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India's route to CSP cost reduction

But is the domestic industry capable of developing an entire CSP production line?

 

By Heba Hashem, CSP Today

With no previous experience in realizing CSP at a commercial or demonstration level, project developers in India were faced with the immense challenge of building CSP plants for the first time, and under a relatively tight timeline of only 28 months.

“Based on my own experience in CSP, the minimum time of 48 months must have been allowed considering the Indian environment as these projects are happening for the first time here. The international experience also confirms this timeline as in the US and Spain with regards to realizing CSP first-phase development”, says Gopal Somani, an independent solar energy professional based in India.

Expectations exceeded

Despite the restrictive timelines and the challenge of obtaining solar block components locally, India’s CSP projects are well on track. “I carried a visit early this month to all CSP sites in Rajasthan and was delighted to see the progress made by developers as everyone appeared quite serious in delivering these projects. Looking at the progress made, it is evident that sufficient funds (equity) have flown into realizing these projects”, Somani tells CSP Today.

Even outside of the National Solar Mission (NSM), CSP projects under independent state portfolios are making remarkable strides. Gujarat, for example, was the first state in India to launch its solar policy in 2009 and is now targeting a solar capacity of 900MW – although only one CSP project will be contributing to this amount.

Executed by Cargo Solar Power, Gujarat Solar One in Kutch district is a 25MW project with nine hours of thermal storage and is the first of its kind in India. “The plant is scheduled to go live by the third quarter of 2013”, says Dhruv Batra, director at Cargo Power & Infrastructure, parent company of Cargo Solar.

Cutting capital costs by half

To achieve the progress made to date, India’s first phase of CSP installations mainly relied on the import of solar block components. For example, Godawari Green Energy ordered the steam generator for its 50MW parabolic CSP plant from Denmark’s Aalborg CSP, while at least 17,000 solar receivers were bought from Germany’s Schott Solar.

“We believe that CSP has a huge potential in markets like Middle East and North Africa, South Africa, South America and India, and in order to be in these markets, manufacturers will have to offer good quality at attractive prices. Unfortunately when it comes to offering attractive prices, most European suppliers struggle with the same as their cost of production and overheads is higher”, explains Batra.

Other foreign suppliers to phase one CSP projects included Siemens, Areva and GE. Siemens alone supplied four steam turbine generator units to projects by Corporate Ispat Alloys, KVK Energy Ventures, Godawari Green Energy and Diwakar Solar Projects.

“I am a strong advocate for CSP development, but unfortunately CSP technology suppliers and manufacturers across the globe have not been able to offer technology within affordable limits of Indian rate payers and utilities”, Somani notes. According to him, capital costs could be brought down by at least 40% if not more, with local technology.

“Land requirements cannot be avoided but could be minimized, and land is available in abundance anyway”, he explains, adding that linear Fresnel only results in fractional reduction in land requirements, and that a combination of trough and dish technology for CSP would be the best suited under present circumstances.

Gaps and challenges

Indian developers have repeatedly voiced a need for locally produced CSP components; in particular evacuated tubes, power block equipment, hydraulic drives, support structures and mirrors. Support structures and frames alone account for around 11% of the plant cost, and while Indian manufactured structures and frames can cost significantly less than internationally procured ones, the challenge would be in managing the geometric accuracy for tracking error and twist.

It is a relief to know however, that many CSP components are already being used or developed in other industries. Most power block components, for instance, are similar to conventional power block components, for which a domestic industry and expertise exists. In fact, India has a thriving industry dedicated to the manufacture of steel, power components, control systems and civil construction, all of which are integral for a CSP project.

The exception would be in supplying redesigned turbines, as “Indian turbine manufacturers do not yet have adequate experience in providing variable speed turbines to CSP plants”, says Jasmeet Khurana, a consultant of Bridge to India. Nevertheless, many other power block components are being manufactured and modified locally as per plant design.

Breaking the chain

Another CSP component that could be localized is mirrors, given that India has a dynamic glass manufacturing industry. Local companies like Saint Gobain and Asahi India Glass have the capability to manufacture high-quality float glass and are already active in the market.

But why outsource when you can do it yourself? This is what Cargo Power and Infrastructure realised when they decided to establish an in-house factory to produce the curved mirrors needed for their CSP projects, including the Gujarat Solar One plant, as well as to meet export demand. “Thermosol Glass is a brain child of the Cargo Group. We dared to localize CSP manufacturing in India when no other company was considering the same, looking at the weakening global and local CSP market”, says Batra.

The new plant will produce mirrors used in all types of CSP technologies, including laminated and parabolic mirrors, and will be ready for commercial production by the first quarter of 2013. “Thermosol Glass already has a pipeline of order equivalent to 75MW even without full commercial operation of the plant”, Batra adds.

And while most CSP developers avoided the integration of storage in phase one – being the most expensive component of a parabolic trough system – Cargo Power and Lanco Solar both opted for using molten-salt storage in their CSP plants.

DCR achievable?

In attempt to develop a domestic solar manufacturing base, the Ministry of New and Renewable Energy (MNRE) applied the domestic content requirement (DCR) for CSP projects during phase one; a scheme that is expected to continue in the coming phase. The DCR mandated a cost-based measure of 30% of local content in all plants and installations, excluding land.

Several CSP developers, however, found the DCR achievable, for two main reasons. Firstly, “content” in the DCR includes both labour and equipment that is manufactured in India, even if the company is foreign owned. Steel construction, pylons and foundations of a parabolic trough make up more than 30% of the system’s total cost, and other technologies may use even more domestic content, such as the tower and boiler of a power tower that can be constructed on site. Moreover, both power towers and linear Fresnel collectors use flat mirrors, which can be simpler to manufacture than the curved mirrors typically used in parabolic trough collectors and can be sourced domestically.

Secondly, a large proportion of CSP equipment production requires minimal workforce training. Meanwhile, other areas where domestic manufacturers can access the market include the manufacture of hydraulic drives and CSP-plant-grade heat transfer fluid (HTF). The latter specifically has been a bottleneck for parabolic trough projects, given that only one company in India has a track record in supplying HTF for CSP applications, which pushed up HTF prices significantly.

Yet the low availability of HTF presents an avenue for local research and development. "Companies can't always work for profit; sometimes they must work for a cause," Tarun Kapoor, joint secretary of the MNRE, said at a CSP summit earlier this year.

In the short-term (three to five years), Batra expects that most of the key CSP components (turbines, generators, evacuated tubes, heat transfer fluids and hydraulic drives) to be imported, as many manufacturers are contemplating setting up shop in India. However, in the long run (five years and above), he believes that more than 90-95% of CSP components will be manufactured in India.

Most importantly, during the second phase of the NSM, policy makers will be putting strict conditions on the import of goods for CSP projects under the mission, with the goal of promoting India’s local CSP industry.