The solar power auction in Andhra Pradesh that ended earlier this month has shown that solar power is finally here to stay. This was an international auction for a commercial, grid-connected plant of 500 MW, in which 30 Indian and foreign companies participated. While the lowest bid was at Rs 4.03 per unit, it is the plethora of bids at Rs 4.60 to 5.00 per unit that shows that solar power is now fully competitive with coal-based power, especially for meeting peak loads.
But all the bids were for setting up solar photovoltaic (PV) power plants, which can deliver power only during daylight hours, and at full efficiency for only a part of those. In effect, this amounts to 2,000 hours per year, at most. Since storing electricity is prohibitively expensive, photovoltaic power plants will never be able to meet more than the daytime peak demand for electricity.
To be viable, the bids in the auction had to be bundled with the guarantee of thermal power from the National Thermal Power Corporation (NTPC). This is why, despite its plans for creating 1,00,000 MW of solar generating capacity by 2022, the government is also planning to more than double its coal-fired power output by setting up 455 more coal-based power plants by 2030.
Given the huge social cost of burning coal — severe air pollution, increased mortality, destruction of the environment and expropriation of the poor from coal-bearing lands — should the government go down this road? Given the threat from global warming, will the international community even allow it to do so without imposing severe penalties upon it?
Had there been no alternative to coal for meeting the base-load demand for power, we would have had to grin and bear it. But there are alternatives now, and they are not confined to power generation alone, but extend to transport fuels as well. Concentrated solar thermal power (CSP), and the production of transport fuels through the gasification of biomass are two examples.
Solar thermal power is the older of the two forms in which the sun’s energy is being harnessed as electricity, but it has been neglected because of its higher initial cost. But, unlike PV, CSP plants can provide power day and night with little or no fossil fuel backup and, therefore, do not need to be paired up with conventional coal or nuclear power plants. The reason CSP plants can do this is that they are able to store the sun’s energy for long periods at very little cost, and with negligible loss.
A second advantage is that CSP plants can produce steam at well above the 593 degrees Celsius required for supercritical power stations and can, therefore, be used with the same ultramodern turbines that are being used in our ultra-mega power plants. This makes it possible to feed the power directly into the existing national grid, without having to step up the voltage. This reduces its distribution cost to a third of what it is for PV power.
This is not a theoretical proposition. As of early this year, there were 61 operational solar thermal power plants in the world, with a generating capacity of 4,228 MW. The crucial breakthrough came in 2011, when Gemasolar, a 20 MW Solar thermal power plant, began delivering 6,500 hours of power a year to a small city in Seville, Spain, for the past three years. This is 10 per cent more than what the coal-fired power plants have been delivering in India in recent years.
Gemasolar stores 15 hours of extra heat during the daytime to run the turbines at night and in bad weather. As a result, it keeps only a 15 per cent backup of natural gas to guarantee power on demand. By contrast, photovoltaic power can only be stored as electricity, which is a costlier alternative.
At current Indian costs and exchange rates, a Gemasolar clone set up in the Thar desert would be able to produce power at around Rs 4.50 per unit. This makes CSP appear more costly, but the appearance is deceptive for two reasons: First, PV panels lose half a per cent of their efficiency for every degree of temperature rise above ambient levels. This amounts to a 2 per cent fall in delivered power for every extra degree of heat. Second, PV power also needs to be stepped up to grid voltages. This increases the cost of transmission by up to three times.
All things considered, the government will be killing several birds with a single stone if it divides its 1,00,000 MW target for solar power into two sections, reserves the bulk of the extra-capacity solar thermal power generation, and issues separate tenders for each part. If it does not do so, it may end up, a decade from now, with too much midday peak power and not enough base-load power to support the growth of the Indian economy.