Sankar&Surel_Final_Paper_TEM 492

1 | Solar for India, a report analyzing the future growth of solar power inIndia
SOLAR POWER FOR INDIA
By-
SankaranarayananSubramanian
Surel Surve

TABLE OF CONTENTS
Background and Motivation…………………………….……………………………………..........................3
Scope…………....……………………………………………………………………………………………………………….3
Literature Review…………………………………………………………………………………………………………..4
Solar For India- An Overview……………………………….………………………………………………………….6
Model in detail.………………………………………………………………………………………………………………6
 Grid Parity…………………......……………………………….……………………………………………………….6
 Carbon Tax……………………….………………………………………………………………………………………9
 Payback Period……………………………………………………………………………………………………….10
 GDP………………………………………………………………………………………………………………..………11
 New & InstalledCapacity…………………………………………………………………………………………12
 Bass Diffusion Model………………………………………………………………………………………………14
Sensitivity Analysis…………….…………………………………………………………………………………………15
Conclusion……………………………………………………………………………………………………………………16
Abbreviations……………………………………………………………………………………………………………….16
References……………………………………………………………………………………………………………………17
List of Figures and Tables
 Fig.1) Breakdown of global CO2 emissions from coal/peat through the production of
electricity, heat & power generation capacity……………………..…………………….………………4
 Fig. 2) Comparison of all the different types of energy costs from different
sources………………………………………………………………………………………………………………..…..9
 Fig. 3) Trend of increasein LCOEfrom coal………………………………………………………………10
 Fig. 4) Comparison in % share of Coal, Solar and other types of power
plants……………………………………………………………………………………………………….………….…14
 Fig. 5) The S-shaped market adoption curve for solar power generation
technologies……………………………………………………………………………………………………..…...15
 Table 1) Comparison of payback of standalone and grid connected systems in years
……………………………………………………………………………………………………………………………….11

BACKGROUND & MOTIVATION
Access to electricity and other modern energy sources is a necessary requirement for the economic
and social development of any country. Energy is an integral part of an economy to grow and
sustain. It can be associated directly with the well-being of the people. Providing affordable and
clean energy to all the people in a country is a challenge. Solving this challenge gives way to
prosperity, making the economy boom, creating job opportunities and enhancing quality of life of
the people and the standard of living.
India is the third largest economy by purchasing power parity1 (World Bank ranking), is the second
most populated country in the world, a fast growing economy with hunger for energy rising
dramatically over the years. This is mainly due to an increasing population, especially the middle
income groups. With the government’s pledge to provide electricity for all (currently 75% have
access to electricity2) and to support the energy demand to maintain economic growth, efforts are
taken in a large scale by the Government of India (GOI). There is a long way to go to improve
energy situation in the country with a shortage of around 10% between supply and peak demand
and is increasing. Changes need to be done in terms of policy, generation capacity increase, and
improve energy efficiency in an affordable manner to achieve and sustain high economic growth.
In addition to catering to energy needs, India is required to reduce the greenhouse gas emissions
to reduce spending in health care and also in order to position itself better among the countries in
United Nations to have better negotiating power in the International climate change arena. In order
to achieve this, this is right time for Indian government to push for reforms in energy sector and
find cheaper and non-polluting sources, which leads to interest in renewable energy generation
sources.
GOI is now keen on exploring opportunities in alternative energy to reduce greenhouse gases and
catering to demand. While countries such as China and United States have ambitious targets to
reduce greenhouse gases, India is doing its part well in terms of reducing energy intensity and
measures to reduce pollution.
SCOPE
With coal prices soaring high, major countries are looking for alternative and cheap fuel for energy
generation and solar energy has been one answer for many questions. With the price of solar power
declining rapidly with technological advancement and improved efficiency, Solar is going to
dominate the energy arena for at least a couple of decades.
India being a tropical country, the daily average solar energy incident over India varies from 4 to
7 kW h/m2 with the sunshine hours ranging between 2300 and 3200 per year [3]
, depending upon
location. With this potential for generating large amount of clean and green energy, this model

tries to identify a trend in which the conversion can happen from coal based generation to other
sources especially solar and also the percent share it can hold based on the current trends in policies
and condition prevailing around the world.
In addition, it analyses the current trends in the prices of different solar energy systems and
compares it with the cost of coal power generation in India and approximates the year when grid
parity (GP) can be achieved or the cost of energy from solar is on par with that from coal.
However, till today solar power potential has not been exploited to the fullest, mainly due to high
capital expenditure cost involved in installation of Solar Photovoltaic (PV) or Solar thermal
systems. In the current times, apart from the government entities, several private and corporate
firms have started showing interest in solar power not only as part of their social responsibility,
but also because of the promising future they see for green energy sources. Due to technical
potential of 5,000 trillion kWh per year & minimum operating cost, Solar Power is considered the
best suited energy source for India [4]
and also helping in reducing emissions.
FIG. 1) Breakdown of global CO2 emissions from coal/peat through the production of electricity, heat & power generation
capacity
LITERATURE REVIEW
The reason for solar power not being utilized in India widely so far can be attributed to high Capital
investment requirement. But due to improvement in efficiency and increase in adoption
worldwide, the costs are coming down rapidly. With the time required for construction and
commissioning being very less than conventional power plants, it is highly sought after with the
conditions being favorable and an immediate requirement to increase capacity. The assumptions
and calculations in the report are based on the policies, estimation and projections made by the
Government of India (GOI), taking into account the data from various sources including the US
Energy Information Administration (EIA), data from World Bank and various Indian authorities
including Ministry of New and Renewable Energy (MNRE), Central Electrification Authority
(CEA), Central Electricity Regulatory Commission (CERC) etc.,

Some of the policies taken for review include the Jawaharlal Nehru National Solar Mission
(JNNSM), Desert Power India 2050 and recent developments in this relation including the
decisions, taxes, tax exemptions and efforts made by the GOI.
The objective of the National Solar Mission is to establish India as a global leader in solar energy,
by creating the policy conditions for its diffusion across the country as quickly as possible. One of
the main targets is to create an enabling policy framework for the deployment of 20,000 MW of
solar power by 2022 [5]. Besides, the mission anticipates to achieve grid parity by 2022 and parity
with coal-based thermal power by 2030. Most recently, the government has announced its
ambitious plan to increase target from 20 GW to 100GW of solar by 2022 (Deustche Bank -
Crossing the Chasm-2015 [6]). With the Indian government being hopeful and highly ambitious
about the rate of adoption and installation of Solar Power, analysis needs to be made as to how
feasible it would be to achieve this target based on the current scenario.
Currently the installed capacity for Solar is around 3.3 GW [7]. To aid in increasing the adoption
of and availability of solar components in the market, GOI has dropped the plan to impose anti-
dumping [8] duty suggested by the Department of Trade and Commerce to prevent domestic
manufacturers. It is clear that the government wants to increase the rate of adoption of solar power
to bring down cost and boost interest among industries to promote domestic manufacturing.
Because of the recent interests from private players like SunEdison and FirstSolar coupled with
talk of further cooperation with the US government and local policy announcements as mentioned
above, support our view that India is beginning to ramp solar installations and could become one
of the leading markets in the world. Recently, India’s Power Minister suggested that a rule may be
implemented where the addition of new coal plants would require the simultaneous investment in
renewable capacity equal to ~5% of the traditional capacity [6] showing the interest of the people
in power to bring a positive change. On the other hand, in just four years, India has seen imports
of thermal coal double from 54Mt or 10% of India’s total consumption in 2009/10 to over 20%
share in 2013/14, resulting in a US$12bn annual import bill. Based on the Coal Ministry’s current
forecast, coal imports could double again to approach US$24bn by 2016/17 (say US$80-100/t @
200-240mtpa) [9]
This increase in dependence on coal and rapid installation of new coal power plants to the tune of
500 GW [10] is viewed as a strategy similar to that implemented by China in the 90’s where energy
available from cheap coal gave access to electricity for most of the citizens leading to increase in
prosperity, standard of living and boosted economy especially in the manufacturing sector. Though
this appears to be a proven model for development, there are various constraints to be taken care.
This is not only limited to but also includes increase in pollution levels, health risks for people
living around the generation plants, resistance from developed countries to reduce emission of
Greenhouse gases causing global warming and in an major level, the availability of cheap coal.
Though India is gifted with a high amount of coal resources, the ash content is very high [11] leading
to low calorific value and more coal required to produce power, causing high levels of pollution.
As a result import of coal with higher ash content at a higher cost is to be done from countries
mainly like Australia, Indonesia and South Africa. With the dwindling availability of resources
the cost of coal imported increasing and problems in mobilizing locally available coal due to land

acquisition and mining problems, has resulted in a deficit of fuel and most coal plants do not run
on full capacity due this non-availability of coal on time.
Based on the current stand of the federal government, both coal power plants and solar power
plants will be increasing. This is evident from the “DESERT POWER INDIA – 2050 [12]” where it
is estimated that the utilization of coal plants will be three time the current availability and the
renewable energy is to increase manifold from a very minimum contribution at present which
includes solar, wind, small hydro.
If projections by IEA [13] are to be considered possible then before 2025, India overtakes China, to
become the world’s largest importer of coal and somewhere in this decade leaves behind USA to
claim spot two before rising to the 1st. By the end of the 2040, India is the destination for 30% of
all the coal traded inter-regionally and its import dependency increases from 25% in 2012 to nearly
40% by 2040. Naturally, more the coal burnt, more the CO2 emissions ultimately resulting in much
more pollution. Not to mention the negative effect on the nations GDP with ever increasing
imports.
SOLAR FOR INDIA-AN OVERVIEW
The report analyses the above mentioned facts and scenarios of the energy demand and growth in
the following order.
 One of the most primary aims of our model is to identify the year in which grid parity for
different solar energy sources can be achieved (such as utility scale solar pv plant, rooftop
plant and solar thermal) by calculating the levelized cost of energy (LCOE). Also the
payback time for different sources are calculated.
 Followed by this is the sensitivity analysis of GDP and Energy intensity to find the energy
demand/consumption over the years assuming different cases of economic growth rates
using the GDP and energy data collected from World Bank [14]
 Then an estimation of the mix of coal powered plants, solar and other sources are estimated
based on the “Desert Power India – 2015” plan.
 Finally a bass diffusion model for adapting solar power is calculated based on the
percentage share from the previous estimation.
MODEL IN DETAIL
The model is analyzed in detail below with the calculations done in the accompanies excel sheet.
I. GRID PARITY
Grid Parity between two sources is achieved when the cost of generating electricity from both the
sources are same. Since coal is one of the cheapest sources of electricity generation, we start our
analysis with the time required for solar energy generation to achieve grid parity with coal plants.

This is measured using LCOE, which is a convenient summary measure of the overall
competiveness of different generating technologies. It represents the per-kilowatt-hour cost (in real
dollars) of building and operating a generating plant over an assumed financial life and duty cycle.
Key inputs to calculating LCOE include capital costs, fuel costs, fixed and variable operations and
maintenance (O&M) costs, financing costs, and an assumed utilization rate for each plant type. The
importance of the factors varies among the technologies. The availability of various incentives,
including state or federal tax credits, also impacts the calculation of LCOE. As with any projection,
there is uncertainty about all of these factors and their values can vary regionally and across time
as technologies evolve and fuel prices change.
LCOE [15]
= {(overnight capital cost * capital recovery factor + fixed O&M
cost)/(8760 * capacity factor)} + (fuel cost * heat rate) + variable O&M cost.
Where,
 Overnight capital cost ($/kW) is the cost of building a power plant overnight. The term
is useful to compare the economic feasibility of building various plants.
 Capital recovery factor is the ratio of a constant annuity to the present value of receiving
that annuity for a given length of time. The value that is chosen for the discount rate i can
often 'weight' the decision towards one option or another, so the basis for choosing the
discount must clearly be carefully evaluated.
 Fixed Operation and Maintenance (O&M) costs ($/kW-year)
 Variable O&M costs ($/kWh).
 8760=(24*365), number of hours in a year
 Capacity factor is the ratio of the annual energy that the system produces to the amount
of energy it would produce if it operated at full nameplate capacity for the whole year.
 Fuel cost ($/MMBtu) is the price of the fuel burnt in order to generate one unit of
electricity.
 Heat rate (Btu/kWh) is the amount of fuel burned for each unit of electricity produced.
NOTE: The LCOE is the minimum price at which energy must be sold for an energy project to
break even.
The following assumptions have been made for our analysis,
 Fixed O&M costs- For Thermal Power Plants, Fixed O&M costs are assumed to be 2% of
the capital costs per annum. For Solar modules, Fixed O&M is 2% of Capital cost for Solar
Rooftops and 1.5% of total capital costs for Solar PV & Solar Thermal installations
according to MNRE India.
 Variable O&M costs- For Coal powered electricity generation plants, Variable costs are
assumed to be 0.1% of the total capital cost of the power plant each year. Since Solar power
electricity generation doesn’t have fuel costs, variable costs are almost nil & thus can be
neglected safely.

 Capacity Factor- Coal powered power plants being pretty efficient, CF is considered as
0.85. Capacity Factors vary from module to module when it comes to solar due to different
applications and scales of use. Data used for solar calculation is picked up from MNRE
India website.
 Overnight Capital Cost- We have averaged capital costs for coal power plants that we
received from multiple sources to reach to the number of $30005. Solar PV installation
costs are picked from MNRE and are clearly quite higher than Coal power plants currently.
 Interest on working capital- Coal power generation is cheaper & hence lucrative due to
low interest rate on capital. We have assumed it as 10% by taking the most common value
seen across multiple sources. Interest rates for solar modules differ from installation to
installation and the respective interest rates are picked from MNRE India.
 Lifetime- For a fair comparison, we have assumed the lifetime of both the competitors to
be 25 years whereas in reality Coal Power Plants have a much longer lifetime ranging from
30 to 60 years according to NREL while Solar PV modules fall in the 20-25 years range.
We still found a source cercind.gov.in that states coal power plant lifetime as 25 years.
 CRF is calculated as per the formula mentioned above for both types of power plants.
 Fuel Costs- Since no fuel is involved in generation of electricity using Solar PV, fuel costs
here are zero. For Coal, tit is $1.99 /MMBtu [16]
 Heat rate- Solar PV & Solar Thermal do not use any fuels and hence have no heat rate of
fuel involved in their LCOE calculations. Heat rate of coal is considered to be 10.415
Btu/kWh [17]
The calculations for the LCOE each year are made using the above assumed & researched values.
A comparison is made by plotting all the LCOE values of all the competing electricity sources for
each year.
Based on the graph below we see that grid parity achievement for solar in India won’t take too
many years. This is supposed to happen in a couple of year and can vary a little by changes in the
scenario but it is bound to happen quickly.

FIG. 2) Comparison of all the different types of energy costs from different sources.
We see that ideally two solar technologies viz. Solar PV (MW Scale) & Solar PV Rooftop with
subsidy, are already competitive with the conventional coal generated electricity.
II. CARBON TAX
The GOI in a frantic attempt to discourage rising coal usage, keeps on increasing the carbon tax
per metric ton of coal occasionally every few years. This raises the LCOE of Coal generated
electricity by directly increasing the fuel cost.
For simplicity of calculations, we have considered fuel cost devoid carbon tax for LCOE
calculations, but here in order to determine the LCOE including Carbon Tax costs, we need to find
Carbon Tax inclusive fuel costs. Carbon Tax in India currently being $3.21 per metric ton of coal
was raised in 2014 from $1.64 per metric ton of coal. Thus, it’s logically sound to assume that the
fuel cost in 2015 is inclusive of the carbon tax of $1.64 active till 2014(previous year). Hence the
$0.000
$0.050
$0.100
$0.150
$0.200
$0.250
$0.300
$0.350
$0.400
$/KWH
YEAR
Comparing the future trend of energy cost in India
Coal Solar PV (MW Scale) Solar Thermal
Solar PV Rooftop Solar PV Rooftop with subsidy

10 | Solar for India,a report analyzingthe future growth ofsolar power in India
effective carbon tax affecting the fuel costs will only be the difference between the updated and
old carbon tax, i.e. $3.21-$1.64=$1.57 per metric ton of coal.
Coal burnt for single unit power generation (1 kWh) can be calculated by measuring the heat
content and arriving at a quantity required. But based on a Harvard study [18], we assume 0.77 Kg
(0.00077 ton) coal is burned to produce one unit of electricity. Using this we determine carbon tax
effective for producing one unit of electricity which turns out to be $0.0011468850 which whenadded
to the fuel costneeded for producing 1 kWh of electricity amounts to a net fuel costof $0.0079387550/kWh.
LCOE of Coal powered electricity is once again calculated using the new carbon tax inclusive fuel cost.
Result shows that electricity is 0.73₡/kwh costlier with the new carbon tax. Since the carbon tax levied
may increase in the future owing to the step towards a green economy, the cost of power from coal is bound
to increase further.
Based on the assumptions made, the trend in increase in LCOE from coal is as below.
FIG. 3) Trend of increase in LCOE from coal
III. PAYBACK PERIOD
Payback period refers to the period of time required to recoup the funds invested in a project, or to reach
the break-even point.
For a standalone solar PV system, payback period is usually calculated by using the ratio of total units of
electricity it generatesover the lifetime to the cost of the installation and maintenance of the overall system.

Based on the data from MNRE, the capacity factor CF), capital recovery factor CRF) and installation cost
are assumed.
From this assumption,
Payback time for standalone system in years = Capital cost / (CF * 24 * 365 * CRF)
But for a grid connected system, the payback time is calculated by comparing the units of electricity
generated over lifetime by the solar PV system to the cost the system would save by not using the coal
power. This calculation is affected by increase in price of coal every year since more the increase in price
of coal, more the savings is from the PV system leading to a reduced payback time.
From this assumption,
We calculate
1) Saving every year, cumulative savings (CS) over the years. If the CS is more than the installation
cost, payback is achieved in that year.
2) To calculate the exact month:
If we assume thatthe payback occursin 5 th year,we calculate months using the below formula.
(Total investment – CS till 4th year) / Savings in the 5th year
Based on the above method of calculation, we get the below payback period for various soalr PV systems
assuming the other factors as described above.
Type Payback –standalone (years) Payback – Grid connected
(years)
Solar PV (MW Scale) 6.89 4.72
Solar Thermal 6.89 5.64
Solar Rooftop 6.58 4.3
Solar Rooftop W/Subsidy 6.58 2.85
Table 1: Comparison of payback of standalone and grid connected systems in years
Thus, the payback time for different PV systems is within 5 years with the other assumptions about price
in place, making it an effective source to invest in.
IV. GDP
Gross Domestic Product (GDP) is the monetary value of all the finished goods and services
produced within a country's borders in a specific time period. With the import of coal for electricity
generation increasing every year due to scarcity in domestic coal in India, it affects a portion of
GDP and the constraints in access to electricity for manufacturing affects the GDP in an indirect
way. GDP is related do the energy demand in a way that economic growth leads energy

consumption positively [19] for developing nations with the assumption that India is in the middle
income group.
Since the trends in energy intensity for India going down on an average three scenarios are
analyzed.
1. Best case scenario – where the GDP growth is assumed to be on an average of 5 % which
is close to the recent trends in average growth. With the economic growth being in the
expected range, the energy intensity is assumed to be reducing in an expected way of
around 1.95% every year which is the 5 year average energy intensity change in India.
2. High economic growth case – where the economic growth is high (around 8 % ) and the
demand for energy is pretty high so that the energy efficiency improvement is not so high,
leading to a slow decrease in energy efficiency compared to the previous case. The change
is selected to be a decrease of around 1.70 %, selected based on the pledge of Indian
government in the Copenhagen climate conference in 2010 that the GDP emissions
intensity will be reduced by 20-25 % by 2020 compared to 2005 levels. This result in
around 1.70% reduction every year.
3. Low economic growth – where the GDP growth is low (around 2%) so that the energy
demand does not increase much leading to the effects in improving energy efficiency helps
reducing the energy intensity considerably around 2.27% every year which is the 1o year
average change in energy intensity in India. Coal rents are the difference between the
value of both hard and soft coal production at world prices and their total costs of
production. In 2013, these coal rents accounted for 1% of the GDP.2 Simplifying it further,
if we consider the basic relation of EXPORTS-IMPORTS=GDP, If the coal imports go
down due to gradual increase in adoption of Solar Power, the GDP will be boosted
significantly.
In general, it may be appearing that the GDP growth can be aided by moving away from coal
power thus leading to reduced import of coal. But the underlying problem in this aspect is that the
current production of solar components in the domestic manufacturing sector being very low in
spite of a high demand, most of the quantity of the components is to be imported which nullifies
the effect of switching from coal thus reducing coal imports in short term. This claim is supported
by the recent move by the government to not to implement anti-dumping duty[8] against imported
solar components from US, China, Chinese Taipei and Malaysia, thus paving way for or not
stopping an increase in import of the components. Though this is true for short term calculations,
this is going to help in long term energy sustainability.
V. NEW & TOTAL INSTALLED CAPACITY
It is clear from the data [7] available for the total and new installed capacity that there has been a
great rise in capacity of electricity generation over the last few years in India. From the data, it is
clear that coal power occupies a predominant share of around 60% and the share of Solar being a
meagre 1.3%. But the trend also explains that the Solar installed capacity has increased
exponentially in the last few years from almost a near zero level.

With the phase II of the JNNSM being implemented, the installed capacity of solar is going to
increase vastly as the government is working on the new ambitious target of 100GW of solar by
2022 [6].But on the other hand, as explained earlier about the plan for rising the economy of people
by utilizing the not so efficient, highly polluting, but cheap coal power, there are large scale
expansions in table to the tune of 500 GW [20]. Thus a mix of solar and coal power are going to
light the Indian homes and run the machines in Indian industries. Keeping this in mind, a study of
the growth of these power sources and their share in total capacity is done.
Assumptions made in this analysis are as follows
1. Since there is an expansion of about 500 GW of coal and 100 GW of solar, we assume that
this is happening over a period of 10 years (considering the delay in getting clearances and
problems in commissioning the plant which usually takes around 5 to 7 years for a coal
plant) and thus 50GW coal power capacity and 10GW solar capacity are being added for
10 years (Though the target for solar PV as per GOI is 100 GW by 2022, we assume a
delay of 3 years attributed to the dependence on land acquisition, availability of
components etc.). Also it is to be noted that other sources of energy such as wind (showing
constant growth of about 7% in India over a long time), Nuclear, Biomass and Hydro and
small Hydro power sources are also being utilized. So it is assumed that every year other
sources increase by 1% of the installed capacity for 10 years.
2. For the next 10 years (from 2026 to 2035), it is assumed that the new installed capacity of
coal is decreasing by 10% by considering the following factors contributing to that.
a. Availability of Coal reduces due to problems in mining
b. Cost of imported coal rises
c. Government is required to control pollution levels
d. Efficiency of coal plants increase due to regulatory measures
e. Solar becomes more profitable that Coal plant attracts no investments
At the same time it is assumed that the new installed capacity of solar power remains
constant at 10 GW per year for 10 years by cons considering the following factors
contributing to that.
A. Cost effective due to increased efficiency and low installation cost
B. Improved storage efficiency
C. Breakthrough in battery technology
D. Coal power is very costly compared to solar power
3. For the next 15 years (2036 – 2050), it is assumed that no new coal plants are opened, solar
is increasing at the same rate of 10GW per year and other sources are increasing at 2% of
installed capacity.
Based on these assumptions, by 2050 the generation share of coal will be around 40% solar
will be around 16.31 and other sources being 43%. This coincides with the projection made
by the Power Grid Corporation of India (PGCI) in their “Desert Power India -2050” [12]
plan. According to that projection, the share of coal power will be 32%, Solar will be 27%
and other being 40%.

Fig. 4) Comparison in % share of Coal, Solar and other types of power plants
VI. BASS DIFFUSION MODEL
The Bass Diffusion Model consists of a simple differential equation that describes the process of
how new products/services are adopted among the masses. The model presents a rationale of how
current adopters and potential adopters of a new product/service interact and influence each other.
The basic premise of the model is that adopters can be classified as innovators or as imitators and
the speed and timing of adoption depends on their degree of innovativeness and the degree of
imitation among adopters.
The following factors are assumed in calculation this diffusion model.
Innovation rate, P = 0.0005
Imitation rate, Q = 0.69
Maximum percentage = 20 % market share (which is slightly greater than calculated in the
capacity expansion explained in the previous section).
Formula for predicting the increase in diffusion
[ P + Q * (cumulative share in previous year) ]
= ______________________________________________
(Max % * 100) * (Max % * 100 – share in previous year)]
Using this formula and the above assumptions, the s-curve of the diffusion model is
obtained as below.

Fig. 15) The S- shaped market adoption curve for solar power generation technologies.
SENSITIVITYANALYSIS
The sensitivity analysis of the report can be done on the below aspects.
 The impact on LCOE of Coal power and solar PV power can be studied by changing the
factors taken into consideration including
o Increase in capital cost every year
o Increase in fuel cost
o Capital recovery factor
We have taken into the consideration the changes that can be made to the above factors
and in our excel model, we have Spin button to control the variation and study the effect
on LCOE by varying these factors.
 Economic growth and energy intensity are varied in a controlled manner to obtain the
energy demand because of these factors.
 Total and New installed capacity share are estimated by projecting the increase in the new
capacity every which can be varied to see the changes in the data and the corresponding
graph.

CONCLUSION
Based on the facts and assumptions mentioned above, we conclude that India is desperate to
provide access to electricity to all its citizens and to meet the demand of industries. In this view, it
is expanding both conventional (coal) and renewable generation capabilities.
But in spite of this trend, the estimates show that still it will depend on coal power heavily which
can have multiple effects ranging from high cost of energy due to scarcity of coal, decline in growth
due to power scarcity to health impacts due to pollution. So, this is the right time to divest its
interest in other avenues like reducing transmission and distribution losses (of around 23 % [21])
theft of electricity by industries in terms of infrastructure. On the other side, it is on the right path
to increase the penetration of solar power in electricity generation. It can invest more in
infrastructure, manufacturing sector, R&D of renewable sources including solar PV and wind in
order to boost domestic interest in manufacturing parts thus leading to a high growth economy,
improved standard of living and job opportunities.
Other ways to expand this research is to analyze the impact on environment and health of people
in a detailed manner and the dependency on water for these generation sources as water is going
to be a scarce resource in the future.
ABBREVIATIONS
GOI – Government of India
GP – Grid Parity
PV – Photovoltaic
Kw h – Kilowatt hour
JNNSM - Jawaharlal Nehru National Solar Mission
MNRE – Ministry of New and Renewable Energy
MW – Megawatt
GW – Gigawatt
LCOE – Levelized cost of energy
BTU – British thermal unit
MMBTU or MBTU – Million BTU

REFERENCES
1. GDP_PPP ranking http://databank.worldbank.org/data/download/GDP_PPP.pdf
2. Access to electricity (% of population) http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS
3. Muneer, T.; Asif, M.; Munawwar, S. (2005). "Sustainable production of solar electricity with particular
reference to the Indian economy"
4. Future of Indian Solar PV Industry, Published: 25 Jan 2010,by Lakshman Rao R Sutrave, Senior Research
Analyst Energy and Power Systems South Asia and Middle East.
5. http://www.mnre.gov.in/file-manager/UserFiles/mission_document_JNNSM.pdf
6. Deustche bank – crossing the chasm2015 https://www.db.com/cr/en/docs/solar_report_full_length.pdf
7. Central Electrification Authority http://www.cea.nic.in/installed_capacity.html
8. http://www.wsj.com/articles/india-drops-plan-to-impose-antidumping-tariffs-on-solar-cells-1408979660
9. http://www.ieefa.org/wp-content/uploads/2014/05/IEEFA-Briefing-Note_IndianElectricityCoalPricing_4-
May-2014.pdf
10. http://www.wri.org/sites/default/files/pdf/global_coal_risk_assessment.pdf
11. Assessment of the effect of high ash content in pulverized coal combustion, S. Jayanti, K. Maheswaran, V.
Saravanan. doi:10.1016/j.apm.2006.03.022
12. Desert Power India 2050 –An action plan by the Power Grid corporation of India
https://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/ourBusiness/SmartGrid/desert_
power_india.pdf
13. World Energy Outlook 2014- https://www.iea.org/Textbase/npsum/WEO2014SUM.pdf
14. World Bank GDP data (Current US $) http://data.worldbank.org/indicator/NY.GDP.MKTP.CD
15. LCOE calculation formula from NREL http://www.nrel.gov/analysis/tech_lcoe_documentation.html
16. Cost of Coal per MMBTU (http://www.lazard.com/PDF/Levelized%20Cost%20of%20Energy%20-
%20Version%208.0.pdf)
17. Heat rate for coal – suggested by EIA -
http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb1206#http://www.eia.gov/totalenergy/data/
annual/showtext.cfm?t=ptb1206
18. Harvard study on amount of coal required to produce one unit of electricity in India
http://www.hks.harvard.edu/m-rcbg/rpp/RFF-DP-12-25.pdf
19. Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach
20. http://www.wri.org/sites/default/files/pdf/global_coal_risk_assessment.pdf
21. Transmission and Distribution losses http://data.worldbank.org/indicator/EG.ELC.LOSS.ZS

Sankar&Surel_Final_Paper_TEM 492

More Related Content

What's hot (19)

Similar to Sankar&Surel_Final_Paper_TEM 492 (20)

Sankar&Surel_Final_Paper_TEM 492