Monday, November 1, 2010

Towards a Solar strategy;Indigenization


Towards a Solar Strategy: indigenization?
Solar is coming of age .Every day a new forecast comes in, putting the date of commercialization earlier than quoted before. But Solar is still expensive. What to do and when to chip in, is a question that should be faced by the policy makers and all others who think about these issues. Early costs of entry are too high and often affordable, while one may miss the bus, if delayed unreasonably. This article puts forth some ideas and suggestions in this respect. We will examine the subject here also from a point of view of indigenization and local content. Employment has to be created for a country that has to look after now 176 million people and ever increasing. Indigenization can be cheaper, as we have seen in the case of India’s comparative advantage in Wind Turbine manufacturing .Let us first review what technologies and routes are there.
There are two main technologies; Solar Photo-voltaic (PV) and Solar Thermal. Both are not competing or mutually exclusive. Solar PV converts incident sunlight to electricity directly into a DC current which has to be converted to AC and often there is requirement for storage batteries. A significant portion of cost (up to 40%) can go towards these extras which are called Balance –of-the –System (BoS) costs in the technical jargon. There are to day mainly three technologies in PV; a) Mono-crystalline Silicon b)Poly-crystalline c)thin film. Mono-crystalline Si has been most popular with the highest efficiency that has reached almost 18%.It is also the most expensive but competitive. Poly-crystalline Si is a variant of how Silicon ingots are made.
In Mono Crystalline, one crystal is grown as an ingot, which is fairly expensive and energy intensive task. In Poly-crystalline, larger multi crystalline ingots are cast and then sawn into smaller cylinders. There is no scope here for going into full details and we restrict the detail here to its relevance with the issues we are dealing with. Only about ten companies are reportedly into the highly capital intensive upstream portion of this business. But there is a downstream component, which is labour intensive and where countries like us have a long term potential comparative advantage. This is of fabricating/assembling the solar panels from imported solar cells. Almost half of the cost (60%) of solar panel is other than solar cells. Other supplier industries like sheet or plexi Glass and backing material like plastic sheets and structural framing components and materials are going to be energized from such local assembly of Solar panels. From the perspective of developing countries mono or multi-crystalline Si technologies are the best bet . This would be one of the ala-garment industries of the future with a potential for very significant employment. It is quite simple to assemble panels. There are many DIY approaches and even in Pakistan, an American professor trained many workers recently on the job in an improvised workshop , product of which were later installed and are working satisfactorily. Yet producing any product, however simple it may be, in reasonably high volume and with consistent and reliable quality, would require investments and participation of private sector. In India, there are several plants making these Solar panels, both for domestic demand as well as exports.
Apart from local employment perspective, there is another imperative for local production. Once Solar Power becomes really competitive, the domestic demand in the producer countries may get so heated up that developing countries like Pakistan may not get the solar supplies and products at all. What has happened in the case of Wind Turbines is quite instructive. There are many Approved and ready projects of Wind Power, but could not be implemented due to lack of availability of willing suppliers even with longer agreed lead times. Only now when there is a thaw in the Wind turbine market, due to the rush and switch to Solar Power that the vendors are now attending to our projects. Similar has been the case of other developing countries except India which has a complete local manufacturing capability in large volumes , the latter has managed to install 11000 MW of Wind Power at prices 50% lower than imported ones.
There are other Solar PV technologies fast coming up where there would be total automation, and no scope for labor surplus countries. Flexible Thin-Film continuous sheets are being produced in a roll-to roll environment; a roll of web material, as in a printing press, is fed in at one end and a role of PV panel taken out at the other end. It has only to be framed as one frames a painting. These are also flexible and can be mounted on curved surfaces.
Solar PV cells mainstay would be in stand alone distributed domestic and commercial lighting system, although many grid connected solar PV farms of exceeding 100 MW are already in operation and more are coming up every day. The jury is still out if PV would be able to supply the volume of utility power that is required. Besides industries require energy in primary form as heating or cooling , where PV is less competitive, although there are split AC systems in the market of 18000 btu per hour working directly on Dc power produced by solar PV.
Solar Thermal is the answer to the sector that may not be adequately catered to by Solar PV. In Solar Thermal, Sunlight is concentrated by reflectors at a point or line, and the circulating medium that can be air, water or salt is heated to relative high temperatures varying between 70deg C to 500degC.Initially only solar water heaters were developed in this sector and remains to be the mainstay of it. However large Power Plants have been built for more than a decade now. Once water or any other liquid is heated at sufficiently high temperatures of 300-500 deg C, the rest is standard steam turbine electricity generation. All one may have to do is to replace the coal or oil or gas fired boiler with a Solar Heating/boiler system. Cost of a complete system producing electricity is high but competitive generally with Solar PV. There is another advantage to this system .Thermal energy can be stored much more economically and large volumes than electricity produced in PV.^.5 hours of storage at full load has become a common feature of large scale utility plants of 50-100 MW.
Spain has gone into it with much more commitment and investments. More than a dozen plants of 50 MW are already working there, and more are coming in, although under a highly supportive subsidy system in the form of very high feed-in tariff. This is obvious we cannot afford this kind of feed-in tariff, already there is a lot of social unrest on unaffordable tariff, which otherwise is quite competitive with other countries. GOP has been giving subsidies of Rs 200 billion per year to the electrical sector to sustain the existing tariff level. These subsidies have infact paid for the exceptionally high T&D losses and theft and pilferage. So theoretically, GOP could have afforded some subsidies to encourage Renewables and foster technology development, had these kinds of losses not been there. These subsidies now have to go under IMF pressure and tariff is to be raised. But some subsidy can be maintained on the account of Feed-in Tariff for renewables, if a reasonable scheme is developed for creation and support of this technology.
There are three technologies within Solar Thermal, largely depending on what kind of concentrating system is employed. That is the reason, it is also called Concentrated Solar Power(CSP), although CSP systems have been used in Solar PV as well.The three technologies are;
1)Parabolic troughs
3)Solar towers
Essentially the difference is whether one focuses sunlight on a point like a furnace or a boiler or one does it in on a line or tube carrying a fluid. Parabolic troughs have been more popular, cheaper and are now an established technology. Parabolic troughs are more prone to indigenization, as it is mostly sheet metal work and structures and framing made out of steel. There is some glass work or plastic for reflectors requiring electroplating. Considerable know-how both in formal and informal sector exists in Pakistan and other developing countries like us in this area. It is labor intensive as well. A number of our sick industries in Public sector could be revived by technology arrangements and orders in this field. Also private sector and informal sector can be strengthened.
Morocco, Egypt, Iran , Algiers and recently UAE have gone into this, but in a very cost effective way. They, except UAE, have launched solar –augmented combined cycle plants running on gas. Parabolic Troughs have been installed to cater to10-20% of the total fuel requirements of the combined cycle plants. We can do the same in one or more of our existing plants.
Admittedly, there is more solar insolation in countries around Sahara than in South Asia. DESERTEC project has been launched, presently under negotiation, through which electricity produced through Solar Thermal plants installed in Sahara, would be transmitted to Europe through HVDC( a cost effective DC technology as opposed to conventional AC) network, to meet some 20% of the power needs of Europe. Although Terrorism issues may prevent or delay the implementation of DESERTEC, the faith and confidence in Solar Thermal is adequately demonstrated by this EU project. DESERTEC like projects are being encouraged in other countries which have desert. Regional counterpart organizations and arrangements like DESERTEC-India, Asia have been formed. We have Thar, Thal and Cholistan. If Thar Coal gets going finally, there would not much scope there for any thing else. Thus Cholistan can be readied for such ventures.
Concluding Solar Panels Assembly and Solar Thermal retrofitting are the areas where initiatives may be taken by the policy makers, public sector industries and private sector as well. I would be available for advice for those who may require it.