Industry groups call for solar thermal technology to expand in 'sun belt' around world as Spain leads the field

Solar power stations that concentrate sunlight could generate up to one-quarter of the world's electricity needs by 2050, according to a study by environmental and solar industry groups. The technology, best suited to the desert regions of the world, could also create hundreds of thousands of new jobs and save millions of tonnes of CO2 from entering the atmosphere.

Concentrating solar power (CSP) uses mirrors to focus sunlight onto water. This produces steam that can then turn turbines and generate electricity. It differs from photovoltaics, which use solar panels to turn sunlight directly into electricity and can operate even on overcast days. CSP only works in places where there are many days with clear skies and is a proven, reliable technology.

At the end of 2008 CSP capacity was around 430MW, and worldwide investment in the technology will reach

€2bn (£1.8bn) this year, according to Sven Teske of Greenpeace International and co-author of the report. He said investment could increase, under a relatively moderate scenario, to €11.1bn by 2010 and provide 7% of the world's generating capacity by 2030. By 2050 investment could reach €92.5bn, creating almost 2m jobs by 2050 and saving 2.1bn tonnes of CO2 every year.

"Due to the feed-in tariff in Spain and a few schemes in the US, this technology is actually taking off and we wanted to highlight that we have a third big technology to fight climate change — wind, photovoltaics and now CSP," said Teske.

Spain is leading the field on CSP: more than 50 solar projects in the country have been approved for construction by the government and, by 2015, it will generate more than 2GW of power from CSP, comfortably exceeding current national targets. Spanish companies are also exporting their technology around the world.

Environmentalists argue that many countries in the "sun-belt" around the equator would benefit from CSP technology — including desert regions in the southern United States, north Africa, Mexico, China and India.

The new study, carried out by Greenpeace International, the European Solar Thermal Electricity Association and the International Energy Agency's (IEA) SolarPACES group, looked at three scenarios of future growth in CSP. The first was business-as-usual reference scenario that assumed no increases at all in CSP; the second continued the CSP investments seen in recent years in places such as Spain and the US; while the advanced scenario was most optimistic, removing all political and investment barriers to give figures for the true potential of CSP.

Under the third, most optimistic, scenario there could be a giant surge in investments to €21bn a year by 2015 and €174bn a year by 2050, creating hundreds of thousands of jobs. In this case, solar plants would have installed capacity of 1,500GW by 2050 and provide 25% of the world's electricity capacity. Even in the second scenario, which sees only modest increases, the world's combined CSP capacity could reach 830GW by 2050, representing up to 12% of the world's energy generation needs.

Teske acknowledged that these estimates were far higher than official figures from the IEA. It says that by 2050, CSP would provide only0.2% of global power generation. But Teske added that the IEA analysis does not assume any increases in production capacity in the next few decades, hence CSP forms a very small part of the overall energy mix.

The new report also said that CSP technology was improving rapidly, with many new power plants fitted with storage systems for steam so that they could continue to operate at night. In addition it said the cost of the electricity produced , currently at €0.15 to €0.23 a kilowatt, would fall to €0.10-€0.14 by 2020 if governments continued to support the technology with incentives such as feed-in

Is India on the brink of becoming a solar superpower?   Not quite yet. But, significantly, the government is pondering a massive energy transition that could deliver 20,000 MW of solar power by 2020 and 200,000 MW by 2050, according to a long-awaited draft strategy leaked to The Hindu.   The 200,000 MW goal is 30 percent more than India's current installed power generation capacity across all energy sectors, which stands at nearly 150,000 MW. Solar makes up just 3 MW of that.

If the government's "National Solar Mission" moves forward, it would be the most ambitious solar scheme of any nation, by far. At the very least, it deserves strong consideration.

India, the world's sixth largest energy consumer, is in dire need of a ramp up of generation capacity. By 2020, the nation will require 400,000 MW of electricity. Currently, efforts are in the works to make good on the government's pledge of "Power for All by 2012," which promises to provide electricity to all rural households. Just fulfilling that would require 50,000 MW of additional capacity over the next three years.

The fact that India must build, and not rebuild, its entire energy infrastructure puts it in a unique position to establish a green economy. And solar seems a no-brainer choice to focus its investments.

Its potential in India is off the charts. With 250 to 300 clear sunny days a year, India's solar resource capacity is a thousand times greater than the nation’s likely electricity demand by 2015.

Tapping a tiny fraction of that could turn India into a global renewables powerhouse, and an engine for growth and green jobs.

The government's solar mission would be implemented in three phases. Phase one, from 2009-2012, would target 1,000 MW of new capacity. From 2012 and 2017, the nation would focus on developing utility-scale concentrating solar plants to accelerate the ramp up. Finally, between 2017 and 2020, the aim would be grid parity, the point at which solar becomes as cheap as fossil fuels, to get to the 20,000 MW mark. By 2050, the full infrastructure would be in place.

So what would it cost? Around $18 to $22 billion over 30 years, according to The Hindu.

What a bargain – and a giant underestimate.

A March 2009 Greenpeace report, which analyzed a broader energy scenario, found that wealthy nations could help enable a massive renewable energy uptake in India by 2030 through an international Feed-in Tariff Support Mechanism. Specifically, for a cost of $195 billion in international financing spread out over 20 years (not including capital costs), India could add 310,000 MW of new renewable energy capacity. Around 45 percent of that would come from solar.

A December 2007 report by the The Energy and Resources Institute (TERI) concluded that it would cost $5.4 trillion for India to get to a 75 percent "renewables" share, includng nuclear.

Whatever the costs, most of it will be in up-front investments. As Sven Teske, author of the Greenpeace report, told the WorldWatch Institute:

"Over 30 years, India would make money."

And the truth is, any delays in realizing a big solar vision are not merely about cash but rather political will, he said. In fact:

"If India leveraged 1 paise, or one-hundredth of a rupee, on every kilowatt hour generated by coal-fired utilities, we would have enough money to implement all renewables here in India."

India is well known for rhetoric over its renewable pledges. There's still a scarcity of real targets and goals in its vague climate plans, and you won't find dollar commitments. V. Subramanian, who CEO of India's Wind Energy Association, explained why:

"The government of India does not currently have the machinery to implement such a strategy at a national level. This has to be done by state governments, and as yet the engagement between the two on this is not strong."

What will it take to get this solar mission accomplished?

Solar Plan Could Revolutionize India's Energy Sector

India’s solar resources are among the most abundant in the world, with more than 1 million square miles (3 million square kilometers) of land spread beneath an average 250–300 clear sunny days a year.   A leaked early version of the Indian Government's national solar energy plan indicates that India may be thinking more ambitiously about a "clean energy" roadmap than was previously anticipated.

The draft strategy, first published in The Hindu, outlines plans for a national target of 200,000 megawatts of solar generation capacity by 2050. This is 1.3 times India's current installed power generation capacity of 150,000 megawatts across all energy sectors.

Although the Prime Minister's Council on Climate Change is yet to approve the plan, and the Ministry of New and Renewable Energy has not confirmed the claim, this possibility raises important questions for India's energy future, namely: Could a large-scale transition to solar power and other renewables be economically and technically possible? And if so, what would it take?

India is home to one of the most abundant solar resources in the world, with 2.97 million square kilometers of tropical and subtropical land and an average of 250-300 clear sunny days a year. As such, solar power offers significant potential to meet a large share of the country's energy needs using both centralized and decentralized production.

Such changes, if realized, could dwarf current solar leaders Germany, Spain, Japan, and the United States in both domestic market size and export manufacturing. They would also create a hefty job market in solar manufacturing and installation.

According to the leaked document, India's "solar mission" will include measures for rapidly expanding the use of small-scale photovoltaic panels, solar lighting systems, and commercial-scale solar plants, in order to drive down costs and encourage domestic solar manufacturing. The efforts would occur in both rural and urban areas and target residential as well as commercial users. The plan also proposes scaling-up centralized solar thermal power generation, with the aim of achieving cost parity with conventional grid power by 2020 and the full necessary energy infrastructure by 2050.

With India's installed solar capacity currently at only 3 megawatts, this would be the most ambitious solar plan that any country has laid out so far. The scope of the initiative would also match and ultimately far exceed India's plans for nuclear power generation.

Several recent studies have outlined wider renewable-energy scenarios for India, including Energy [R]evolution, a report released by Greenpeace and the European Renewable Energy Council in March and Mitigation Options for India: The Role of the International Community released by The Energy and Resources Institute (TERI) in December 2007. Both reports encourage the transition to solar power as a critical way for India to boost its energy security and help to reduce greenhouse gas emissions globally.

Both the Greenpeace and TERI studies operate from the premise that global carbon emissions must peak by no later than 2015 to avoid dangerous emission levels. They make the case that it is not only technically and economically feasible for India to make the shift to renewable energy sources (if this rollout is combined with energy-efficiency measures), but also prudent to begin this transition now.

There are several reasons for this urgency. First, the reports note that India's power-generation infrastructure is undergoing rapid expansion to meet national development objectives, with the country still facing unmet power demands that equate to as much as 80 percent of current installed capacity. Second, they point to rising energy security concerns as energy prices go up and supplies shrink, making it a ripe time to shift to a new model of energy production.

Crucially, however, once the high upfront investment costs have been circumnavigated, the shift to renewables would actually be cost positive, the reports conclude. "The fuel savings up to 2030 would amount to $2,170 billion, seven times more than the additional investment costs," said Sven Teske, an author of Energy [R]evolution. "Over 30 years, India would make money."

Both reports offer recommendations for how such a shift could happen. Proposed steps include a widespread scaling-up of both decentralized energy production and centralized renewable energy production (particularly solar photovoltaics, concentrating solar power, wind, and biomass); the use of combined heat-and-

power systems at the point of generation; the decarbonization of transport fuel (with an emphasis on electric vehicles and other sustainable forms of transportation); an increase in research and development across energy segments; and improvements in the energy efficiency of buildings, transport, appliances, industrial processes, and power transmission.

They also suggest granting priority access to the grid for renewables, creating an innovative legal structure for incentivization and taxation, and rallying both public support and international technological and financial assistance to accelerate fast and effective change.

The reports differ in their approach to nuclear energy, with TERI stating that nuclear will play a key role in India's power sector in the medium to long term, and the Greenpeace study not including it at all.

According to both reports, the primary obstacles facing India's rapid shift to renewable energy are the upfront investment costs required and the need for strong political will.

On the issue of investment costs, TERI found that a shift to a 92-percent renewables share in India's energy supply would result in a doubling of domestic carbon emissions by 2031 (compared with a seven-time increase under the current trajectory) and would cost an estimated 457 trillion Rupees (US$9.6 trillion). This is contrasted with a 75-percent renewables share, which would result in a tripling of emissions by 2031 and cost an estimated 260 trillion Rupees ($5.4 trillion).

Solar would be pivotal in both cases, with concentrated solar power alone making up 61 percent and 31 percent of the total mix for the two scenarios, respectively.

Energy [R]evolution concluded that it is possible for 69 percent of India's electricity and 70 percent of India's heating and cooling needs to come from renewable sources by 2050 - but capturing this opportunity "would require at an additional investment of $154 billion," Teske said.

Meanwhile, the government's leaked national solar strategy proposes investments amounting to some 85,000-105,000 Crore Rupees ($18-22 billion) over this same period. This would clearly fall far short of the estimated funding needs for such a massive and rapid rollout of solar energy, if compared with the estimates above.

Both Greenpeace and TERI suggest the use of international financing mechanisms to bridge the cost gap, a proposal in line with the Indian government's rhetoric in the ongoing international climate negotiations. These proposals include the full utilization of a carbon-credit mechanism such as the Kyoto Protocol's Clean Development Mechanism (CDM), as well as the establishment of a $200 billion international fund "supported by a feed-in tariff mechanism," according to Energy [R]evolution.

"The proposed feed-in law structure, which would be combined with an emission trading mechanism, allows for the upfront investment costs to be met and for planning from local project developers, thanks to a fixed-return guarantee," Teske said.

With regard to the need for political will, there are certainly signs that change is afoot. In addition to the government's potential new solar target, initiatives under way across India include the development and implementation of energy-efficiency improvements for appliances, buildings, power generation, and industry; a revised national policy to upgrade and "smarten" much of India's power grid; a growing portfolio of CDM projects; and emerging leadership in states like Maharashtra, Tamil Nadu, and Rajasthan to adopt and implement progressive renewable energy policies.

Civil society and the private sector are increasingly active in implementing renewables and smart energy projects across many parts of the country as well. However, some observers remain skeptical about the feasibility of India's energy transition plans, with concerns running deeper than the need for finance and strong policy frameworks.

V. Subramanian, former Secretary of the Ministry of New and Renewable Energy, said the strategy outlined in Energy [R]evolution would face significant implementation challenges. "The government of India does not currently have the machinery to implement such a strategy at a national level," said Subramanian, who now serves as CEO of India's Wind Energy Association. "This has to be done by state governments, and as yet the engagement between the two on this is not strong."

In Mr. Subramanian's view, financing is not the key issue. "If India leveraged 1 paise, or one-hundredth of a rupee, on every kilowatt hour generated by coal-fired utilities, we would have enough money to implement all renewables here in India," he said.

It is clear that changes toward a renewable energy future are under way in India - but is the current pace fast enough? Many environmentalists argue that it is still not in line with the stated need and opportunity, and that some barriers are not being addressed. Targets such as those outlined in the leaked solar energy report and recommended in the recent renewables studies would raise the bar of opportunity for scale, pace, impact, and actionable political will. However, India would need a significant machinery overhaul to implement such a change, relying upon the support of international collaboration.

But there's a problem of mismanagement at India's Ministry of New and Renewable Energy that's crippling clean energy development, according to a new report from the London-based Commonwealth Business Council (CBC) and the Indian Institute of Management (IIM).

And the result is that vital clean technology dollars are going elsewhere.

From poor research and development (R&D) to non-existent basic data and non-functioning projects, the Indian renewables industry is dogged by a catalogue of mismanagement and errors that are stopping vital private investments in the sector.

According to a January 2009 report by the Cleantech Group, Indian cleantech companies raised $277 million in 2008 -- a drop of 20 percent from 2007.

True, investment in the sector saw an overall decline last year. But not in China, a competitor for India, which saw a 22 percent increase in cleantech financing in 2008. China snatched up five percent of the global total, while India accounted for three percent.

Here are some of the most blatant bureaucratic barriers to renewables growth on the subcontinent, from the CBC-IIM study:

The solar sector is hamstrung by acute land scarcity. In rural India, proposed solar plants are losing out to competing infrastructure projects also in need of land.

The wind sector suffers from a lack of real data on where the windiest parts of India actually exist. Out of the 553 wind-monitoring stations that are installed, only 53 are operational.

The biomass market is "completely unstructured." There is no formal way of meeting demands or checking the quality of products. Poor local data on waste makes it difficult for companies to decide what type of waste-power plants to design.

This isn't to say there hasn't been progress in developing clean energy sources. India's ministry for renewable energy development remains the only one of its kind in the world -- even if it is a tangle of "green" tape.

And the nation's wind energy capacity shot up significantly in recent years. In 2007, new wind capacity jumped 29 percent in India, according to the Global Wind Energy Council. In 2008, it rose another 23 percent.

Still, non-hydro renewables remain marginal players in India's great energy game, making up around eight percent of grid capacity -- a pittance of its total installed capacity of 146,000 megawatts.

And as far as wind goes, China overtook India by a huge margin in 2008 for the first time, in terms of both new capacity and total installed capacity.

Most disappointing is that solar power accounts for a measly 0.5 percent of India's total installed renewable energy.

To boost that percentage will take far more than ending bureaucratic inefficiencies.

It's going to take a home-grown revolution in cost and technology to make clean sources as cheap as coal. Think Tata Nano, but for solar installations not cars. That will take time.

For now, India needs consistent climate policies from the national government, at the very least, with hard targets and guidelines, not the big vision rhetoric we have seen to date. That could help lure private investment in the near term.

Interestingly, the nation seems to be making progress on that front.

India's in the midst of elections. And for the first time in its election history, the manifestos of the two leading major parties -- The Indian National Congress (INC), head of the current ruling coalition, and the Bharatiya Janata Party (BJP) -- have devoted space to climate change and renewable energy.

The BJP proposes to invest heavily in developing non-fossil fuel-based clean energy sources, especially for electricity production. Our goal will be to add at least 120,000 MW of power over the next five years, with 20 per cent of it coming from renewable sources.

The Congress-led UPA government has already unveiled a National Action Plan for Climate Change. It is an acknowledgment of our responsibility to take credible actions within the overall framework of meeting the development aspirations of our people for higher economic growth and a higher standard of living. This action plan will be implemented in letter and spirit.

There's still a scarcity of real targets and goals, and you won't find dollar commitments, à la President Obama's $150 billion clean energy pledge. But it's no less a highly positive development.

And notably it's coming from voters. Said Surya Sethi, principal energy adviser for India's Planning Commission, to the Worldwatch Institute:

"The manifestos of the political parties merely reflect what the party perceives as key concerns of its voters...The growing middle class, with its greater reach to media and other sources of information, simply demands more and better attention to such concerns."

Wealth and job creation hang in the balance. As Dr. R.K. Pachauri, head of the UN IPCCC said of India's massive renewables opportunity:

"With the developed world unwilling to give up the short term benefits accruing from the use of coal, India can emerge a major leader as far as new technology is concerned, besides also emerging a leader in combating climate change."