ACRONYMS AND ABBREVIATIONS · o Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) 2005: Supports extension of electricity to all rural and below poverty line households through a 90%

ProDoc: UNDP GEF Concentrated Solar Heating Project (India CSH) 1

ACRONYMS AND ABBREVIATIONS

APR Annual Project ReviewAWP Annual Work PlanBAU business-as-usualBEE Bureau of Energy EfficiencyBIS Bureau of Indian StandardsCBB Central Boilers BoardCDM Clean Development MechanismCII Confederation of Indian Industries CP Country ProgramCPAP Country Programme Action PlanCPC Compound Parabolic ConcentratorCPRI Central Power Research InstituteCSH Concentrated Solar HeatingCSP Concentrator Solar PowerCSTB Centre Scientifique et Technique du BâtimentC-WET Center for Wind Energy Technology DEA Department of Economic AffairsDPR Detailed Project ReportDST Department of Science and TechnologyEOI Expression of InterestEOP End of ProjectERC Evaluation Resource Center (UNDP)ESCOs Energy Service CompaniesFACE Fund Authorisation and Certification of ExpendituresFraunhofer ISE Fraunhofer Institute for Solar Energy SystemsFSP Full Scale ProposalFYP Five Year PlanGBC Green Business CentreGEF Global Environment FacilityGHG greenhouse gas GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ, formerly GTZ)GOI Government of IndiaGW Giga WattIEA International Energy AgencyIIT Indian Institute of TechnologyIITB Indian Institute of Technology BombayINR Indian rupee (currency of India)IREDA Indian Renewable Energy Development AgencyISO International Organization for StandardizationITW Institute for Thermodynamics and Thermal Engineering, University of Stuttgart,

GermanyJNNSM Jawaharlal Nehru National Solar Missionkgoe kg of oil equivalentkWth kilo Watt ThermalLFR Linear Fresnel ReflectorM&E Monitoring and EvaluationMNRE Ministry of New & Renewable EnergyMoEF Ministry of Environment and ForestsMt Million tonnesMTE Mid-Term EvaluationMtoe Million ton of oil equivalentMW MegawattNABARD National Bank for Agriculture and DevelopmentNAPCC National Action Plan on Climate ChangeNFTDC Non Ferrous Technology Development CentreNPC National Project CoordinatorNPD National Project DirectorNPM National Project ManagerOECD Organisation for Economic Co-operation and Development


PAC Project Advisory CommitteePCRA Petroleum Conservation Research AssociationPIF Project Identification FormPIR Project Implementation ReportsPMU Project Management UnitPPG Project Preparatory GrantPPP Purchasing Power ParityPPR Project Progress ReportsPSC Project Steering CommitteePTC Parabolic Trough ConcentratorQPR quarterly progress reportsR&D Research and developmentRGGVY Rajiv Gandhi Grameen Vidyutikaran Yojana1

RPO Renewable Purchase ObligationRTA Regional Technical Advisor (UNDP)SBAA Standard Basic Assistance AgreementSEC Solar Energy Centre SERC State Electricity Regulatory CommissionSNA State Nodal AgencytCO2 tonne of carbon dioxideToRs Terms of ReferenceUAC Unit Abatement CostUNDAF UN Development Assistance FrameworkUNDP APRC UNDP Asia Pacific Regional CentreUNDP CO UNDP country officeUNDP United Nations Development ProgrammeUNFCCC UN Framework Convention on Climate ChangeUSAID US Agency for International DevelopmentUSD or US$ US Dollar

1 RGGVY is Government of India’s programme for rural electrification.


TABLE OF CONTENTS

PART A. SITUATION ANALYSIS........................................................................................................... 4

1. CONTEXT AND GLOBAL SIGNIFICANCE: ENVIRONMENTAL, POLICY AND INSTITUTIONAL ...............................42. CONCENTRATED SOLAR HEAT FOR PROCESS APPLICATIONS AND BASELINE ANALYSIS............................. 93. BARRIER ANALYSIS ......................................................................................................................... 204. KEY STAKEHOLDERS .......................................................................................................................23

PART B. PROJECT STRATEGY............................................................................................................ 27

5. PROJECT RATIONALE, DESIGN PRINCIPLES AND STRATEGIC CONSIDERATIONS .............................276. POLICY CONFORMITY AND COUNTRY OWNERSHIP................................................................................287. PROJECT OBJECTIVES, OUTCOMES AND OUTPUTS ................................................................................288. KEY INDICATORS, RISKS AND ASSUMPTIONS .......................................................................................469. COST-EFFECTIVENESS; GEF INCREMENTAL REASONING........................................................................4810. SUSTAINABILITY AND REPLICABILITY .................................................................................................. 4911. PROJECT RESULTS FRAMEWORK.......................................................................................................5112. TOTAL BUDGET AND WORK PLAN..................................................................................................... 6213. MANAGEMENT ARRANGEMENTS ..................................................................................................... 7114. MONITORING FRAMEWORK AND EVALUATION ................................................................................... 7515. LEGAL CONTEXT............................................................................................................................78

PART C. ANNEXES............................................................................................................................ 79

ANNEX A. RISK ANALYSIS.......................................................................................................................79ANNEX B. AGREEMENTS........................................................................................................................85ANNEX C. TERMS OF REFERENCE .............................................................................................................. 88ANNEX D. EMISSION REDUCTIONS CALCULATION.........................................................................................91ANNEX E. SOLAR CONCENTRATOR TECHNOLOGIES ......................................................................................93ANNEX F. SUMMARY OF 11 ENERGY AUDITS & 4 INDIAN CSH CASE STUDIES ............................................... 94ANNEX G. LIST OF CSH INSTALLATIONS IN INDIA....................................................................................... 101ANNEX H. SUMMARY REPORT ON STAKEHOLDERS CONSULTATIONS.............................................................. 105ANNEX I. LIST OF CSH MANUFACTURERS ................................................................................................. 108ANNEX J. LIST OF LEADING INTERNATIONAL GROUPS INVOLVED IN TESTING OF SOLAR CONCENTRATORS.............110ANNEX K. SEQUENCE OF ACTIVITIES FOR DEMONSTRATION AND REPLICATION PROJECTS .................................. 111ANNEX L. PROJECT ANNUAL TARGETS............................................................................................... 113


PART A. SITUATION ANALYSIS

1. CONTEXT AND GLOBAL SIGNIFICANCE: ENVIRONMENTAL, POLICY AND INSTITUTIONAL

India’s Energy Scenario

1. India is currently the second fastest growing major economy and is the fourth largest in the world in purchasing power parity (PPP) terms, with steady progress achieved since the start of economic liberalisation reforms in 19912. The International Monetary Fund predicts 8.3 % growth for India for the year ending 31 March 20113. The Eleventh Five-Year Plan (2007-2012) predicts an energy demand of 547 Mtoe in 2011-12 and between 1,350-1,700 Mtoe by the year 2030. The per capita primary energy consumption in India in 20084 was about 540 kgoe/year, which is well below that of developed countries. While the country’s per capita energy consumption will remain much lower than that of industrialized countries for the foreseeable future, India’s total energy consumption is expected to continue to increase significantly for many decades as it continues to develop.

2. The industrial sector is the second largest energy consuming sector in India after the residential sector. Industrial sector demand was 114.8 Mtoe of energy in 2008, which is 28% of the total energy demand of the country5. Growth in industrial energy demand is projected to grow at a rate of 4.7% per year during the period of 2005-2015. International Energy Agency (IEA) projections are that the industrial sector’s energy demand will increase to 34% of India’s total energy demand in 20306. Electricity is a relatively smaller constituent of industrial energy demand compared to other major economies; in 2008, only 21% of industrial energy demand was in the form of electricity (Figure 1). The rest of the demand was met by fuels – coal, biomass, oil products and gas, which indicate that a large amount of energy in the industrial sector is used to provide thermal energy/heat. Oil products accounted for 20% of total industrial demand.

Figure 1: Indian Industrial Demand by Fuel Type, 2008

Total Industrial Energy Consumption (2008) = 114.8 Mtoe [Source: IEA]

3. Domestic production of crude oil in India has remained at similar levels during the last two

decades; it was 32.2 Million tonnes (Mt) in 1990-91 and was 33.2 Mt in 2005-067. The combination of

2 http://en.wikipedia.org/wiki/Economy_of_India3 http://www.ibef.org/artdisplay.aspx?tdy=1&cat_id=60&art_id=272534 http://www.iea.org/stats/indicators.asp?COUNTRY_CODE=IN accessed on 25.12.20105 International Energy Agency, http://www.iea.org/stats/balancetable.asp?COUNTRY_CODE=IN accessed on 15.01.20116 International Energy Agency. World Energy Outlook 2007.7 Integrated Energy Policy: Report of the Expert Committee, Government of India, Planning Commission, August 2006.

Coal31%

Oil products20%

Gas3%

Biomass25%

Electricity21%


rising oil consumption and relatively flat production has left India increasingly dependent on imports to meet its petroleum needs. In 2009, India was the sixth largest net importer of crude oil in the world, importing about 70 per cent, of its needs. India is expected to become the fourth largest net importer of oil in the world by 2025, behind the United States, China, and Japan. This raises serious concerns about India’s energy security, in particular its ability to physically source the necessary oil requirements, the impact of any constrained global supply, and the impact of any consequent increase in oil prices on the Indian economy.

4. Increased energy consumption will lead to more greenhouse gas (GHG) emissions; in particular, given the predominant usage of coal in the country’s energy sector. India'sGHG emissions rose by 58 per cent between 1994 and 2007 from 1,252 million tonne CO2e in 1994 to 1,905 million tonne in 2007 at a compounded annual growth rate of 3.3%8. Per capita GHG emissions are still relatively low, at 1.25 tonnes9 of carbon dioxide equivalent (CO2e) per person in 2008.

National Programmes on Renewable Energy and Country Drivenness

5. India has an excellent potential to accelerate the use of its renewable resources to power its growing economy with a more secure and affordable energy supply. The Government of India recognizes that on-going aggressive development of its renewable energy resources is critical to ensure that it is able to meet both its economic and environmental objectives, and it has promoted this renewable energy development through a wide range of policies and actions.

6. The Ministry of New and Renewable Energy (MNRE) is the nodal ministry of the Government of India for all matters related to new and renewable energy, and MNRE has evolved from the Commission of Additional Sources of Energy that was established in 1991. The Ministry works in close collaboration with state level renewable energy development agencies (State Nodal Agencies - SNA’s). The Ministry has been instrumental in setting up and supporting a wide range of institutions to develop and promote renewable energy technologies and applications in India. These include public financial institutions such as the Indian Renewable Energy Development Agency (IREDA) and research institutes such as the Solar Energy Centre (SEC), Center for Wind Energy Technology (C-WET), and Sardar Swaran Singh National Institute of Renewable Energy, amongst others.

7. The MNRE reports that, as of June 2010, India has over 17.5 GW of installed renewable electricity generation capacity, which is approximately 10% of India’s total installed power generation capacity. Wind represents 11.8 GW, small hydro represents 2.8 GW, and the majority of the remainder is from biomass installations. PV installations have reached 15 MW of cumulative capacity installation for both on- and off-grid applications. In the current, Eleventh Five-Year Plan (Eleventh Plan; 2007-2012), the Government of India targets capacity additions of 15 GW of renewable energy, which, if achieved, would bring the cumulative installed capacity to over 25 GW in 2012.

8. The Government of India has enacted several policies10 to support the expansion of renewable energy:

o Electricity Act 2003: Mandates that each State Electricity Regulatory Commission (SERC) must establish minimum renewable power purchases; allows for the Central Electricity Regulatory Commission to set a preferential tariff for electricity generated from renewable energy technologies; and provides open access of the transmission and distribution system to licensed renewable power generators.

o National Electricity Policy 2005: Allows SERCs to establish preferential tariffs for electricity generated from renewable sources.

8 India: Greenhouse Gas Emissions 2007, Ministry of Environment and Forests, May 20109 http://www.iea.org/stats/indicators.asp?COUNTRY_CODE=IN accessed on 25.12.201010 Indian Renewable Energy Status Report. Background paper for DIREC 2010. NREL/TP-6A20-48948 October 2010


o National Tariff Policy 2006: Mandates that each SERC must specify a renewable purchase obligation (RPO) with distribution companies in a time-bound manner with purchases to be made through a competitive bidding process.

o Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) 2005: Supports extension of electricity to all rural and below poverty line households through a 90% subsidy of capital equipment costs for renewable and non-renewable energy systems.

o Eleventh Plan 2007–2012: Establishes a target that 10% of power generating capacity shall be from renewable sources by 2012 (a goal that has already been reached); it also supports the phasing out of investment-related subsidies in favour of performance-oriented incentives.

9. In June 2008, India’s first National Action Plan on Climate Change (NAPCC) was released. It outlined existing and future policies and programs addressing climate mitigation and adaptation. The plan identifies eight core “National Missions” running through to 2017. The Jawaharlal Nehru National Solar Mission (JNNSM) is part of the NAPCC. JNNSM has a target for the deployment of 20,000 MW of solar power, 20 million m2 of solar thermal collector area and 20 million solar lighting systems by 2022.

10. The objective of JNNSM is to create a policy and regulatory environment which provides a predictable and effective incentive structure that enables rapid and large-scale capital investment in solar energy applications and encourages strong technical innovation and the lowering of costs. The Mission will adopt a 3-phase approach, spanning the remaining period of the 11th Five Year Plan (FYP) and first year of the 12th FYP (up to 2012-13) as Phase 1, the remaining 4 years of the 12th Plan (2013-17) as Phase 2 and the 13th FYP (2017-22) as Phase 3. At the end of each FYP, and mid-term during the 12th and 13th Plans, there will be an evaluation of JNNSM progress and a review of capacity and targets for subsequent phases – to be based on emerging cost and technology trends, both domestic and global. MNRE is running a subsidy programme for CSH systems in the context of and to support the goals of the JNNSM.

Table 1: Targets under JNNSM

S. No.Application

SegmentTarget for Phase I

(2010-13)Target for Phase

II (2013-17)Target for Phase

III (2017-22)

1 Solar collectors 7 million m2 15 million m2 20 million m2

2Off grid solar applications

200 MW 1,000 MW 2,000 MW

3Utility grid power, including roof top

1,000-2,000 MW 4,000-10,000 MW 20,000 MW

Note: There are no specific targets for CSH. But the tentative targets are 25,000 m2, 50,000 m2 and 75,000 m2

in each phase respectively. As of 2007, the installed capacity of CSH is about 5,000 m2.

11. The mission will be implemented by an autonomous Solar Energy Authority and (or) an autonomous and enabled Solar Mission, embedded within the existing structure of MNRE. Phase I of the three-phase programme has already been approved by the government and is underway, with a budget of INR.43.37 billion ($950 million) [@ 46.65 INR = 1 USD] approved.

Concentrated Solar Heating (CSH)

12. India is endowed with a vast solar energy potential. About 5,000 trillion kWh per year of solar energy is incident over India’s land area, with nearly all of India receiving an average 5-7 kWh/m2/day11 (figure 2). The abundant solar radiation, clean character of solar energy, high cost of

11 Jawharlal Nehru National Solar Misión, Misión Document, Government of India


fossil fuels and negative emission consequences of fossil fuel consumption along with large requirements for process heat below 250oC are the key drivers of the strong focus on the development of solar thermal applications in India. The solar water heating industry in India is fairly well developed and is already on an accelerated growth path. The use of solar concentrators to meet the process heat requirement of community, industrial and commercial establishments (concentrated solar heat –CSH) is an emerging and exciting market opportunity in India, and is the target of this project.

Figure 2: Global Solar Radiation in kWh/m2- India

13. A range of Indian organizations – from the voluntary sector, academia and from commercially focused entrepreneurs, and all with the support of MNRE - in the last two decades have done a considerable amount of the necessary ground-work in terms of technology development and market promotion for solar concentrators for process heat applications (CSH) in India. This work has led to the commercial emergence of two reasonably mature concentrated solar heat (CSH) technologies in India, viz.,

Fixed focus parabolic dish (e.g. Scheffler dish)

Moving focus parabolic dish (e.g. ARUN dish)

14. The promotion of CSH in India is part of the off-grid programme under JNNSM. MNRE is providing a capital subsidy of INR 5,400/m2 (~ USD 116) and INR 6,000/m2 (~ USD 129) for CSH systems with single-axis and double-axis tracking respectively12. This capital subsidy/unit area of collector is based on the assessment of MNRE’s benchmark cost of collectors. Alongside the capital subsidy, MNRE is also offering a soft loan at a very attractive - interest rate of 5%.

12 Guidelines for off-grid and decentralised solar applications, Ministry of New and Renewable Energy, dated 16.06.2010.


15. India has witnessed a high growth in renewable energy (table 2) in the last decade. However, compared to other MNRE programmes in renewable energy (e.g. wind power), which have been promoted for a much longer time and have achieved large capacity additions, the CSH programme is relatively new and is smaller in size.

Table 2: Growth in Renewable Energy in India13,14

Type of renewable energy technologies

Up to 2002Capacity addition

during 2002-07

Wind Power 1,667 MW 5,415 MWSmall Hydro Power 1,438 MW 520 MWBiomass Power 368 MW 750 MWSolar Water Heaters 0.68 million m2 1.2 million m2

CSH negligible 5,000 m2

India and Climate Change

16. India is undertaking a wide range of initiatives to address the threat of climate change on issues ranging across forestry, glaciology, energy efficiency and climate change mitigation technology. India is an active participant in international negotiations on climate change under the UN Framework Convention on Climate Change (UNFCCC). The Ministry of Environment and Forests (MoEF) is the UNFCCC focal point as well as the operational focal point of the Global Environment Facility (GEF), while the Department of Economic Affairs (DEA) of the Ministry of Finance is the GEF political focal point.

17. The eight missions under India’s NAPCC are, National Solar Mission, National Mission for Enhanced Energy Efficiency, National Mission on Sustainable Habitat, National Water Mission, National Mission for Sustaining Himalayan Ecosystems, National Mission for a Green India, National Mission for Sustainable Agriculture, and National Mission on Strategic Knowledge for Climate Change. The NAPCC’s relevance relating to this project includes:

Achieving national growth objectives through a qualitative change in direction that enhances ecological sustainability, leading to mitigation of greenhouse gas emissions;

Devising efficient and cost-effective strategies for end-use demand-side management. Developing new and innovative forms of market, regulatory and voluntary mechanisms to

promote sustainable development.

Assistance by UNDP in the Area of Environment and Energy

18. The India UN Development Assistance Framework (UNDAF) provides the objectives of the UN system’s assistance to India for the period 2008-2012. The over-arching objective of the current India UNDAF is “promoting social, economic and political inclusion for the most disadvantaged, especially women and girls” and the specific UNDAF goals are in line with the national priorities of the Government of India’s Eleventh FYP. Regarding environmental aspects, Outcome 4 of the UNDAF mentions “By 2012 the most vulnerable people, including women and girls and government at all levels have enhanced abilities to prepare, respond, and adapt/recover from sudden and slow onset disasters and environmental challenges”.

19. UNDP was an active partner in the development of the UNDAF and is also a lead agency for many of the thematic areas of interventions by the UN system in India under UNDAF. UNDP will also continue to support the Indian government’s efforts towards meeting its commitments under relevant multilateral agreements through a two-pronged approach involving the leveraging of

13 XIth Plan Proposals for New and Renewable Energy, Ministry of New and Renewable Energy, December 2006.14 NREL. Indian Renewable Energy Status Report, October 2010.


additional environmental finance and supporting activities on the ground that will safeguard environmental resources. A special focus will be placed on energy efficiency in order to contribute to the reduction of greenhouse gas emissions in energy intensive industries, transport and the commercial sector, where a burgeoning population and on-going strong economic growth have resulted in a growing gap between energy demand and the indigenous and sustainable energy supply capacity of India.

20. The Government of India, through its designated nodal department, the DEA, has exercised the necessary national ownership and direction of UNDP program activities by approving and signing the Country Programme Action Plan (CPAP) 2008-2012 with UNDP. The CPAP aligns with the Indian government’s Eleventh FYP as it stresses the need to ensure that growth is resource efficient and environmentally benign in key sectors such as industry, infrastructure and agriculture. The several multilateral environmental agreements to which India is a signatory – climate change, biodiversity, desertification, chemical management and ozone depleting substances - offer an enormous opportunity to address global environmental concerns through appropriate action at Indian national and local levels. The various policy instruments under these agreements (e.g., the Global Environment Facility, the Multilateral Fund for the implementation of the Montreal Protocol, the Clean Development Mechanism) are being increasingly used to leverage financing and additional support in terms of the deployment of state-of-art technologies and capacity development in India.

21. Under the UNDAF Outcome 4; the Country Program (CP) 2008-2012 has as CP outcome 4.3 “Progress towards meeting national commitment under multilateral environmental agreements” with the related output “strengthened capacity for low carbon development and sustainable management of natural resources”, while the CPAP specifically refers to GEF as source of funding through UNDP for climate-related activities.

2. CONCENTRATED SOLAR HEAT FOR PROCESS APPLICATIONS AND BASELINE ANALYSIS

22. Solar concentrator systems use lenses or mirrors to focus a large area of sunlight onto a small area and thus it is possible to achieve higher temperatures than are possible with non-concentrator technologies (figure 3). The use of solar concentrators for power generation (CSP) and for process heat generation (CSH) is not new, where in 1912 the first parabolic trough collectors were used for steam generation to run a 45 kW steam engine pump in Meadi, Egypt and in the 1960s, the first linear Fresnel collectors were developed in Europe. Since the first oil shocks of the modern era (1973/74 and 1979/80) a range of solar concentrator technologies have been developed and deployed, with a primary focus on power applications (concentrator solar power – CSP). In California (USA) nine parabolic trough power plants were built between 1984 and 1991 to produce electricity with a total capacity of 354 MW, and these plants are still successfully operating today. Subsequently, two further power plants of 50 MW each (using the same basic technology) were built in 2006 in Spain, and many more are planned in a number of countries, including India. CSH applications use the same basic mirrors and technologies as CSP applications but can be much less expensive as fluid temperatures required are in the range of 120-250°C (the focus of this UNDP GEF MNRE CSH project) rather than the much higher temperatures required for viable CSP projects. India accounts for 70 of the 100 CSH applications installed worldwide to date. India is one of the most promising countries for CSH large scale deployment as many of its industries are at a small and medium scale, a scale below where coal fired thermal heat supply systems are best deployed, and where clean burning, controllable and low cost natural gas is not widely reticulated to industrial zones as is the case in many other countries. CSH technologies and applications have experienced growing interest and a large increase in actual working applications from around the year 2000 as global oil prices have rose.


Figure 3: Use of mirrors for concentrating solar energy

23. The current interest in promoting CSH technologies arises from the fact that two third of industrial end energy consumption is thermal energy (process heat). One third of industrial process heat demand is below 200°C which suits the integration of solar concentrator systems in process heat applications. Typical temperature requirements of industrial processes are shown in the table below.

Table 3: Typical temperature requirements of common industrial processes

Industrial Sector Process Temperature range (°C)

Food and Beverages DryingWashingPasteurizing15

BoilingSterilizingHeat Treatment

30 - 9040 - 80

80 - 11095 - 105

140 - 15040 - 60

Metal treatment (galvanizing, anodizing, and painting)

Cleaning 60 - 90

Textile Industry WashingBleaching16

Dyeing

40 - 8060 - 100

100 - 160Chemical Industry Boiling

DistillingVarious chemical processes

95 - 105110 - 300120 - 180

Rubber Industry Vulcanization17 170

All Sectors Pre-heating of boiler feed-water

30 - 100

15 Pasteurization is a process of heating food, usually liquid, to a specific temperature for a definite length of time, and then cooling it immediately. This process slows microbial growth in food.16 Bleaching is one of the processes during textile manufacturing in which fabric is bleached to make it whiter and lighter (remove the gum if it is in yarn stage or remove colours on the fabric). Hot water is required for the bleaching process.17 Vulcanization is a chemical process for converting rubber or related polymers into more durable materials via the addition of sulfur or other equivalent “curatives”.


24. It must be noted that the temperature given in the table above is the process temperature required for a specific operation. In all these processes, heat is provided at the user point through a working fluid which is generally pressurized hot water, steam, hot air or hot oil. For heat transfer to take place, the temperature of the energy carrier must be higher than the required process temperature.

25. There are five main solar concentrator technologies of relevance to this CSH project: -o Vacuum tube collectors with a CPC (Compound Parabolic Concentrator)o Parabolic Trough Concentrator (PTC)o Linear Fresnel Reflector (LFR)o Parabolic dish with fixed focus (e.g. Scheffler)o Parabolic dish with moving focus (e.g. Arun)

26. A detailed description of the five solar concentrator collector technologies used in CSH applications is provided in Annex E. The five technologies differ considerably in their output (temperature, specific thermal power), cost, module size, area required and weight. Each of these parameters has a bearing on the selection of the CSH technology used for a particular application. While CPC collectors and Scheffler (a type of parabolic dish with fixed focus) are better suited for temperatures lower than 130°C and 150°C respectively, the other three technologies can deliver higher temperatures of up to 250°C. CPC collectors have the additional advantage that they also utilise diffuse solar radiation18. Some of the salient features of these technologies are given in Table 4.

Table 4: Comparison of the five CSH technologies19

Collector typeCollector temp (oC)

Specific thermal power 20(kW/m2)

Cost (US $/ m2)

CPC vacuum tube 90-130 0.60-0.65 130 (China);450-900 (Europe)

Parabolic dish with fixed focus (e.g. Scheffler)

100-150 0.21-0.31 250-300 (India)

Parabolic dish with moving focus (e.g. ARUN)

150-250 0.34-0.50 500-600 (India)

Parabolic trough 120-250 0.50-0.56 650 (Europe)Linear Fresnel 100-200 0.50-0.56 650-900 (Europe)

27. In practice, the world-wide experience to date in actual working CSH applications is rather limited. A survey conducted under the IEA Task 33 “Solar Heat for Industrial Processes” in 2007, showed that there were then about 10 CSH installations world-wide (the survey excluded India). As per the most updated information from MNRE, there are around 70 CSH installations in India (refer Annex G for the list of the installations). It is estimated that there are around 100 working CSH installations worldwide. This places India as one of the leading countries in the practical CSH market deployment domain. The current experience in CSH applications, sector wise is summarized below in Table 5.

18 As sunlight passes through the atmosphere, some of it is absorbed, scattered, and reflected by air molecules, water vapor, clouds, dust from human activities and environmental changes, pollutants, smoke from forest fires, and dust from natural sources and volcanoes. This is called diffuse solar radiation. The solar radiation that reaches the Earth's surface without being diffused is called direct beam solar radiation. Most solar concentrators are only able to utilize the direct beam radiation component of sunlight. CPC - which is an evacuated tube collector backed by a concentrator - is able to utilize both diffuse as well as direct beam radiation.19 Dr Uli Jakob. International experience and status on solar thermal concentrator technology for process heat applications. December 201020 Specific thermal power output (kW/m2): It is defined as the thermal energy output rate per unit collector area over its operating time.


Table 5: International experience base of CSH applications

End-use Sector Country

Cooling Hospital Ipswich, AustraliaThane, MaharashtraHarnosand, SwedenMorocco

Industry Gurgaon, IndiaChennai, IndiaBergamo, ItalyLong Island, USAGermany

Stadium Doha, QatarHotel Dalaman, Turkey

JordanShopping Mall Newcastle, AustraliaSupermarket Antalya, TurkeyOffice Building Abu Dhabi (Masdar), UAE

Abu Dhabi, UAERosenfeld, Germany

University/Technology Institute Seville, SpainNewcastle, AustraliaGebze, Turkey

Food production Winery Grombalia, TunisiaSteam Cooking Institutions: hostels, religious,

hotels, etc.More than 50 installations in India

Baking of bread Bakery IndiaBurkina FasoArgentinean Altiplano, Argentina

Hot water/ steam Dairy (pasteurization) Latur and Sangli, IndiaMarrakech, Morocco

Auto industry (7-tank process) Chakan, IndiaBall-Bearing Factory Ankara, TurkeyMetal Factory GermanyPiano Factory Long Island, USABeverage Factory Fritolay, TurkeyLaundry India

Dalaman, TurkeyEvaporation Nuclear Facility Kota, India

28. A detailed report was prepared during project preparation phase; however an executive summary of CSH systems is presented in Annex E. A summary of one of the case studies is presented in Box 1 for reference. Table 6 provides a summary of the four case-studies main features.

Table 6: Summary of International CSH Case Studies

Case Study 1 Case Study 2 Case Study 3 Case Study 4

Industry/ Institution

Piano Factory Winery Hotel Ipswich Hospital

Location New York, USA Grombalia, Tunisia

Dalaman, Turkey Queensland, Australia


Case Study 1 Case Study 2 Case Study 3 Case Study 4

End-use application

Process heating and cooling

Process cooling Laundry and space cooling

Space cooling

Year of installation

2010 2008 2003 2008

Working Fluid Pressurized hot water @ 200oC

Pressurized hot water @ 200oC and 16 bar pressure

Pressurized hot water @ 180oC

Hot oil @ 175oC

Type of Collector

Parabolic Trough Linear Fresnel Parabolic Trough Parabolic Trough

Aperture Area 532 m2 88 m2 360 m2 574 m2

Collector mounting

Roof Ground Ground Roof

Thermal Energy output

430 MWh/annum (predicted)

No data available On 24th May 2007 the energy from parabolic trough collectors was approximately 590 kWh/day and met 46% of that day’s cooling demand

Designed to produce 30% of the hospital’s peak energy requirement for cooling.360 MWh/annum (predicted)

Box 1. Solar Cooling in a Hospital, Australia

Ipswich Hospital in Queensland, Australia has installed 43 parabolic trough collectors to provide thermal energy to a double effect VAM (Vapour Absorption Machine) for providing cooling in the Hospital in 2008. The total aperture area of the collectors is around 574 m2. The installation was done in collaboration between Queensland Health, Energy Impact, Energy Conservation Solutions and ENERGEX Ltd. The collectors are installed at the roof space of the hospital’s multi storey car park. Auxiliary heating is provided through gas fired steam boiler. The solar collector field has a 255 kW capacity and is expected to produce around 360 MWh/annum. The total cost of the solar cooling system was 692,000 EUR and specific cost of 1,206 EUR/m2 of collector aperture area. Ipswich is located on the urban outskirts of Brisbane, the capital of Queensland. Cooling is a major energy load in Australia, and there is great interest in solar cooling, including as there are many remote aboriginal and mining communities that are not (and never will be) connected to the main electricity grids.

Figure 4. Ipswich hospital solar collector field (Source: ENERGEX Ltd)


Baseline

29. The main industries/sectors requiring process heat which have an appreciable potential for CSH applications in India are listed in Table 7. Steam is the most widely used working fluid21 for providing industrial heat at up to 250oC. Apart from steam, the other working fluids employed are pressurized hot water, hot oil and hot air. The process heat using sectors are divided into two broad categories (a) those having medium to large steam requirements (steam requirement of > 5 tons/hour) (b) those having small steam requirements (steam requirement of < 5 tons/hour). The industries having medium to large steam requirements are characterized by the use of less expensive solid fuels (in particular coal) which results in a longer pay-back period for CSH systems; also the size and investment in a typical CSH installation would be large to meet such a substantial steam demand. Most of the existing CSH installations in India are in industries and for applications having small steam requirements and using higher cost fuels (in particular furnace oil). Discussions with the CSH industry during the CSH project’s design phase have strongly suggested that in the foreseeable future the most promising applications for CSH will also be in sectors with small steam needs and using higher cost fossil fuels, in particular furnace oil. For these reasons, such industries and applications were studied during the energy audits undertaken during this CSH project’s preparation phase.

Table 7: Classification of thermal energy using industries

Industry/ Application Fuel usedRemarks for solar concentration applications

Medium and large steam users ( > 5 tons/h steam requirement)1. Textile (composite mills, grey

cloth mills, mills engaged in finishing operations)

2. Pulp and paper (composite paper mills)

3. Fertilizer and petro-chemical4. Chemical (dye and

pigments; organic chemicals; rubber processing )

5. Pharmaceutical (bulk drugs)

CoalLigniteFurnace oilNatural gasBiomass

- Longer pay-back periods as in most cases cheaper solid fuels (coal, lignite, biomass) are used.

- Large steam requirements and in several cases e.g. pulp and paper, fertilizer and petro-chemical, high pressure (> 40 bar; 250oC) steam is required.

- High initial investment and large area required for CSH collector field to supply a significant part of the steam demand.

- No existing CSH demonstration applications to date

Small steam users ( < 5 tons/h steam requirement)6. Textile (garments, yarn)7. Paper (recycled paper mills)8. Chemical (paints and resins)9. Pharmaceuticals (active

pharmaceutical ingredients and formulations)

10. Food processing (fruit preservation, bread making, drying of plantation products)

11. Hotels 12. Hospitals 13. Institutional cooking (hostels,

armed forces, religious institutions, catering, etc.)

14. Dairy processing 15. Laundry16. Metal treatment (galvanizing,

anodizing, and painting)17. Space cooling using vapour

Predominantly Petroleum fuels

- Pay-back periods are shorter as costlier petroleum fuels generally used.

- The steam requirement is generally small and at low pressures (< 10 bar)

- Smaller initial investment and area of the CSH collector field for supplying a significant part of the steam demand.

- CSH systems already demonstrated in India for food processing, hotels, institutional cooking, dairy, metal treatment, evaporation and space cooling applications.

21 Steam, hot water, hot air, and hot mineral oil are examples of working fluids. A working fluid is commonly generated centrally and then distributed to various points of use in an industrial or commercial site.


absorption cycle

30. The energy audits conducted during the course of the CSH project preparatory phase covered several potential CSH application target markets. Detailed information of the results of these energy audits is attached as Annex F. A summary of the energy audit results is shown in Table 8. Analysis of the energy audit results shows that availability of adequate space for the CSH collectors can be a major limiting factor while planning a CSH system. In several cases, the free area available in the applicable industries is small and hence only a fraction of the thermal energy demand can be met through CSH technologies. In only 3 out of the 11 industries/facilities surveyed would it be possible to meet a high fraction (45-100%) of the annual thermal energy demand. In twoindustries/facilities a medium fraction (15 - 45%) of the demand could be met by CSH systems. In the remaining six industries/facilities only a small fraction (


list of the installations provided). The case studies of four installations are provided in Annex F. The distribution of these systems in terms of applications, technology and size is given in Table 9 below. To date, the predominant application of CSH in India has been for steam cooking and the predominant CSH technology in India is Scheffler.

Table 9: Distribution of CSH systems in India (technology, system size and applications)

Total number of systems 71

Applications

Cooking systems 52

Solar cooling 5

Other applications (food processing, evaporation, hotel, hospital, institutional cooking, dairy, metal treatment )

13

CSH collector size distribution

Maximum size of the system 2,502 m2

Minimum size of the system 54 m2

Number of systems having size > 1000 m2 7

Number of systems having size < 200 m2 41

Number of systems having size 200 to 1000 m2 22

Average size of the system 298 m2

Type of CSH collectors

Parabolic dish with fixed focus (Scheffler) 18,500 m2

Parabolic dish with moving focus (ARUN) 1,500 m2

32. A recent technical paper22 has estimated 2-5 years simple payback for Scheffler and 4-8 years payback period for ARUN CSH systems at furnace oil prices of INR 36/litre23 – this is after including the relevant government subsidies and accelerated depreciation benefits. Annual fuel savings are a function of CSH system characteristics, solar energy availability and the cost of the fuel saved. The calculations have been done for specific system characteristics based on performance claims of the manufacturers, a range of furnace oil prices and considering different values of annual sunshine hours. In the absence of the necessary measured performance data of existing CSH installations, unfortunately a full financial analysis of the existing CSH systems in India is not yet possible.

33. Figure 5 shows the direct normal solar resource on the map of India. Except for CPC, all the other CSH technologies can only utilise the direct normal solar radiation component. The map shows that western, southern and central India have a higher direct normal radiation compared to north, east and north-eastern states. The map also shows that the 5 states having the most CSH systems in India are Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu and Karnataka - all of them belonging to the higher Direct Normal solar resource regions of India.

22 V R Sardeshpande and I R Pillai . Solar concentrador for Industrial Thermal Applications –Indian Scenario, Proceedings of the Second IASTED International Conference Solar Energy (SOE 2010), July 15-17, 2010, Banff, Alberta, CANADA23 Furnace oil prices corresponding to a crude price of around US$ 100-120/ barrel


Figure 5: Five leading states in CSH Installations (m2 of collector area)

[Map source: NREL. Indian Renewable Energy Status Report, October 2010]

Tamil Nadu (2,344)

Maharashtra (6,961)

Karnataka (3,666)

Gujarat (3,598)

Andhra Pradesh (1,592)


34. The MNRE subsidy scheme24 appears to be generally accessible, simple enough to understand, and sustainable into the foreseeable future. It has been a very useful support mechanism in most of the 71 installations to date in India. However, in its present form the MNRE subsidy scheme does not sufficiently differentiate between the different available CSH technologies on the basis of their performance, and hence the MNRE subsidy scheme in practice serves to promote the extension of the simplest and lowest cost existing CSH technologies currently available in India (in particular Scheffler) even in applications where other technologies (e.g. Arun or international CSH technologies not yet deployed in India) may be more appropriate.

35. The current MNRE CSH support programme is also not focused on providing support for the development of standard CSH technology application information packages, testing and standardisation, capacity building and focused CSH market creation. The absence of any systematic monitoring of in-use process oriented CSH applications means that the performance of existing CSH applications is not quantified and hence the necessary technical learning from the operation of the existing CSH applications in India is limited to date. In the absence of such properly monitored real field CSH performance data, the credibility of the actual performance of the existing CSH technologies in real applications in India is low, and this is a key barrier to the increased uptake of CSH in India. There is also a shortage of site-specific applicable direct beam solar radiation data. As the performance of the solar concentrator systems under consideration (except for CPC which also works under diffuse radiation) depends on the available direct solar radiation, the absence of direct beam solar radiation data hinders the realistic estimation of CSH applications’ performance in India.

36. The potential end users of the CSH industry in India are not exposed to the latest international CSH technology developments, which are primarily occurring in IEA/OECD countries. Equally, the existence and scale of existing and future Indian commercial CSH applications remains essentially unknown to global CSH technology developers in Europe and other IEA/OECD countries, thereby limiting the growth of CSH markets outside India.

37. There are 10 existing CSH manufacturers in India that are known to MNRE (Annex I, Table I-1). One manufacturer is involved in the making of ARUN parabolic dish with moving focus and 2- axis tracking, the rest are manufacturers of the simpler Scheffler CSH systems. A further eightprospective potential CSH suppliers were identified during the CSH project’s design stage (Annex I, Table I-2). The prospective CSH suppliers’ products were either indigenous CSH technologies that are still under development or internationally sourced CSH technologies. However, most of the existing and new CSH suppliers are small or medium sized companies and therefore they have only limited financial and technical capacity to develop their indigenous technologies or to access new technologies available internationally.

38. In India, out of the five solar concentrator technologies, only two i.e. parabolic dish with fixed focus (Scheffler) and parabolic dish with moving focus (ARUN) have been used for thermal applications to date. Parabolic trough, linear Fresnel and CPC technologies have not yet been used for commercial CSH applications in India. No specific work is yet underway to support the introduction of CPC evacuated tube technologies for lower temperature process heat applications in India, where it is a particularly promising low cost mass-market technology option. The lack of a full suite of applicable CSH technologies in India means that there is often a mismatch between the technology deployed and the real process application temperature requirements.

39. A handful of Indian academic institutions (e.g. the Indian Institute of Technology - Bombay and Indian Institute of Technology - Madras) have faculty members actively working on CSH technologies and applications. The number of Masters and PhD level students working on CSH technologies and applications is still limited. It is widely agreed that the existing CSH skill resource base is inadequate to support the envisaged CSH market growth. A clearly and widely acknowledged risk is that the high profile and official GOI supported CSP deployment plans may siphon off the limited CSH expertise, and thus severely limit CSH market growth in India.

40. Annual data on CSH installations, let alone their performance, has not been recorded on a suitable sector wise basis. CSH projects approved by MNRE for financial subsidy in the year 2006-07

24 MNRE is providing a capital subsidy of INR 5,400/ m2 and INR 6,000/m2 for CSH systems with single-axis and double-axis tracking respectively24. The capital subsidy/unit area of collector is based on the MNRE’s assessment of the benchmark cost of collectors. Besides the capital subsidy, MNRE is also offering a soft loan at an attractive 5% interest rate.


only total 1,400 m2, with a marginal increase to 1,732 m2 in 2009-1025. In the absence of specific, integrated and multiple barrier removal actions (one of the prime objectives of this UNDP GEF MNRE CSH project), installed capacity figures from new CSH applications are not expected to appreciably increase in the next five years from the baseline situation. The necessary technology development and the economies of scale required to increase awareness, underpin credibility, and reduce CSH prices to drive Indian CSH market growth by a factor of 6-8 in the next 5 years, will only occur with the implementation of the initiatives under this UNDP GEF MNRE CSH project.

Alternative Scenario

41. Under the baseline scenario, the annual rate of installation is currently around 2,000 m2

with a projected marginal increase of 3,000 m2 per year over the next five years. The cumulative area of CSH installations would thus reach 35,000 m2 by the year 2015-16. In the alternate scenario, a targeted CSH market development approach with specific integrated and multiple barrier removal actions would be undertaken with GEF funded interventions – and total Indian CSH installations would go up by an additional 45,000 m2 - resulting in a total Indian CSH installed working area of 80,000 m2

at project end. The additional CSH installed collector area gain would be from 30 demonstration projects totalling 15,000 m2 with the remaining 30,000 m2 coming from 60 replication projects. The annual rate of CSH installations in India would reach 15,000 m2 annually as the project nears its end -which is an increase by 6 to 8 times of the current annual rate of Indian CSH new installations.

Figure 6: Forecasted cumulative installation of CSH collector areas in business-as-usual (BAU) scenario and project scenario (in m2 of collector area)

Table 10: Year-wise projected CSH installations in m2 of collector area (2011-12 to 2015-16)

Year BAU (m2)Demonstration projects (m2)

Replication projects (m2)

Total (m2)

Annual emission

reductions (tCO2/year)

*

2011-12 3,000 3,000 0 6,000 1,050

25 MNRE Annual Report 2006-07 and 2009-10

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Cu

mu

lati

ve C

SH

in

stal

lati

on

s (m

2)

Year

Baseline scenario

Project scenario


Year BAU (m2)Demonstration projects (m2)

Replication projects (m2)

Total (m2)

Annual emission

reductions (tCO2/year)

*

2012-13 3,000 3,000 4,000 10,000 2,450

2013-14 3,000 6,000 5,000 14,000 5,2502014-15 3,000 6,000 6,000 15,000 8,4002015-16 3,000 0 12,000 15,000 15,750

Total 15,000 18,000 27,000 60,000 32,900* Annual emission reductions = year wise installations * 0.35 tCO2/m

2/year

3. BARRIER ANALYSIS

42. The Eleventh FYP proposed an aspirational target for the installation of 250,000 m2 of CSH systems to occur during the 2007-12 period. However, the actual achievement of CSH installation was only 15,000 m2 during first the 3.5 years of the 11th five year plan. This clearly shows that there are a number of major additional barriers to the dissemination of the CSH technology in India that are not being fully addressed by existing MNRE baseline CSH support activities. The key additional CSH barriers that this UNDP GEF MNRE CSH project will address are presented in Table 11.

Table 11: Barrier Analysis

Barrier Description(1) Technology package barriers- The full set of concentrated

solar technologies developed and available worldwide for process heat (CSH) applications are yet to be demonstrated in India

Only two examples of CSH technologies (ARUN and Scheffler) - out of the five applicable broad CSH technology types developed worldwide to date - are currently deployed in India under real field conditions. In particular, Linear Fresnel Reflector (LFR), Parabolic Trough Concentrator (PTC) and Compound Parabolic Concentrator (CPC) technologies are yet to be deployed and operated in the commercial and industrial sector in India. The different CSH technologies offer a mix of specific features in terms of thermal output and hours of heat production, collector area required, weight of the system, heating fluid temperature range produced, etc. It is imperative that the entire set of CSH technologies are made available and deployed in India as a pre-requisite for developing the necessary full wide-range of CSH technology application packages.

- Non-availability of a full range of CSH technology application packages in India

To date, CSH applications in India have been primarily focused on the use of the Scheffler CSH technology for institutional cooking. There are more than 50 such installations from several CSH suppliers, successfully establishing the applicability of Scheffler based CSH technology for this sector in India. Some further Indian CSH applications have already been demonstrated in the cooling, dairy pasteurisation, laundry, automotive, and heavy water production sectors. Standard technology application packages covering an integrated combination of process integration, CSH technology, heat storage and other key success factors are lacking for these and other promising applications to systematically capture the results and lessons learned from these early demonstration projects and extend this to additional promising CSH application sectors in India.

- Non-availability of performance measurement standards and

In the absence of standardised performance measurement standards and protocols, it is very difficult to measure the


26 The certification is given by BEE, by conducting a process of examinations.

protocols for measuring CSH systems’ performance

performance of existing CSH systems or to compare CSH performance across different technologies and applications.

- Non-availability of testing facilities for CSH technologies

India does not have specialized testing centres, at the national and regional level, for the testing of CSH technologies. Independently verified performance characteristics of CSH technologies are not available.

(2) Awareness and capacity barriers- Lack of awareness amongst

industry (including top level management levels) and policy makers on the potential of CSH applications to reduce process heat supply costs

A large number of industries in India currently use expensive petroleum fuels or electricity for low and medium temperature heating needs. There is a lack of awareness amongst industry and policy makers of the strategic opportunity that CSH offers in reducing their energy costs and in supplementing petroleum fuels to reduce India’s growing dependence on imported fuels.

- Limited capacity of the CSH technology supply chain

There are only a limited number of CSH installers - with generally limited capacity - in India. This lack of capacity leads to frequent delays in the installation and commissioning of projects on-time, and often long commissioning and CSH project hand-over phases.

- Lack of knowledge of CSH technologies and system factors amongst technical consultants to applicable industries and sectors

India has a large number of certified energy auditors26 who act as technical advisors to industry on energy efficiency and energy conservation issues and options. Each industry has its own set of process issues and its own sector-specific technical experts. There are huge knowledge gaps amongst these technical experts and advisors regarding the applicability and sector specific issues regarding CSH technologies and applications and the potential of CSH to meet process heat requirements. Strengthening the capacities of these technical experts and advisors in CSH technologies will assist the wider penetration of CSH in the applicable industrial and other sectors.

- Limited availability of skilled and semi-skilled technical manpower in the CSH industry

Companies offering CSH systems are generally small in size and currently have only limited annual CSH sales. Such companies are simultaneously engaged in R&D, demonstration, manufacturing, marketing, installation and commissioning tasks. All functions calls for highly skilled technical manpower (generally at a technical master’s degree level). The CSH companies are limited by their financial and technical resources to train such skill sets in large numbers of new skilled semi-skilled staff required. Academic institutions offer only a limited number of post-graduate energy engineering courses on CSH and have only limited funding and capacity to offer sufficient relevant research projects, thus limiting the enhanced supply of high-end trained CSH manpower.

- Limited interface between the CSH industry and applicable academic institutes

With the exception of the very productive association between IIT-Bombay and the manufacturers of ARUN Solar in which IIT-Bombay developed the testing procedure, the interface between the CSH industry and applicable academic institutions is currently limited in India. Encouraging and facilitating such industry-academic interactions will benefit both the CSH industry in undertaking its R&D and in training the necessary high-levelmanpower with suitable skills in the niche CSH technology and its applications.

- Limited interface/interaction between international CSH industry/experts and Indian

India currently has the largest number of CSH installations world-wide, and has a huge market potential to expand this further and continue to lead the world with actual working


27 Furnace oil price corresponding to the crude price of around US$ 100-120/ barrel28 V R Sardeshpande and I R Pillai. Solar concentrators for Industrial Thermal Application –Indian Scenario, Proceedings of the Second IASTED International Conference Solar Energy (SOE 2010), July 15-17, 2010, Banff, Alberta, CANADA

CSH industry/experts CSH installations. Indian industry now has world-leading experience in the use of some CSH technologies and applications, in particular for institutional cooking. Global technology developers have products and expertise in other CSH technologies of interest such as LFR, PTC and CPC that have not yet been used in India, as well as in new CSH applications, in particular solar cooling. Increasing the interface/interaction between the Indian and international CSH industries and experts would greatly accelerate the overall development – both Indian and global - of the CSH industry.

(3) Demonstration and replication barriers- A wide range of CSH

technology application packages are yet to be demonstrated in India

Every CSH industry/ application has a unique set of process requirements, process integration, heat storage and balance of systems equipment, and other practical issues. In India, CSH systems have already been successfully demonstrated for institutional cooking, dairy pasteurisation, food processing, evaporation, laundry, institutional cooking, metal treatment and space cooling applications. However, there are still a large number of other sectors such as textiles, chemicals, pharmaceutical, recycled paper, and so forth where CSH systems can be integrated in industrial process heat applications – but where CSH systems are yet to be demonstrated. Existing applications where CSH has been demonstrated also have significant potential for further improvements. Finally, a number of key globally proven CSH technologies have not yet been tested for commercial/industrial process heat applications in India

- No public domain documentation available for existing CSH applications

There are around 71 existing CSH projects in India. There is not yet any comprehensive assessment of these CSH projects’ performance, problems encountered, lessons learned, and the factors that led to their success or otherwise. Documentation of the current CSH systems’ performance, issues, and lessons learnt would be of great value in efforts to sustain and widely replicate such systems.

(4) Financial barriers- Low payback on CSH

investments CSH stakeholder consultations revealed that users want simple paybacks of 2 to 4 years. A recent technical paper has estimated 2-5 years simple payback is possible for Scheffler and 4-8 years payback period for ARUN CSH systems at furnace oil prices of INR 36/litre27 after considering current government subsidies and accelerated depreciation benefits in India28. Low payback on investments is a key barrier in CSH technology deployment.

- Lack of incentives based on CSH performance

MNRE’s subsidies for CSH are based on the area of installed CSH collectors and not on the actual quantity of process heat produced. The actual process temperature requirements, and any need for heat storage are also not taken into consideration in the current MNRE subsidies provided. As the current MNRE subsidy is based on CSH collector area, it favours low-cost and low-efficiency CSH technologies which require large collector areas. The existing MNRE subsidy does not take into consideration of key real-world CSH application aspects such as the CSH


4. KEY STAKEHOLDERS

43. A large number of stakeholders from Government, industry, national and international research and academic institutions, international organizations and financial institutions need to work closely and seamlessly together for the successful development of the CSH market in India. A brief description and proposed role of key stakeholders is presented in Table 12.

Table 12: Key stakeholders involved in CSH

Stakeholder Role29

GovernmentMinistry of New and Renewable Energy (MNRE)

MNRE is responsible for framing policy and implementing programmes for development and promotion of new and renewable energy sources in India. MNRE serves as the main client (Implementing Partner/Executing Partner) in this project. MNRE will provide the strategic steering for the project, oversee the accomplishment of project objectives and tasks, lead co-funding requirements, initiate policy action on its own and through other departments, and facilitate the process of bringing other stakeholders on board.

Solar Energy Centre (SEC) SEC, established in 1982, is a dedicated unit of MNRE with a focus on the development of solar energy technologies and to promote solar applications through product development. SEC is also already involved in testing of solar PV and solar thermal products. In the project it is proposed that SEC will coordinate the output 1.3.1 (Development of CSH system components and equipment testing facilities)

Bureau of Indian Standards (BIS) BIS, the National Standards Body of India is the lead Indian agency concerning standardization, certification and quality. The project will initiate/provide inputs in the process of formulation of appropriate BIS standards concerning solar concentrator technologies (Activity 1.2.1.4).

Central Boilers Board (CBB), Department of Industrial Policy and Promotion

CBB, constituted under Section 27A of the Indian Boilers Act 1923, is responsible for establishing regulations for boiler materials, design, construction, as well as for registration and inspection. As steam generating CSH falls under the purview of the Indian Boilers Regulation, the project will liaise with CBB to expedite approvals for new solar concentrator applications and technologies used for steam generation.

Bureau of Energy Efficiency (BEE)

BEE is the statutory government body (under the Ministry of Power) for the implementation of the Energy Conservation Act. BEE also has the mandate to implement national programmes on energy efficiency and conservation in industries and buildings -- the two sectors of application of CSH technologies. BEE will be invited to join the CSH project advisory committee.

Department of Science and Technology (DST)

DST is supporting the Solar Energy Research Initiative (SERI) in India. SERI supports research, development and demonstration of solar technologies. CSH technologies and applications are one of

29 This column describes the role of the stakeholder in the implementation of the CSH, or the role of the stakeholder in the implementation of the proposed project.

system’s integration with actual process requirements, the adoption of allied highly cost effective energy efficiency opportunities, or the need for short, medium or longer term heat storage.


Stakeholder Role29

the identified areas of SERI work. DST will be invited to join the CSH Project Advisory Committee.

Ministry of Environment and Forests (MoEF)

MoEF is the GEF focal point for GEF projects in India and thus will liaise with GEF and provide overall coordination of the project.

State Nodal Agencies (SNAs) The SNA’s are the state level agencies for promotion of renewable energy and will have a role in the MNRE subsidy disbursement component for the CSH project’s 30 demonstration and 60 replication projects.

Petroleum Conservation Research Association (PCRA)

PCRA works on behalf of the Ministry of Petroleum and Natural Gas on the conservation of petroleum products leading to environment protection, energy security and sustainable development. As most of the CSH applications would be to substitute for existing petroleum products’ use, PCRA will be invited to join the CSH Project Advisory Committee.

National Productivity Council It is an autonomous, non-profit, national level organization to promote an enhanced productivity culture in India. National Productivity Council was established as a registered society in 1958 by the Government of India. It provides training, consultancy and undertakes research in the area of productivity. National Productivity Council would be a potential candidate for being one of the component managers for the CSH project’s component 3 (Planning and operationalising demonstration projects).

Industry / AssociationsConfederation of Indian Industries – Sohrabji Godrej Green Business Centre (CII-Godrej GBC)

The Confederation of Indian Industry (CII) is a non-government, not-for-profit, industry led and industry managed premier business association, with a direct membership of over 7,800 organisations from the private as well as public sectors. CII - Sohrabji Godrej Green Business Centre (CII - Godrej GBC), is a division of CII and is India's premier developmental institution, offering advisory services to industry on environmental aspects. CII - Godrej GBC works in the areas of Green Buildings, Energy Efficiency, Water Management, Environment Management, Renewable Energy, Green Business Incubation and Climate Change activities. CII -Godrej GBC would be a potential candidate for being one of the component managers for the component 3 (Planning and operationalising demonstration projects).

Solar concentrator manufacturers As per MNRE, currently there are 10 solar concentrator manufacturers involved in producing CSH systems in India. Several others are planning to enter the CSH market. Solar concentrator manufacturers responsible for the supply of CSH systems would be important stakeholders in the entire CSH project.

Research and Educational InstitutesIndian Institute of Technology (IIT), Bombay, Madras and Delhi

IIT Bombay and IIT Madras are already involved in research, training and technology development work related with solar concentrator technologies and CSH applications. The Center for Energy Studies, IIT Delhi is involved in research and training on solar concentrators. The Department of Energy Science and Engineering at IIT Bombay has contributed in the development of the ARUN CSH technology and is also undertaking projects funded by MNRE to develop performance standards for solar concentrators and in setting up a 1 MW CSP plant and testing facility.

Non Ferrous Technology Development Centre (NFTDC)

NFTDC is the only R &D institute of its kind in the country that undertakes sponsored R & D projects involving both the scientific know-why as well as technical know-how, thus forming the continuous Research and Development linkage from concept to eventual transfer for commercial production. NFTDC has the capabilities to develop specialty alloys and materials, components, process know-how and optimization, material testing and


Stakeholder Role29

characterization, technical consultancy services and complete technology development packages on a turnkey basis. NFTDC could play the main role and/or coordinate the development of the 10 technology application information packages (Activity 1.1.1.4)

Central Power Research Institute (CPRI)

CPRI is an autonomous organisation under the Ministry of Power, Government of India that was established in 1960. CPRI functions as a centre for applied research in electrical power engineering assisting the electrical industry in product development, consultancy and quality assurance. CPRI in the past has been involved in the testing of renewable energy products e.g. biomass cook stoves and would be a potential candidate for taking up the role of the regional testing facility (Activity 1.3.1.3)

The Energy and Resources Institute (TERI)

TERI is a non-profit research organisation based in New Delhi. TERI’s activities in renewable energy and energy efficiency in industry and buildings could be of relevance for the project. TERI could be a potential candidate for being one of the component managers for the CSH project’s component 3 (Planning and operationalising demonstration projects).

TERI University TERI University is based in New Delhi. The Centre for Energy and Environment of the University focus is to produce specially trained manpower for the highly multidisciplinary area of renewable energy utilization, including solar thermal systems TERI University could be a potential institution for taking up the components relating to capacity building – especially to create skilled human resources in the subject of CSH and its integration.

International OrganizationsUS Agency for International Development (USAID)

In the area of clean energy, USAID is working in India to increase the viability and efficiency in the power sector, conserve resources, and promote clean coal technologies and renewable energy. USAID could potentially be a member of the Project Advisory Committee.

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ, formerly GTZ)

GIZ is in the process of initiating a project entitled “Commercialisation of Solar Energy in Urban and Industrial Areas” (ComSolar) in India with the financial support from the German Federal Ministry for Environment, Nature Conservation and Nuclear Safety (BMU). This ComSolar project is under the bilateral international cooperation between BMU and the MNRE, India, to focus on solar energy applications in various urban and industrial areas of the country. GIZ could potentially be a member of the Project Advisory Committee.

Financial InstitutionsIndian Renewable Energy Development Agency (IREDA)

IREDA is a Public Limited Government Company established in 1987, under the administrative control of the MNRE. IREDA’s role is to promote, develop and extend financial assistance for renewable energy and energy efficiency/conservation projects in India. IREDA is currently operating the solar off-grid programme under the JNNSM. IREDA will be a member of the Project Advisory Committee.

National Bank for Agriculture and Development (NABARD)

NABARD is run by the central government of India, and has launched a capital subsidy-cum-refinance scheme for installation of solar off-grid (photovoltaic and thermal) applications under the JNNSM programme. NABARD could have a role in the disbursement of subsidies and the provision of credit to demonstration and replication units under the CSH project’s component 3.

International Research Institutes involved in research and testing of solar concentratorsThe Fraunhofer Institute for Solar Energy Systems (FraunhoferISE), Freiburg, Germany

Fraunhofer ISE is involved in research and testing of solar concentrators. The Institute could be a potential international technical resource for technical training and providing technical


Stakeholder Role29

assistance in the establishment of CSH testing facilities in India.Institut für Thermodynamik und Wärmetechnik (ITW), University of Stuttgart, Germany

ITW is involved in research and testing of solar concentrators, and could be an international technical resource for technical training and providing technical assistance in the establishment of CSH testing facilities in India.

German Aerospace Centre (DLR), Cologne, Germany

DLR is involved in research and testing of solar concentrators and could be a potential international technical resource for technical training and providing technical assistance in the establishment of CSH testing facilities in India.

Le Centre Scientifique et Technique du Bâtiment (CSTB), France

CSTB is involved in research and testing of solar concentrators and could be a potential international technical resource for technical training and providing technical assistance in establishment of CSH testing facilities in India.

Solar Institute Julich, Germany One of the focus areas of this institute are development of low and high temperature solar thermal collectors and absorbers for solar thermal power plants. In relation to these, the institute also developed components for sea water desalination, designed thermal storage and various other solutions to the modern solar architecture. This institute develops simulation programs for energy systems and thermodynamic evaluation of system components.Solar Institute Julich may be a potential partner to devise curriculum for training programmes and capacity building on testing, performance monitoring, etc. under the UNDP GEF MNRE CSH project.


PART B. PROJECT STRATEGY

5. PROJECT RATIONALE, DESIGN PRINCIPLES AND STRATEGIC CONSIDERATIONS

Project Rationale and Design Principles

44. This UNDP GEF MNRE CSH project has been designed as a fully integrated and suitably funded and co-funded series of components and activities to remove the multiple barriers facing the widespread adoption of CSH technologies and applications in India. The project has been designed to fully support and compatible with the on-going MNRE CSH support programme.

45. This proposed CSH project will remove the key barriers (identified as above in section 3) to enable the annual collector area of new CSH applications in India to be increased 6-8 times in the five-year project duration. The overarching rationale for the project is to position the Indian CSH industry for further on-going sustained growth after the formal end of this UNDP GEF MNRE CSH project. More specifically, the proposed project will:

(1) Address technology package barriers by supporting the development of 10 technology information packages for commercial CSH deployment in selected specific sectors. The technology information packages will each refer to one or more of the five applicable CSH technologies that matches the required process temperature, available CSH area for deployment, and other specific CSH and process attributes. These technology information packages will include: descriptions of the applicable process heat requirements in the relevant sector; related process integration and energy efficiency considerations that should be considered alongside the CSH technologies; any heat storage requirements and applicable heat storage technologies; estimated CSH costs and performance; the results of previous CSH applications in the applicable sector (if any) in India or internationally; and any lessons learned to date.

(2) Address awareness and capacity building barriers to the increased uptake of CSH in India by improving the awareness of CSH technologies and applications amongst key stakeholders, as well as increasing the capacity of all those involved in the CSH supply chain in India. These awareness and capacity building activities will include: increasing the capacity and awareness of CSH amongst current and prospective system manufacturers, vendors, energy auditors and advisors and other relevant professionals; increasing the knowledge base of relevant CSH success factors and key issues amongst academics, policy makers, and other CSH industry key stakeholders; undertaking promotional campaigns for CSH; promoting enhanced academic-industry partnerships; obtaining high-level management commitment to trialling CSH applications in relevant sectors; and documenting and disseminating best practices and lessons learnt. This will then ensure the wider on-going post project-end replication of CSH applications in India.

(3) Identify, implement and document the results from 30 demonstration projects to illustrate CSH technology applications in specific and real commercial field applications in India. In addition, 60 CSH replication projects will be supported during the project implementation. The replication projects’ results will be also monitored (albeit at a lower level of detail than for the formal demonstration projects). The results and lessons learned from the demonstration and replication projects will be incorporated in updated technology information packages and other materials during the latter stages of this UNDP GEF MNRE CSH project. The technology information packages will provide the technical basis for the 6-8 fold increase in annual CSH market installations that will be achieved by the end of this project.

(4) Identify and remove financial barriers to the increase of the solar collector area of annual CSH installations in India by a factor of 6-8 during the UNDP GEF MNRE CSH project implementation. This will involve: documenting the actual financial and payback performance of CSH installations in India; the development and support of an updated performance based MNRE CSH subsidy scheme; and the support of additional CSH financing mechanisms and capacity building of relevant financial institutions.


Strategic Considerations and Consistency with UNDP Programme

46. The overall strategy for the project is to create an enabling environment for the wider market development of CSH sector in India. The project activities will greatly assist the Government of India in the implementation of the Jawaharlal Nehru National Solar Mission.

47. The UNDP Country Programme (2008-2012) mentions that “UNDP will support all levels of government to implement environmental and energy policies by strengthening policy, legislative and regulatory mechanisms promoting low carbon development, standards and codes and more efficient use of natural resources. Capacities to integrate environmental management practices in planning processes will be developed at state and district levels. UNDP will also support national capacity development for the implementation of multilateral environmental agreements”.

48. The UNDP Country Programme Action Plan (2008 -2012) refers to the UNDAF Outcome 4 that deals with supporting the Indian government’s efforts towards meeting its commitments under multilateral environmental agreements through a two pronged approach involving leveraging of additional environmental finance and also supporting activities on the ground that seek to safeguard environmental resources. To that effect, a special focus will be placed on energy efficiency in order to contribute to reduction of GHG emissions in energy intensive industries, transport and commercial sectors, where population and economic growth have resulted in rapidly increasing energy demand. The program will also identify and facilitate access to clean energy (and will pilot renewable energy technologies) to reduce greenhouse gas emissions and local pollutants.

6. POLICY CONFORMITY AND COUNTRY OWNERSHIP

Policy Conformity

49. The UNDP GEF MNRE CSH project fully conforms to the Strategic Programme (SP-3) Promoting Market Approaches for Renewable Energy under the Climate Change focal area strategy of GEF-4.

Country Eligibility

50. India ratified the United Nations Framework Convention on Climate Change (UNFCCC) on 1 November 1993. India has completed and submitted its First National Communication and is currently preparing its Second National Communication.

7. PROJECT OBJECTIVES, OUTCOMES AND OUTPUTS

Project Goal and Objective

51. The project goal is the reduction of GHG emissions from low and medium temperature process heat applications in India through the use of CSH systems. The project objective is increased use and promotion of CSH systems for low and medium temperature process heat applications. This will be achieved by the integrated removal of the key barriers that prevent the wider adoption of CSH technologies in India. The project’s emission reduction estimates are quantified in Annex D.

Project components, outcomes, outputs and activities52. The major components and expected outcomes of the project are:

Component 1: Technical capacity development


Outcome 1.1: Enhanced understanding of CSH technologies, applications and marketsOutcome 1.2: Adoption of standards and specifications for guidance of manufacturers and users for assurance of CSH quality, safety, and performanceOutcome 1.3: Adequately capable and operational testing laboratories for verification of manufacturer claims and guidance of CSH users to enable informed decisions

Component 2: Awareness enhancement and capacity buildingOutcome 2.1: Strengthened technical capacity and awareness of stakeholders of CSH systems for industrial/ institutional process heat applicationsOutcome 2.2: CSH project deliverables facilitated and/or influenced the widespread replication of CSH technology applications in India

Component 3: Pilot demonstration of CSH technologies for various applications Outcome 3.1: Increased number of commercial and near-commercial CSH technologies for diversity of applications. Outcome 3.2: Improved technical and economic performance of commercial and near-commercial CSH technologies in an increased diversity of applications

Component 4 Sustainable financial approach in the adoption of CSH technologies and applications in India

Outcome 4.1: Enhanced understanding of the financial viability of CSH technologies and measures to mitigate investment risksOutcome 4.2: Promulgation of favourable financial policies that promote increased use and promotion of CSH for low and medium temperature process heat applications

The outcomes, outputs and activities are described below.

Component 1: Technical capacity development

Outcome 1.1: Enhanced understanding of CSH technologies, applications and markets

53. This outcome addresses the need to develop a better understanding of the five main solar concentrator technologies, the performance of existing installations, markets for CSH in India; and development of technology application information packages. As CSH is an emerging area, with continuous developments taking place in the technology and its applications, it is necessary that the preliminary knowledge gain

Documents

ACRONYMS AND ABBREVIATIONS · o Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) 2005: Supports extension of electricity to all rural and below poverty line households through a 90%