Solar as an Electricity Solution

1
Solar as an Electricity Solution

• Jigar Shah
• Founder SunEdison
• November 20, 2009

2
Agenda

• Introduction
• Solar in India
• Proposed Solutions
• Policy and Costs
• Appendix

3
Introduction
4
Emerging Markets Important
Source DB Alternative Energy Solar Photovoltaic
Industry
5
Solar Pricing Trends
System prices have fallen 43 in 2009 vs. 2008,
more to come in 2010, then stabilizing to
long-term trend of 5 p.a. System Efficiency
increases will be more interesting
6
What is the addressable market?
In 2010, 100 billion (approximately 5) of
global retail electricity demand could be
competitively addressed with solar power 600
GWs (2 Trillion of Solar)
Area of solar competitiveness
2010
2015
2020
Electricity Price Rising
7
Solar in India
8
Global Solar Resource

• India has the best solar resource in Asia
• All technologies work in India even technologies
  that generates electricity only from direct
  normal insolation (DNI)
• Areas where utility scale solar farms will be
  deployed
• Thin-Film and Multijunction solar cells can
  easily be mfg in India and have ½ performance
  degradation due to temperature

Latitude Zones Best Suited for HCPV
Source Global Green USA
9
Sources of Funds...

• Kerosene-related subsidies on 600 million liters
  of imported kerosene oil could be put to work on
  this project. According to the Associated
  Chambers of Commerce and Industry of India
  (ASSOCHAM)
• 38.6 of the kerosene subsidy is being diverted
  for black market and adulteration purposes
• 2006 kerosene subsidy costs the taxpayers 150
  billion rupees (24 per poor family annually)
• Annual subsidies to the poor, explicit and
  implicit, account for about 14 percent of India's
  1 trillion gross domestic product -- 875 per
  poor family

10
Importance of Diversity

• The Indonesian government will limit the export
  of coal to 150 million tons a year from 2009 to
  2025 to secure domestic supplies, according to
  local media. December 2007
• Energy is vital to our economic growth. This is
  an area where we are a deficit economy. We import
  over 70 percent of our petroleum energy needs and
  are also moving to a deficit position in coal,
  Manmohan Singh said.
• Thermoelectric-power plants accounted for 40
  percent of total withdrawals (136,000 million
  gallons per day Mgal/d) in 2000. 

11
India has done this Before

• This decade, GDP was led by Wireless
• Global Telecom industry was in trouble and India
  bought equipment cheap
• Wireless was not cheaper than landlines, but
  increased productivity to be the 1 source of GDP
  growth in this decade
• Energy is the next largest source of GDP growth
  potential
• Global Solar industry has a glut of product and
  expertise
• Central Infrastructure is difficult in India

12
Indias biggest challenge to growth is Energy

• Price is not as important as the EXISTENCE of
  electricity
• India continues to be unable to institute land
  and water policies necessary to grow electricity
  simply through new Coal
• Nuclear is proving to be just as difficult and
  costly as Coal
• What is the trade off between price and GDP
  growth
• Is sustaining near-term GDP growth enough to
  justify a 1 rate increase in electricity costs?
• Village electrification data shows that
  household electrification results in a 64
  increase in family income
• Airports, shopping centers, deserts, and
  industrial sites can cover 20,000 MW of solar
  without using agricultural land

13
Defining Utility 2.0

• The main challenge is that State Electricity
  Boards do not know how to integrate 21st century
  technologies or Utility 2.0
• Energy Efficiency
• Self Generation
• Independent Power Producers
• Why Utility 2.0
• India lost 26.29 of its power in 2004
• IBM success in India
• Delhi example 100MM for diesel or
  inverter/battery
• Lost productivity Larger number

Source NationMaster.com
14
Utility 2.0

• Generation
• Point of Load DG
• Substation Level DG

• Control
• DG Operations Center
• 24 Hour irradiance
• Forecasting
• SCADA
• Monitor, Analyze, Report Control
• Tariff Optimization

• Storage
• Energy Storage
• Thermal Storage (Ice Storage)

Generation
Control
Load
Storage

• Load
• Demand Reduction
• Solar Load Controllers
• Storage Based Load
• Load Shifting (Ice Energy)

15
Proposed Solutions
16
Suggested Grid Connected Solar program

• New Goal 20,000 MW program by 2020, starting
  with 100 MW in 2010
• Grow at 50 annually to meet 2 of Indias needs
  by 2020
• Allow for 80 depreciation on all systems
• Encourage State Electricity Boards to raise
  electricity rates by 0.9 instead of seeking
  Central support
• Provide 18 return on equity to promote local mfg
• Creates 1,000,000 direct job-years of employment
• Target is that solar should reach 2 of grid by
  2020
• India becomes the most important World Market by
  2012

17
Policy and Costs
18
20,000 MW by 2020 Start Properly!

• Generous 25 year Feed-in Tariff (FIT)
• Rs 15 per kWh to show seriousness and attract
  players
• Reduce FIT based on MW targets not calendar
• Hassle free interconnection to the grid and
  purchase electricity in priority to conventional
  electricity.
• Training program for contractors to learn how to
  install solar PV grant funding

19
Suggested Policy Changes

• Grid-connected Incentives
• A 20,000 MW program across India, example

Flat price for 3 years and then reduction of 10
per year over 25 years
20
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Suggested Policy Changes

• Incentives
• Start at Rs 15 for 25 years
• Reduce incentives by MWs NOT by calendar
• Interconnection
• Hassle-free, clear interconnection
• Streamline central station process for projects
  up to 10 of distribution feeder capacity
• Accept all internationally recognized standards
  with which local manufacturers are already
  comfortable (UL, TUV, IEC)

22
Suggested Policy Changes

• Utility Rates and Revenue Policies
• Charge customers real cost of electricity peak
  and off-peak
• Keep subsidized rates for the poor, provide
  higher rates/incentives for wealthier customers

23
Suggested Policy Changes

• Off-Grid/Rural electrification
• Provide 5 year financing mandate through the
  State Bank of India
• 80 depreciation
• Areas of Focus
• Solar Home Systems
• Lighting, Railway signals, Telecom
• Off-Grid Commercial

24
Utility 2.0

• Generation
• Point of Load PV
• Substation Level PV

• Control
• PV Operations Center
• 24 Hour irradiance
• Forecasting
• SCADA
• Monitor, Analyze, Report Control
• Tariff Optimization

• Storage
• Energy Storage
• Thermal Storage (Ice Storage)

Generation
Control
Load
Storage

• Load
• Demand Reduction
• Solar Load Controllers
• Storage Based Load
• Load Shifting (Ice Energy)

25
Thank you

• Jigar Shah
• Founder, SunEdison