Combat Tariff squeeze with Operational Intelligence
By Lakshman Sutrave, July 19, 2017
The Indian solar market has been booming in the last 3 years after the new government had announced to increase the Installed capacity targets from 20GW to 100GW by 2022. Under various plans, the state and the central governments have invited several bids for New Solar Projects. The trend of continuous fall in tariff has taken the entire industry by surprise. The bids which were at Rs.11/kWH during JNNSM batch 1 by the end of 2010 has fallen to Rs 2.44/kWH in the recent Badla UMSP in Rajasthan. It is speculated that the tariff bid may drop to Rs 1.5/kWH in the near future.
Reasons for Price Decrease
- More than 80% of Solar modules consumed in India are made in China and China has been adding excess manufacturing capacity that not only fulfills its local demand, but also has excess to export (China’s PV manufacturing capacity is expected to reach 50GW by end of 2016, whereas addition 34GW in 2016). This oversupply has made the Chinese make modules sell in India, at less than the domestic market price (Dumping). About 60% of the cost of the solar power plant is modules. Thus reduced module prices have a clear advantage in reduction of the overall project cost, which gives way for Indian bidders(Sourcing modules from China) to reduce the Tariff. India has also become an attractive market for China, as the US, and the EU nations have imposed anti-dumping duties on Chinese make modules. (https://en.wikipedia.org/wiki/Solar_power_in_China)(http://uk.reuters.com/article/uk-eu-china-court-trade-idUKKBN1671BT)
- Increased efficiency due to improved technology; Efficiencies of the solar panels have increased from a meager 10% (a decade ago) to almost 25% today. This trend of increasing efficiency has given the IPPs confidence to aggressively bid such low tariffs.
- Size of the Solar Projects has grown; while earlier JNNSM bidders had a cap of 5MW for each project, project sizes in the recent past are in hundreds of Mega Watts or Giga watts. The IPPs are hence confident of achieving the Economies of scale taking into account the size of the projects.
- Clear support from the government in terms of reforms like support in land acquisition, transmission infrastructure has helped IPPs to be confident on project executions.
Need for Operational Improvements
There are close to a 100 module manufacturing companies in India, who in many cases, act as developers. Apart from these manufacturers there are several IPPs who source the modules from China for their projects. Thus the question arises as to who will survive in such a price sensitive industry.
Improving O&M efficiency thus play an important role in achieving such aggressive business plans. Not ignoring any avenue, the IPPs these days are continuously scouting new innovative ideas to improve their plant efficiencies. One of the key developments of recent times is the adoption of Analytical tools and monitoring systems.
Adopting such monitoring systems has three main objectives:
- Forecasts Maintenance and Operational issues that the plants may face in the near future
- Alerts personnel on decreasing plant efficiencies with root cause analysis
- Understands the history of plant operations and throws alerts on expected break downs
- Gives real time status of operations with respect to Business plans, and additionally helps understand how to make up for operational losses
We have just what you need!
Bahwan Cybertek has developed a state-of-the-art product, Solar Operations Visualization and Analytics (SOVA), an advanced analytics tool built on BCT’s proprietary platform Cuecent Retina. SOVA monitors the solar power plant on a real-time basis and helps IPPs improve plant efficiencies and availability by sending alerts on issues such as Power losses, expected Component failures and operational maintenance.
About Bahwan Cybertek
Bahwan CyberTek (BCT) is a global provider of innovative software products and services. A CMMi Level-5 Ver. 1.3 organization, with 1000+ customers and 2800+ professionals, BCT excels in Product Development, Middleware and Integration, Business Process Management, Systems Integration, Business Intelligence, BPO, Independent Testing, Training, Consulting and Infrastructure Management. BCT has delivered solutions and services in twenty countries across North America, Middle East, Far East, Africa and Asia.