In the first quarter of 2024, India plans to put out a tender for renewable energy that includes not just a carve-out, but the largest ever, requiring over 50% to be supplied by Concentrated Solar Power (CSP), the thermal form of solar electricity.

There is renewed policy interest in CSP as a longer-duration source of solar energy, as it stores solar energy as heat at a lower cost than batteries. It generates from thermal power like legacy thermal power stations burning coal or gas for the heat – except using stored solar heat.

India’s CSP tender

“This tender will be in the first quarter of 2024,“ said Rajan Varshney, Deputy General Manager at India’s largest electricity provider NTPC.

“The 50%-plus carveout is designed to finally scale up CSP with thermal storage, for firm and dispatchable renewable power. With the tender specifically stating that the IPPs have to have over 50% of CSP, developers across the world, and here in India, have expressed interest. Some even provided their estimate. Firm power from CSP must be given priority getting on the grid over the intermittent renewables like PV and wind. ”

Smart policy to reduce risks for developers

India plans to provide as much certainty as possible to drive down the costs of CSP to the lowest possible by providing inducements similar to those that reduced offshore wind prices in the North Sea over the last decade, when that then-new technology was at a similar stage of deployment as CSP.

“We will try to give for free all the clearances and we can guarantee grid connection, and offer long term contracts and facilitate loans for them,” he said.

“Already, in those areas where the DNI is more than 1,800 kWh/m2a, some entities are acquiring land for a 99-year lease to the developer so that all the IPP has to do is build, own, and operate. He doesn’t have to transfer. He doesn’t have to bother about all these other things like land acquisition and power evacuation.”

Varshney said that India’s new tender ultimately paves the way to build even 100 GW or more of CSP, and at a much lower LCOE than coal. With local component manufacturing, India would have more energy security. The cost for industrial heating and cooling could also be expected to come down, because a lot of industrial heat load could shift from fossil energy to using direct CST heat or steam. This shift would smooth peak load and reduce utilization of power generation and transmission assets.

Renewables won’t need to co-locate

India has strong grid inter-connectivity across the country, which can help in utilizing the best sites for PV, CSP, or wind. Windy regions might not be sunny, and even the two solar technologies have different requirements. Photovoltaics use GHI (Global Horizontal Irradiance) and Concentrated Solar requires high DNI (Direct Normal Irradiance) and the same locations may not be ideally suited to both.

“So in India, they will not have to be co-located,” he said. “PV and wind and CSP can be located at different locations and even in different regions. But some continuous hybridized power can be supplied leveraging the well planned grid inter-connectivity.

India’s potential

India has substantial capacity for a clean energy transition, with the potential to generate and utilize over 250GW through CSP alone, in addition to Hydro, PV, wind and biogas-based power. And it has no potential problems with a new transmission buildout. The grid is largely centrally managed, with no roadblocks, making India easier to decarbonize than the US with a similar land mass.

“There is a problem with the grid there,” he said. “They have different rules in different states and they all have different interconnection rules. But in India, this is not the case.”

Like many nations, India rushed to build PV as prices crashed. But Varshney has long advocated for more CSP in India instead of batteries to complement its rapidly increasing PV.

“Consensus has been built, so that’s why I say I’m hopeful,” he said.

“Over the last few years, my thinking has influenced the relevant persons here who have control over this, and I’m happy to tell you that now they are all aligned with this and some have even themselves started promoting the importance of CSP to the world and motivating vendors to go for it. In the new initiatives department, I can make contact across the world and bring these ideas and make ways to implement these either in our organization or through other organizations under our various ministries.”

But environmental concerns and national energy security also inform his thinking: “For India, we cannot be more dependent on one country, which has controlled most of these battery resources, lithium, cadmium, rare earths,” he said.

“And we are in a better geographical position, and we have 330 days of sun available and a lot of areas with high DNI. So we should utilize these advantages and make everything in India. Thermal plants like CSP can last for for 70, 80, 100 years. Glass doesn’t corrode. It is quite inert. And in 100 years, we’d have lots of salvage-value from glass. It can be melted and potentially new glass that’s worth many times more by then. And molten salt remains molten salt all through the life of the plant, and even after dismantling, it can be made into fertilizer and sold for many times more than the initial CAPEX brought in.”

Economics is also behind his conviction. Varshney is concerned that too little attention is paid to the hidden costs of PV. “To produce and store power it actually results in a many times greater area being needed to deploy these multiple sets of PV,” he said.

He explained how since each solar farm only generates for a portion of a day, to provide 24×7 power, there must be multiple solar farms built, and each pays for grid access that gets used only for one-fifth of each 24-hour period, or additional investment for storage has to be included to time-shift their power from sun hours.

“Actually, there is no other way out,” he summed up. “No, we cannot depend on large-scale battery storage, and pumped hydro also has its issues, environmental issues, and cost issues. How much jungle has to be cut, how much digging. How much soil pollution, air pollution we’d have to do. We cannot just live on intermittent PV and claim that we are a clean energy country. We have to have CSP with the thermal storage. It has to be implemented.”

Susan Kraemer