pollution and fuel adulteration. This use is more frequent in
semi-urban and rural areas with long and frequent power outages and old and
unreliable distribution networks.
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The selling price too is projected to drop with increasing international competition and
thinning of margins for manufacturers.
In the analysis, it is projected that with maturing of the market, margins made by
manufacturers would decrease over time.
An upper band and lower band of cost of production and selling price (reflecting a highly
aggressive and a milder cost and price trajectories respectively) have been used for the
analysis.
The analysis consisting of 2 cases is presented in
Table 34:
(i) Case I: A manufacturing unit located in an SEZ and gets capital
subsidy
(ii) Case II: A manufacturing unit located in an SEZ but does not get
capital subsidy
To analyze a non-SEZ case, an investor would need to take into account tax and
duties structures on capital goods, raw materials, services, electricity, etc. of the
concerned state.
For case I, it is assumed that the capital subsidy will be used to repay the debt.