PV Based Solar Parks in India

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1		Mohamed M. Awad	--	2906	2022-10-24 12:40:20	\|
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This entry is adapted from the peer-reviewed paper 10.3390/su14031786

Solar parks are well-defined areas developed in the high solar potential area, with the required infrastructure to minimize the potential threat for the developers. Land occupancy is a major concern for the solar park. The government policy mostly emphasizes the use of waste-degraded land for solar parks. In a competitive energy market, any attempt to use waste-degraded land parcels, without policy regulatory support, can bring large-scale disruptions in the quality and cost of power.

solar park land utilization land transformation waste-degraded land

1. Introduction

A solar park is a fast and effective method to integrate clean energy, as a substitute for fossil fuel, into the grid. The type of land, business model, land acquiring method, and proximity to grid infrastructure are key factors that dictate the unit cost of power generation in ground-mounted solar plants. Ground-mounted solar plants need a large amount of land area, with the possibility of socio-economic and ecological impacts, depending on the location of the plant. Land occupancy for long periods, as well as land transformation from its original nature, are key factors that contribute to these environmental impacts. The impact of such externalities is complex to account for, considering the uncertainty, plurality, and lack of a single monetary measure standard.

India is a geographically diverse country, with a vast amount of waste degraded land parcels, spread in different agroeconomic regions. Though large patches of these waste lands have good solar irradiation, their use for solar projects can have additional capital, i.e., operation expenses to overcome challenges posed by land terrain and infrastructural facilities for power evacuation. As one of the largest GHG emitters, India is committed to achieve 175 GW of renewable energy, of which, 100 GW will be solar power ^[1]. In a competitive energy market, the use of such land parcels can have disruptions in energy mix on volume and price, derailing commitments on global warming.

The development of large-scale solar parks is a fast mechanism to promote ecologically sustainable energy to meet the commitments on climate change initiatives ^[2] The relation between solar energy and economic development can be understood, in terms of energy security and the accessibility to electricity. As per ^[3] with annual per capita electricity consumption of 2000 kWh, approximately 3400 TWh per annum would be the energy required for the country by 2070, for which, approximately 38,313 sq. km of land will be required for integrating energy sources. The falling prices of solar PV components, favorable policies, and magnitude of projects have made solar feed-in-tariffs (FiT’s) as low as INR 2.44/kWh ^[4]. Similarly, the FiT’s for wind power has fallen to INR 2.44/kWh in February 2018 ^[5]. The cost of the land and its development cost put together will be approximately 40–50% of the total project cost in ultra-mega solar power projects. A one-megawatt (MW) ground-mounted solar PV power plant requires approximately 5 acres of land ^[6]. According to studies by ^[1], to fulfill the renewable energy targets kept by India in 2022, approximately 100,000 sq. km land will be required, and with unfocused implementation strategy, there can be a loss of cultivable land with socio-environmental impacts. In Europe, the legislative frameworks allow subsidies and incentives for promoting solar energy. However, the support from these initiatives is not provided to projects that are located in agricultural land. This has stopped land grabbing and selling/renting cultivable land for mere revenue ^[7]. In India, the use of hot–cold deserts, canal bunds, floating water bodies, and highway sides, etc., for large solar parks, are promoted, while there are no mandatory clauses to use them. There are no existing subsidies or incentives for use of the same, while the use of such land can be mandated on government initiated projects ^[8]. The solar power plant developer (SPPD) can choose the land, if there are no ambiguities on the land title, while the park should have transmission facilities, internal roads, irradiation, and access. This automatically drives the selection of land to peri-urban and village areas, rather than using waste degrade land banks.

Acquiring big land banks for solar projects is tough, which requires displacement of men and resources, often affecting the livelihood activities of the village. Researchers identified that land occupancy for large solar parks could affect food security, in terms of changes in land-use patterns, loss of natural vegetation, loss of topsoil, and displacement of manpower ^[9]. Crowdfunding in mega projects shall meet initiatives to tackle climate change, identifying the need of the farmers and incorporating them at the design level ^[10]. Large land cover, due to solar parks, can affect the properties of photosynthesis, due to lack of reach of sunlight, and could affect the carbon sequestration properties of soil for decades ^[6]. There is an average temperature rise between 3° C below the solar panels in temperate climatic conditions ^[9]. High temperatures will affect the efficiency of the PV, since the internal resistance is increased beyond the capacity of the material in cells ^[11]. Hence, the location of the plant and the suitable cell technology are important. According to ^[12], land utilization vegetation mix and occupation should go hand-in-hand. In the studies conducted by ^[13], the groundwater retention is dependent on the type of vegetation and activities that are done on top soil. The geographically fragile environments, intense human activities and climatic variation has influenced the precipitation–evaporation mechanism affecting regional water balances and distribution, leading to water retention and reduction in runoffs ^[14]. Geographical islands have a challenging environment to test renewable energy integration strategies, as well as cutting-edge technologies, due to the alternation between actual grid-connected and island modes ^[15].

The restoration of the landscape and vegetation after mega projects will help retain the local population ^[16]. The top-down and bottom-up approaches to development should consider the justification of land utilization in developmental objectives ^[17]. Considering the risks involved in mega projects, its wise to invest social capital in eco-environmental projects for ecological improvement ^[18]. The c-Si and thin-film (TF) PV-based systems have a harmonized median of GHG emissions around the lifecycle around 50 g CO₂ eq/kWh, thus further environmental damage during operation should be avoided ^[19].

The lack of land utilization policy poorly maintained land records, land price ceiling limits, technological impacts, and use of fertile/waste land pattern has delayed many of the solar park projects ^[4]. Lease of revenue land, lease, and/or purchase of private land are mechanisms to acquire land for renewable energy projects. The biggest challenge in private land lease/purchase is the conversion of fertile land with adverse impacts, due to land occupancy and transformation. While the advantage of using private land is near urban infrastructure facilities, the advantage of using revenue land is low rental costs and utilization of waste-degraded land parcels ^[20]. Acquiring revenue land for solar projects need approval from various departments; hence, it will be idle to use waste land parcels to minimize the land acquisition hurdles and their impacts ^[21]. Even though large patches of land in India are classified as waste or degraded land, due to waterlogging, steep slopes, or sandy desert, they could still be used for potential applications, including renewable energy integration, if carefully selected ^[22]. At least 58% of the total land of India can be considered solar energy-rich, with a solar energy potential of more than 5 kWh/m²/day.

The policy and regulatory guidelines mandate the use of land with good irradiation levels at a clearance ratio of 5 acres/MW, with a priority of waste/non-agricultural land (including hot/cold deserts) to be considered for ground-mounted solar energy projects ^[20]. However, developers prefer land that is fertile near the urban areas, in order to avoid the cost on excessive networks for transmission lines ^[21]. Apart from the socio-economic feasibility study, the solar park requires intensive civil infrstructure, which includes drainage, road networks, land conditioning, and power evacuation infrastructure ^[23].

The factors that have a direct influence on solar PV power generation cost are national policies in line with global commitments to meet climate change, maturity of technology, foreign policies on trade, and the global economy. The type of land, its topography, land acquiring method, the proximity of the land to the grid, infrastructure requirements, solar irradiation level, finance mechanism, and business model are decisive parameters classified under indirect factors ^[24]. Feed-in-tariff (FiT), feed-in-premium (FiP), and auction are pricing mechanisms used for implementing renewable energy systems as power sources. While FiT and FiP are tariff-based mechanisms, set by price-driven policy instruments, the auction mechanism seeks the best possible price from developers, through a competitive bidding process. India has shifted from feed-in-tariffs to auction mechanisms, as is the case with many nations from the time the prices for solar and wind energy integration have become comparable with fossil fuel integration ^[20]^[25].

Accelerated depreciation (AD), generation-based incentives (GBI), and viability gap funding (VGF) were mechanisms used for promoting the large-scale dissemination of solar-based power generation. Renewable purchase obligation (RPO) and renewable energy certificates (REC) were extended for industries for committing to buying/pooling renewable energy power. The renewable energy industry in India is privately led and capital-intensive. The major challenges in investment in renewable energy integration in India are identified as large, geographical divergence, concerning the level of available irradiance, differences in state/federal and central government policies, absence of long term debt financing sources with low-interest rates, anticipated technological leaps in renewable energy, renegotiation of signed power purchase agreements (PPA’s), and the credibility of the utility sector and clear land titles ^[25].

The literature survey concludes the following findings and limitations.

(i): India has abundant, solar energy-rich wastelands, categorized under different classifications in different states.
(ii): The solar park can address many externalities of fossil-based power plants, while there are adverse impacts on society, economy, and ecology, due to land utilization, land transformation, and lifecycle carbon footprints, which remain as negative externalities, not accounted for in the cost economics.
(iii): Measures to integrate solar energy were heavily incentivized, with solar power reaching par with fossil-based power generation. Any deviation in incentives/policy measures could bring disruptions, concerning quality and reliability.
(iv): While increasing the renewable energy mix in the grid is one key measure to meet global warming, the efficient use of renewable energy hotspots, technology updates with increasing capacity utilization factor, and optimized renewable energy mix in grid remain unanswered.
(v): The policy emphasizes the use of waste-degraded land for solar parks. However, there is no mechanism to measure its use, and there are no incentives to promote the use of wastelands. In a competitive energy market, any attempt to use waste–degraded land parcels, without proper policy interventions, can bring large-scale disruptions in quality and cost of power.

2. Discussion and Policy Recommendations

Studies on wasteland distribution and solar energy potential, show that there are abundant solar-rich wastelands, classified under different categories. Four locations, with different land topographies, soil characteristics, and agroclimatic zones, were selected to understand the effect of land characteristics on the power generation cost. The assessment shows that the intensity of waste-degraded land classification has a direct impact on the capital and operation expenses, in order to meet the challenges raised by the wasteland. The largest additional expense will be for a custom-designed module mounting structure and civil foundation. The environmental impact assessment on the four locations shows that Location 1 would have the maximum impact, since the land is located near the urban area, which was once used for agriculture. The use of such lands for solar parks can have adverse effects through land occupancy and transformation in the lifecycle of the plant, affecting the society, economy, and ecology of the region. The environmental impact assessment of Locations 2, 3, and 4 show that the impacts on society and economy are almost nil, since there is neither village displacement nor loss of livelihood activities. The lands being steep, saline (waterlogged), and sandy, respectively, do not have damage on ecology, concerning plant and animal species. However, specific studies need to be conducted on the effect of microorganisms in water.

The social, economic, and ecological impacts for Locations 2, 3, and 4 is usually not accounted for in the cost economics of solar parks; hence, not reflected in solar energy production cost. These impacts can be quantified, for economic analysis, under the opportunity cost of land, cost due to damage to ecology, and social cost of carbon. The opportunity cost of land can be defined as the second-best alternative use of the land, if the land was not used for the solar park. The ecology cost is defined as the loss in economy, per acre of land, by implementing the new technology put to operation. The social cost of carbon can be defined as carbon footprint during the lifecycle of the project and loss in carbon sequestration efficiency. The carbon footprint cost should be the sum of emission of carbon during the manufacturing of solar panels, its transportation to site, and during the recycling. The carbon sequestration efficiency should be the soil loss efficiency to capture the carbon dioxide, due to land utilization by solar panels during the lifecycle of the plant.

The analysis concludes that the use of wasteland for solar parks will have additional capital and operation expenses, which could be the major reason for solar park developers to consider good land parcels near urban infrastructure as the location for solar parks. In an energy-intensive and competitive market, the promotion of wasteland for solar parks should need policy-regulatory interventions. Considering the socio-economic and ecological impacts of using agricultural land in urban/semi-urban areas for solar parks, it is more important to promote waste-degraded land parcels for solar parks. Table 1 discusses the existing policy and regulatory framework for solar parks, as well as the required interventions that will enhance the use of waste-degraded land for solar parks.

Table 1. Existing policy framework and required interventions to promote wasteland for solar parks.

Decision Components		Support Tools	Existing Policy Framework and Strategy Adopted	Required Policy Interventions
Policy Factors	○ Government subsidies ○ Tax support ○ Finance schemes ○ Carbon reduction determinant	Favorable Policies	Central and federal systems provide tax supports/incentives/finance schemes for the dissemination of solar energy. Some incentives (such as benefits of accelerated depreciation, feed-in-tariffs, and generation-based incentives), promoted for dissemination of solar energy, are now curtailed.	Subsidies/tax support should focus to (i) link usage of waste-degraded land; (ii) address the difficulty of operation and maintenance in the waste land. Feed-in-tariff can be reintroduced for projects in waste-degraded land.
Policy Factors	○ Carbon reduction determinant ○ Renewable obligations	Regulatory Policies	Carbon reduction determinants were implemented through renewable purchase obligations (RPO). Buying renewable energy certificates (REC) is an option for industries to meet the criteria.	The benefits of RPO and REC should be linked to the utilization of waste/degraded land parcels. Investors/industries who invest in wasteland-based power generation should be more benefitted.
Economic factors	○ Project cost ○ Completion risk ○ Market risk	Business Risk	Investors look for a site that is close to urban/evacuation infrastructure to keep production costs minimal. Some projects do not get completed, due to hurdles in land/title clearances. Many states have reached energy self-sufficient and may not focus on further integration of solar energy.	Utilities should accept site-specific power generation rates. Provide an easy and fast mechanism to clear wastelands for projects at cheaper rates. Government should consider solar power generation from wastelands as a separate entity.
Economic factors	○ Profitability of project ○ Access to easy finance ○ Exit strategy after the initial investment	Financial Factors	Solar energy is a mature market in India, with very few margins and overnumbered integrators/contractors. Debt repayment periods are short-term in India. Investors bring foreign direct investment for debt financing. Investors look for an early exit, after the repayment period	The use of wasteland will bring additional capital and operation expenses. Site-specific bidding and special feed-in-tariffs to be promoted to lure investors. Site-specific bidding can revive the market. Risk remains the same.
Technical factors	○ Power purchase agreements (PPA) ○ Climatic variations ○ Natural calamities	Operational Risks	Investors prefer PPA for the lifecycle period of the plant. There are instances when PPA is renegotiated based on the revised rates on new tenders. Due to climate change, there are seasonal changes in all climatic zones. This can hinder the generation and cost economics. Climate change can bring unpronounced wind/hailstorms, which can damage the solar plant.	The use of wasteland brings risk to the project. PPA should include this risk with better breakeven and/or higher feed-in-tariff. Risk remains the same. Risk remains the same.
Technical factors	○ Newer technologies Improvements in capacity utilization factors (CUFs)	Technological Maturity	The PPAs are signed for a period of 25 years. New technologies can have a better capacity utilization factor (CUF), which can generate better power from the same location.	Site-specific bidding should keep technology-neutral. Investors should be allowed to change the system to adapt to the new CUF efficiency.

The following policy interventions are suggested for disseminating solar energy through the use of waste-degraded land parcels.

Solar park bidding should be site-specific, giving weightage to a selection of sites, including land topography and the associated civil and infrastructural costs. The agreed feed-in-tariffs should be in proportionate to the investments made in using the waste land parcels.
The government should rekindle schemes, such as accelerated depreciation and generation-based incentives, to promote the use of waste/degraded land for the solar park.
There should be a mechanism to calculate the hidden cost in the cost economics of solar parks, including the opportunity cost of land, the social cost of carbon, and ecology cost. This should be included in the cost economics to be considered as a developmental expense.
The developmental expense can be a one-time payment to government machinery by the park developer. Whenever a wasteland is used, the developmental expense can be waived off/incentivized.

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1. Introduction

2. Discussion and Policy Recommendations

References