Solar power for IT office buildings in India

The goals of the thesis will be achieved through the following the logical sequence:  Understanding the interdependence of Power Sector, IT Sector and Economy  Understanding the Indian

Beuth University of Applied Sciences

Department of Business Administration and Social Sciences Program: MBA Renewables

Solar power for IT office buildings in India: Evaluating cost benefits and ancillary

advantages

Master's Thesis

In order to earn the Master of Business Administration degree

Submitted by: Sakthi Ganesh Jayakumar

Matriculation Number: 804748

Submitted on: 27 January 2016

Supervisor: Prof Heinrich Lüthi-Struder

Evaluator: Prof Dr.-Ing Sven Tschirley

Executive Summary

In human history the 21st century will be described as the era of Information technology (IT) The innovations in Information technology has benefited other areas such as Medicine, Education, Transportation and many more India has been one of the biggest beneficiaries of the IT wave However the growth of the ICT sector

in India is pulled back because of external circumstances like

problems in Power Sector Unreliable power supply is a major

problem for the ICT sector The main goal of this thesis is to

determine if renewable energy could solve this problem and if

renewable energy is financially feasible for the IT industry

The results of this study shows that Solar PV is a good fit

when compared to other technologies and if the incentives and tax concessions extended by the government are appropriately utilized then it is financially viable for the IT companies to implement Solar

PV for captive generation The study also shows that there are

substantial cost benefits associated with replacement of Diesel generated electricity with the Solar PV generated electricity The financial analysis carried out as part of this study shows that the Levelized Cost of Energy (LCOE) of Solar PV electricity can be as low

as INR 5-7 and the payback period of Solar PV project could be as low as 2 years under certain conditions The diesel replacement

scenario results show that merely by reducing the diesel generated electricity by Solar PV, a company can save substantial amount of money Apart from the direct economic benefits for the company, it

is also shown that if all the existing IT companies generate 100% of

their consumption, then at least 2 million other people will be

benefited from Grid electricity

List of Figures

F IGURE 1 C ONTRIBUTION OF SECTORS TO THE I NDIAN GDP S OURCE : P LANNING COMMISSION 5

F IGURE 2 M ARKET S IZE OF IT INDUSTRY IN I NDIA S OURCE : N ASSCOM , T ECHSCI R ESEARCH 6

F IGURE 3 G ROWTH OF E LECTRICITY S ECTOR IN I NDIA FROM 1947-2015 S OURCE : P IE C HART : 9, CEA, I NDIA 7

F IGURE 4 D EMAND S UPPLY GAP IN T AMIL N ADU , I NDIA S OURCE : B USINESS T ODAY , J ULY 22 2012 10

F IGURE 5 I NDIA IT/ITES REVENUE AND E MPLOYMENT GROWTH S OURCE : D ATA COLLECTED FROM MULTIPLE SOURCES 12

F IGURE 6 E LECTRICITY DEMAND GROWTH OF THE ICT S ECTOR S OURCE : G REENPEACE , M AY 2015 14

F IGURE 7 R ENEWABLE ENERGY INVESTMENTS BY T OP IT COMPANIES S OURCE : G REENPEACE I NTERNATIONAL , M AY 2015 15

F IGURE 8 R ENEWABLE E NERGY BY I NSTALLED C APACITY IN I NDIA S OURCE : “C REATIVE C OMMONS R ENEWABLE ENERGY SHARE I NDIA 2013” BY S KYDOC 28 IS LICENSED UNDER CC BY 2.0 16

F IGURE 9 C OLOCATION D ATA CENTER STATISTICS , I NDIA S OURCE : D ATA C ENTER M AP 19

F IGURE 10 I NFORMATION T ECHNOLOGY COMPANY LOCATIONS IN S OUTH I NDIA S OURCE : G OOGLE M APS 19

F IGURE 11 P OWER T ARIFF H IKE IN T AMIL N ADU S OURCE : R ECONNECT E NERGY 22

F IGURE 12 2014 T HUS F AR : T HE F ALL OF O IL AND I TS E FFECTS ON I NDIAN F UEL P RICES , S OURCE : C APITAL M IND 23

F IGURE 13 P OWER G RID T RANSMISSION S YSTEM S OURCE : G REEN C LEAN G UIDE , A UTHOR : S HAILESH 25

F IGURE 14 T YPICAL BREAKDOWN OF THE DATA CENTER ENERGY CONSUMPTION , S OURCE : E LECTRONICS C OOLING , I SSUE : D ECEMBER 2010 29

F IGURE 15 S OLAR A SSISTED C OOLING USING ARUN DISH , S OURCE : C LIQUE S OLAR 30

F IGURE 16 A DVANCED S OLAR A IR CONDITIONING T ECHNOLOGY IN A RAB E MIRATES , S OURCE : RAC M AGAZINE 31

F IGURE 17 S OLAR PV R OOFTOP S YSTEM IMPLEMENTED AT M URUGAN T EXTILES S OURCE : TATA P OWER SOLAR 34

F IGURE 18 S OLAR PV CAPACITY IMPLEMENTED BY I NFOSYS IN DIFFERENT CITIES S OURCE : I NFOSYS 36

F IGURE 19 C OMPARISON OF S OLAR PV S YSTEM PERFORMANCE WITH E-W FACING PANELS WITH A SYSTEM WITH S OUTH F ACING PANELS S OURCE : E NERGETICA I NDIA 37

F IGURE 20 RID TIED ROOF TOP SOLAR PV SYSTEM WITH FULL LOAD DG BACKUP SYSTEM S OURCE : F IRST G REEN C ONSULTING 42

F IGURE 21 C ONDENSED LIST OF S OLAR POLICIES IN S OUTH I NDIAN STATES S OURCE : M ARCH 2015 S UMMARY SHEET PUBLISHED BY IREEED 43

F IGURE 22 R ECOMMENDED FLOW OF IMPLEMENTING S OLAR PV S YSTEM 45

F IGURE 23 T OP VIEW OF THE I NFOSYS P OCHARAM C AMPUS S OURCE : G OOGLE M APS 48

F IGURE 24 F RONT VIEW OF I NFOSYS P OCHARAM CAMPUS S OURCE : T HATSOKDUDE COM 48

F IGURE 25 S OLAR I RRADIATION DATA FOR H YDERABAD S OURCE : G AISMA 49

F IGURE 26 S UN RISE AND S UN SET TIMES FOR 6 MONTHS FROM THE DATE OF A CCESS S OURCE : G AISMA 49

F IGURE 27 S UN RISE AND S UN SET TIMES FOR PREVIOUS 6 MONTHS FROM THE DATE OF A CCESS S OURCE : G AISMA 49

F IGURE 28C ONSOLIDATED LCOE VALUES FOR 4KW H PER K W P PER DAY YIELD 55

F IGURE 29 F IGURE : 2-26 C ONSOLIDATED LCOE VALUES FOR 5KW H PER K W P PER DAY YIELD 56

F IGURE 30 C ONSOLIDATED S OLAR PV FINANCIAL PARAMETERS FOR 4 KW H PER K W P PER DAY YIELD 57

F IGURE 31C ONSOLIDATED S OLAR PV FINANCIAL PARAMETERS FOR 5 KW H PER K W P PER DAY YIELD 58

F IGURE 32 T YPICAL AC AND DC POWER SYSTEMS IN D ATA CENTERS S OURCE : NTT F ACILITIES , I NC T OKYO J APAN 70

Table Of Contents

Executive Summary 1

1 Introduction to thesis task and scientific methods 1

2 Implementation of the thesis tasks 3

the IT Sector 3

2.1.1 Overview of Power Sector in India _ 6 2.1.1.1 Existing Challenges in Indian Power sector: _ 8 2.1.2 Overview of Indian IT Market: _ 10 2.1.2.1 Effect of Growth of ICT sector on Power Sector: 13

2.3.1 Clustered model of IT Company locations 18 2.3.2 Existing power supply scenario and challenges faced by IT companies: 20 2.3.2.1 Impact of unreliable Power supply: 21 2.3.2.2 Impact of rising Electricity costs: 21 2.3.2.3 Impact of rising fossil fuel prices: 23 2.3.2.4 Impact on community: 24 2.3.3 Options available for IT Companies to meet power supply requirements _ 24 2.3.3.1 Using Grid as Primary and Diesel as secondary source _ 24 2.3.3.2 Purchasing power through Open Access Mechanism (OA): _ 25 2.3.3.2.1 Downsides associated with Open Access mechanism: _ 26 2.3.3.3 Investing in Renewable energy power generation _ 26 2.3.3.3.1 Possible benefits in adopting renewable energy: _ 27

2.4 Selection of suitable renewable energy source for IT companies: _ 27

2.4.1 Review of Solar thermal energy based models 29 2.4.1.1 Solar Thermal Air conditioning options: _ 29 2.4.1.1.1 Solar Assisted Cooling using VAM and Arun Dish: 30 2.4.1.1.2 Solar Cooling using Micro-Concentrators and Absorption Chillers: _ 31 2.4.2 Recommended Solar Technology suitable for ICT companies: 32

2.5 Overview of existing Solar PV implementations in India 33

2.5.1 Notable Solar PV projects in South India: 33 2.5.1.1 Solar PV Project Case Study 1 - Murugan Textiles: _ 34 2.5.1.2 Solar PV Project Case Study 2 - Infosys: _ 35 2.5.1.2.1 Special feature of Solar PV system installation at Chennai campus: 37

2.6.1 Arrangement as a captive generating plant for the roof owners 39 2.6.2 Solar Lease Model with Sale of electricity to Grid 39

2.7 Selection of Solar PV System type suitable for IT Companies _ 40

2.7.1 Type of Solar PV Systems, their Pros and Cons: _ 40 2.7.1.1 Grid Tied Solar PV System: _ 41 2.7.1.2 Off grid Solar PV System: _ 41 2.7.1.3 Grid Interactive Solar PV System: 41 2.7.2 Suitable Solar PV System type for IT Companies _ 42

2.8 Policies and Incentives available for Solar PV: _ 43

2.8.1 Accelerated Depreciation Benefit: 44

2.9 Recommended flow for implementing Solar PV System: 44 2.10 Typical electricity consuming devices in Information Technology

companies: 45 2.11 Analysis of financial viability of Solar PV Roof top Systems for IT

Companies: 47

2.11.1 Method followed to select project location of example Solar PV System: 47 2.11.2 Selected building and Solar Potential in that location: 48 2.11.3 Overview of selected financial parameters: 50 2.11.3.1 Levelized Cost of Energy – (LCOE) 50 2.11.3.2 Payback period: 51 2.11.3.3 Internal rate of return – (IRR): 51 2.11.3.4 Cost Benefit Analysis of Diesel Replacement: 52 2.11.4 Assumptions made for financial analysis: 52 2.11.5 Detailed explanation of the Excel file layout: _ 54 2.11.6 Interpretation of the financial analysis results: _ 55 2.11.6.1 LCOE Analysis results: _ 55 2.11.6.2 Payback period Calculation results: 56 2.11.6.3 Internal Rate of return calculations: 56 2.11.6.4 Cost benefit analysis of Diesel Replacement scenario results: _ 57 2.11.7 Consolidated results and conclusions: 57

2.12 Analysis of Ancillary benefits of implementing Solar PV System: 58

2.12.1 Ancillary benefits for the company implementing Solar PV: _ 58 2.12.2 Impact of Captive generation by the IT Company on the Grid: _ 59 2.12.3 Impact of Captive generation by the IT Company on the community: _ 60

2.13 Risk Analysis of Solar PV System implementation Project: _ 61

3 Solar PV Financial viability calculation results and conclusions: 67

4 Future prospects and emerging technologies relevant to ICT sector: 69

1 Introduction to thesis task and scientific methods

The Master’s Thesis will evaluate the financial feasibility of integrating Renewable Energy in Information Technology (IT)

companies located in India, the advantages of implementing

renewable energy from the company’s perspective and also from the perspective of the community Information Technology (ICT) sector has grown tremendously in the past 25 years in India and is continuing to grow1 The increasing power consumption due to the increasing population and growing industrial sectors including IT Sector, is not matched by the increase in power generation This has resulted in erratic power supply even in big cities Companies in the ICT sector are largely dependent on two important resources:

1 Human resource 2 Computer hardware & Network equipment These computers and Network equipment require uninterrupted power supply for working The frequent power cuts prevailing in most part of the country is detrimental to the growth of the IT

Industry which is one of the fastest growing sectors in India today

Southern Indian states of Tamil Nadu, Karnataka, Kerala, and Andhra Pradesh (Recently bifurcated in to Telangana and Andhra Pradesh) have nearly half of all the existing IT companies in India2 Rest of the IT companies are spread across other parts of India Southern India is taken as the example region for this study The discussions related to current energy costs, energy demand gap, existing policy structures etc are limited to the Southern States due

to the varied nature and the vastness of the country However the results from this study can be applied to other parts of India after considering changes pertaining to those areas

1 See Federation Of Indian Chambers of Commerce and Industry, Sector Profile: Information Technology (IT), www.ficci.com/sector/21/project_docs/ficci_website_content_-it.pdf , (25.12.2015)

2 See Wikipedia, Economy Of South India,

https://en.wikipedia.org/wiki/Economy_of_South_India , (25.12.2015)

The goals of the thesis will be achieved through the following the logical sequence:

 Understanding the interdependence of Power Sector, IT Sector and Economy

 Understanding the Indian Power Sector, existing power sector setup and the current challenges

 Analysis of various renewable energy sources available for the IT companies and selection of suitable option

 Review of existing state policies with respect to renewable energy

 Evaluate the financial viability of integrating renewable energy for a typical IT Company

 Analyze the advantages of implementing the renewable energy from company’s perspective

 Analyze the positive effects on the state DISCOMs because

of the self-generation by IT companies

 Analyze the impact on the community due to the reduced burden on the Grid

With regards to the scientific methods applied, the thesis will

undertake Documentary analysis using Secondary data relevant to integrating renewable energy to the energy mix of the IT companies and also Cost Benefit analysis of an example project The research undertaken and methods applied are to provide a comprehensive answer to the following questions:

1 Is it financially viable to implement renewable energy in Indian IT Companies?

2 What are the ancillary benefits for the company

implementing renewable energy for their own consumption?

3 What other advantages to the society can be expected by self-generation of electricity by IT companies?

The results of this thesis is expected to shed light on the suitable renewable energy technology for IT companies, key requirements for the financial viability of integrating renewable energy in IT

companies and the expected benefits from the companies

perspective and from the community’s perspective

2 Implementation of the thesis tasks

Power Sector and the IT Sector

India is one of the largest democracies in the world today With over 1.3 billion people, it is already home to approximately 17.5% of all humans in this world The population is growing at a rate of 1.2% and is expected to become the most populous country

in the world by 20223 This growth in population also means that the demand for any consumable goods and services will also

increase The country has to grow more food, build more houses, improve infrastructure etc It is then no surprise that the

requirement for electricity will also increase many fold In fact, many states in India are already struggling to meet the electricity demand It has been calculated that India’s GDP is constrained by

up to 2% per annum just because of the power shortages prevalent

in many parts of the country When we consider that the GDP is at approximately $8 Trillion (By Purchasing Power Parity basis as of 2015), the 2% drop is a whopping $160 billion4 The projection is that the total power demand would grow at a rate of approximately 10-12% per annum up to 2017 and this is set to widen the loss of GDP due to power shortages unless the country finds a way to

bridge the gap between the power demand and power generation

Rapid developments in the world of science and technology has resulted in humans relying more and more on electrically

powered machines and gadgets In the developed countries of the world power cuts are very rare and even if it happens, it lasts only for a short amount of time On the other hand, developing countries like India are caught between the economic growth and the lack of sufficient energy required to meet the economic growth Barely 25 years ago, only a very small percentage Indian households had a telephone line Today one can see that even a remote village house has one or more mobile phones The electricity demand of these small gadgets is mounting more and more pressure on the grid The government is trying to modernize the existing grids and increase generation to meet the demands One of the other major areas of concern is the transmission and distribution losses which is pegged

at approximately 23% A recent study indicates that the losses are

as high as 50% in some parts of the country5 Some parts of the country does not even have access to grid electricity Nearly 300 million Indian citizens have no access to grid electricity6 This means that every watt of grid electricity that is not drawn by the existing grid consumer would save more than one watt for the grid and will enable someone else to get access to that saved energy

Traditionally India has been an Agricultural society Even today Agriculture is the largest employment sector in India In

terms of GDP however, the share of Agriculture sector has been steadily declining while the contribution from Industrial and Services sector is steadily increasing even though in absolute numbers it has grown in the past 65 years

The graph below7 shows that the contribution towards GDP from Services sector has outgrown Agricultural and Industrial sectors

Figure 1 Contribution of sectors to the Indian GDP Source: Planning commission 8

The Services sector covers a wide variety of activities such as trade, transportation, financing, Hotels and restaurants etc IT/ITES

sectors otherwise known as ICT sector also comes under the

services sector ICT Sector in India is one of the fastest growing services sectors as shown in the figure below9 ICT sector has a huge dependency on Human resources and Electricity consuming components such as Computers, Network devices, HVAC equipment etc

Figure 2 Market Size of IT industry in India Source: Nasscom, TechsciResearch 10

With the projected growth of ICT sector, it is clear that the need for more human resource and electrical energy by the ICT sector will continue to increase Considering that the country does not have enough electrical energy generation capacity to meet the current demand, it is clear that all other possible energy generation options should be explored to address the current needs and also to plan for the future requirements

2.1.1 Overview of Power Sector in India

India’s power generation largely depends on fossil fuel based power plants 60% of the total power generation is based on Coal India also produces energy through gas, Diesel, Nuclear, Hydro, Biomass, Wind and Solar etc This dependence on fossil fuel also has a big economic impact in the country’s finances as major

portions of the required Oil and Coal are imported

10 See India Brand Equity Foundation, IT & ITeS Industry in India,

http://www.ibef.org/industry/information-technology-india.aspx , (26.1.2016)

Figure 3 Growth of Electricity Sector in India from 1947-2015 Source: Pie Chart: 9, CEA, India 11

Even though the country has natural coal reserves, the gross

calorific value of the Indian coal is pretty low compared to the coal found in other parts of the world So more coal is required to

generate equivalent amount of electricity For example the Indian power plants use 0.7 kg of Indian coal to generate 1 kWh whereas the US based power plants consume 0.45kg of coal locally mined in the USA The higher ash content of Indian coal also results in bigger impact to the environment12 In terms of consumption of specific sectors, as of 2015, the Industrial sector consumes around 42% of the generated electricity Domestic consumption stands around 24% followed by the Agriculture sector at 18%13

11 See India Environment Portal, Growth of Electricity Sector in India from 1947-2015,

from-1947-2015/ (20.12.2015)

http://indiaenvironmentportal.org.in/content/413926/growth-of-electricity-sector-in-india-12 See Wikipedia, Electricity Sector In India – Coal Supply Constraints,

https://en.wikipedia.org/wiki/Electricity_sector_in_India , (8.09.2015)

13 See Wikipedia, Electricity Sector In India – Demand Trends,

https://en.wikipedia.org/wiki/Electricity_sector_in_India , (8.09.2015)

Coal/Lignite (164636 MW) 61%

Diesel (1200 MW) 1%

Installed Generating Capacity as on 31.03.2015

(Total = 271722 MW)

Many Indian states extend free electricity or heavily subsidized

electricity to the Agricultural sector Even though the original intent was to support farmers and the agricultural sector, this scheme has largely led to pilferage and wastage of electricity The electricity supply is also very unreliable due to poor infrastructure and lack of required capacity to meet the demand Bringing electricity to

remote villages of India is a slow process in this vast country After more than 60 years after independence, only recently was the

southern Indian grid got connected to the central grid According to the data from the World Bank, more than 20% of Indian population does not have electricity which is approximately 1.4 billion people14

The Government of India is taking various initiatives to

improve the supply demand gap But considering that nearly 20% of Indian citizens are yet to receive any grid power, Government will have to strike a balance between improving the energy availability for the industry vs connecting the off grid population So the

benefits from Governmental efforts may not bring in relief for the IT sector in the short term and may not match the pace at which the

IT sector is growing It is in the interest of the companies

themselves to take necessary steps to secure their own energy

requirements

2.1.1.1 Existing Challenges in Indian Power sector:

One of the major challenges in effectively utilizing the

generated electricity is the Transmission and Line losses (T & L) India’s T&L losses stand around 23% which is one of the highest in the world In fact the World’s average T&L loss is only pegged at 8.9%

14 See The World Bank, Access to Electricity (% of Population),

http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS , (08.09.2015)

Sample studies carried out by independent agencies such as TERI even indicate that the losses are as high as 50% in some states15 The T&L losses mainly stems from poor infrastructure, poor quality of equipment, theft and pilferage Even though the problem

is clear, there is no easy solution for this problem due to various different aspects such as the huge investment that is required, lack

of political will to take certain hard decisions etc Because of this huge T&L losses, every watt of electricity that is not consumed by a consumer is worth more than a watt

Investment from state governments to augment the

generation capacity to meet the increasing demand is also not

adequate in general The political class resorts to short term

measures rather than taking a long term view due to the political reasons The state electricity boards incur heavy financial losses due

to the political decisions made For example, increasing consumer electricity tariff is not done in accordance with the actual cost

incurred, as such a decision will alienate the voters from the political party that is taking the decision These political considerations result

in mounting losses for the State Electricity Boards (SEBs) which are already in poor financial conditions

Even though various Power reforms are being carried out, it will take a while for any tangible results to be visible on the ground All these financial problems mean less investment for expansion by the SEBs For example, the figure below shows the gap between the generation and the demand widening over a period of time in the state of Tamil Nadu

15 See The Energy and Resources Institute (TERI), Transmission and Distribution Losses

(Power), www.teriin.org/upfiles/pub/papers/ft33.pdf , (8.09.2015)

Figure 4 Demand Supply gap in Tamil Nadu, India Source: Business Today, July 22 2012 16

The supply vs demand gap in Tamil Nadu is also true for many of the other states in India So it is apparent that irrespective

of what the government is doing or planning to do, there is always a scope and necessity for the private companies, individuals etc to do their part by reducing their consumption or generating at least portion of their consumption locally, thereby reducing the burden on the grid

2.1.2 Overview of Indian IT Market:

India’s Information Technology (IT) story started at least a decade earlier than the Globalization efforts and the associated economic reforms that opened up the Indian market in the early 90s The IT has grown tremendously in the past 25 years in India

16 See Business Today, Low Voltage Story,

revive/story/185965.html , (15.09.2015)

http://www.businesstoday.in/magazine/features/tamil-nadu-electricity-board-measures-to-The push to the Indian economy during the 90’s through

Globalization, coupled with the IT revolution has been the primary drivers of India’s economic growth This combined effect has

increased the per capita income (nominal) from US $329 in the early 90’s to approx US $2110 in 2016 (estimated)17 The IT

industry by 2012 contributed nearly 8% of the overall GDP18 and continues to grow at a faster pace

The Indian Information Technology industry is the preferred sourcing destination for global IT companies due to the availability

of quality human resource at approximately 3-4 times cheaper cost compared to say Europe or American market standards The Indian

IT market is expected to triple the current annual revenue reaching US$350 billion by FY 202519 Gartner report on public cloud predicts that the Public Cloud market of India is set to reach US $1.9 billion

by 201920 E-commerce in India has grown many fold in the past

10 years Home grown E-commerce companies like Flipkart,

Snapdeal etc have brought in a revolution of sorts in the retail

segment Global companies like Amazon are not far behind ramping

up their presence in India

IT industry is the largest private sector employer in India IT sector has created jobs for approximately 3 Million people through direct employment and employs close to 9 million people in indirect employment (2014-2015) According to projections from NASSCOM,

by the year 2020 the IT/BPO industry would have reached a total revenue of US $360-$375 billion (Approximately 10% of GDP) and would have provided employment for close to 30 million people (5 Million direct jobs and 25 million indirect jobs)

17 See Wikipedia, India, https://en.wikipedia.org/wiki/India (08.09.2015)

18 See Statista The Statistic Portal, Contribution of Indian IT industry to India’s GDP 2013, http://www.statista.com/statistics/320776/contribution-of-indian-it-industry-to-india-s-gdp/ , (12.10.2015)

19 See India Brand Equity Foundation IBEF, IT & ITES Industry in India,

http://www.ibef.org/industry/information-technology-india.aspx , (12.10.2015)

20 See Gartner, Gartner Says Indian Public Cloud Services Market Will Reach $731 Million in

2015, http://www.gartner.com/newsroom/id/3156617 , (12.10.2015)

Figure 5 India IT/ITES revenue and Employment growth Source: Data collected from multiple sources 21

The IT industry can be divided in to four major segments –

Computer Hardware companies, IT Services, Business Process

Management (BPM), Software Products & Engineering Services companies At the start of last decade the Indian IT industry was majorly dependent on the foreign markets While the Foreign clients still make up most of the revenue, the domestic industry has grown

as well The growth of mobile phones and the increasing number of Internet connected consumers are driving all the different segments

to go digital Sectors like Education, Hospitality, FMCG,

Transportation, Automotive etc are all moving to setup their shops

on the Internet

21 See Indian IT-ITes Industry – Slide 6, Indian IT-BPO industry - FY2011-performance & future trends by NASSCOM – Slide 6, NASSCOM Delegation to Africa 2012 – Slide 11, India IT-BPM revenues: USD 118 billion in FY 2014, http://www.slideshare.net/mitul1129/indian-itites- industry , http://www.slideshare.net/nasscom-emerge/indian-itbpo-industry-

fy2011performance-future-trends-by-nasscom ,

http://www.slideshare.net/KuzaBiashara/nasscom-delegation-to-africa-2012 ,

http://www.cliffcreations.com/images/poster1.jpg , (7.10.2015)

0 50 100 150 200 250 300 350 400

FY03 FY04 FY05 FY06 FY07 FY08 FY11 FY20

14

FY20

* (Proj ectio n) Total Revenue (Billion USD) 16.1 21.6 3.5 4.5 47.8 64 59 118 360

Direct Employment (Million

persons) 0.67 0.83 1.05 1.25 1.63 2.2 2.54 3.1 5

Indian IT/ITES Industry Revenue and Employment Growth

Total Revenue (Billion USD) Direct Employment (Million persons)

This is driving growth on the IT infrastructure services and to cater for this domestic demand, the number of data centers in India are starting to increase The data from Data Center Map shows that there are 105 Co-location data centers in India22 .The recent push

to “Digital India” to provide digital services and “Start-up India” to encourage home grown startups etc are expected to further

increase the pace of development NASSCOM predicts that India will have 11,500 tech start-ups by 2020 up from 3100+ startups today

2.1.2.1 Effect of Growth of ICT sector on Power Sector:

In 2012, close to 4.7 percent of the world’s electrical energy was consumed by ICT sector23 Considering that India is one of the top outsourcing destinations for the global IT companies, it can be safely assumed that the trend of ICT company electricity

consumption would be similar if not more than the global trend Projected growth of IT sector in India depends on maintaining the current success and also be able to capitalize on the new

opportunities

This means more head count and expansion of campuses which automatically translates to more electricity consumption Apart from the direct consumption of power by the IT sector, it also contributes

to increase in consumption of electricity by way of improved

standard of living of IT employees So it is evident that the growth

in ICT sector is increasing the burden on the electricity grid which is already not able to meet the demand The fact that the Internet has become main stream and has entered all aspects of life means that there is an increased use of IT hardware around the globe

There is also a growing awareness among IT companies regarding their own power consumption resulting in a broad consensus

regarding the remedial measures that should be taken to reduce and Offset the overall consumption through renewable energy The

“Clicking Clean” report by Green Peace indicates that the

Information and Communications Technology (ICT) Sector could be consuming up to 12% of Global electricity by 2017

Figure 6 Electricity demand growth of the ICT Sector Source: Greenpeace, May 2015 24

Renowned IT companies such as Apple, Google, Microsoft, Amazon etc are recognizing the need for clean energy and have varying degree of plans Some of these companies even have a goal

of 100% renewable energy consumption The table below highlights the renewable energy deals made by ICT companies in the past couple of years (2014 and 2015)

24 See Greenpeace International, Clicking Clean: A guide to building the green Internet,

http://www.greenpeace.org/usa/wp-content/uploads/legacy/Global/usa/planet3/PDFs/2015ClickingClean.pdf , (13.10.2015)

Figure 7 Renewable energy investments by Top IT companies Source: Greenpeace International, May

2015 25

It is clear that most of these power purchase agreements are for data center operations and as Internet is largely run from data centers, it can be expected that more such initiatives would follow Some of the data centers also offer their customers a renewable option

With a total installed capacity of 250+ GW of electricity, India

is one of the top 5 power generators in the world However still over 80% of the rural population (and close to 20% of total population) have no access to grid electricity

So there is a necessity for increasing the energy production to cater for those who are living outside of the grid Nearly 70% of the

current capacity comes from Fossil fuels However the scenario is changing The recent advances in renewable energy technologies and the falling costs have brought forward the advantages of India’s renewable energy potential Being a tropical country, India is

blessed with over 300 days of solar radiation

25 See Greenpeace International, Clicking Clean: A guide to building the green Internet, http://www.greenpeace.org/usa/wp-

content/uploads/legacy/Global/usa/planet3/PDFs/2015ClickingClean.pdf , (13.10.2015)

Company Name Location Renewable Source Deal Description (Year)

Google Finland/Sweden Wind energy Contract for 59 MW for 10 years to Power Finland data center

(2014) Google Netherlands Wind energy Purchased 62MW to power E600m data center (2014)

Apple United States Hydro Energy Purchased Micro-hydro project to power data center (2014) Apple United States Solar New data center to be 100% powered by 70MW Solar (2015) Apple United States Solar PPA worth $850M for 130MW of Solar energy to power HQ and

CA data centers.(2015) British Telecom United Kingdom Wind energy Signed PPA worth £440 million for Wind energy (2014)

Microsoft United States Wind energy Signed PPA for 175 MW od Wind energy to power the Chicago

data center for next 20 years (2014) Yahoo United States Wind energy Signed PPA for half of 48MW wind project to power Nebraska

data center (2014) NTT Communication India Wind energy Signed PPA for powering India data center Power is 11 - 13%

cheaper than grid power (2014) Amazon United States Wind energy Signed PPA for 150 MW for next 13 years (2015)

It is estimated that the solar irradiance received by India can

generate approximately 5000 Trillion kwh per year26 Recent studies have suggested that the country has a potential to generate 2000 –

3000 GW of Wind energy27 Wind energy is already one of the

biggest contributor when compared to other renewable energy sectors However it can been seen that only a small percentage of the available Solar and Wind potential has been realized so far

Figure 8 Renewable Energy by Installed Capacity in India Source: “Creative Commons Renewable energy share India 2013” by Skydoc28 is licensed under CC BY 2.0

The government has taken cognizance of these facts and is taking lots of initiatives to improve the contribution of alternative energy sources The policy initiatives by the Government of India in the past few years have been supportive of the renewable energy technologies In the year 2006 Government of India re-christened the Ministry of Non-Conventional energy sources that was setup in

1992, to Ministry of New and Renewable Energy (MNRE) to give fillip

to the country’s energy security initiatives28

26 See NREL, UPDATED India Solar Resource Maps ,

http://www.nrel.gov/international/ra_india.html , (20.12.2015)

27 Phadke, Amol et al., 2011 Reassessing Wind Potential Estimates for

India: Economic and Policy Implications , https://ies.lbl.gov/sites/all/files/lbnl-5077e_1.pdf

28 See Ministry of New and Renewable energy (MNRE), Introduction,

http://www.mnre.gov.in/mission-and-vision-2/mission-and-vision , (7.12.2015)

The main goals of this Ministry are to reduce the dependence on the imported fossil fuel by increasing the contribution of renewable energy, improve energy availability, and make it more affordable and also to improve the per capita consumption on par with the global consumption by 2050

MNRE is the nodal Ministry of Government of India for all matters related to the new and Renewable energy MNRE has

initiatives in various renewable energy fields including Solar, Wind, Geothermal, Hydro, Tidal, Biomass etc One of the notable initiative that is of interest is the Jawaharlal Nehru National Solar Mission (JNNSM) that was launched in the year 2010 The National Solar Mission (NSM) targets had a target of 20,000 MWp of Grid

connected Solar power by 2022 at that time29 Recently this target has been revised from 20,000 MWp to 100,000 MWp of Grid

Connected solar power by the year 2022 To accelerate the progress and to achieve this revised target, in December 2015, the

Government of India increased the budget for Grid connected

Rooftop systems from 600 Crore INR (approx US $90 million) to

5000 Crore INR30 (approx US $750 million) This budget will be used as a capital subsidy for Residential, Govermental, social and Institutional sector It is expected that this budget will bring in additional capacity of up to 40GW rooftop solar

Industrial and Commercial sectors do not have access to

government subsidies However they have a different set of

incentives such as Tax Holidays, Accelerated Depreciation, excise duty exemptions etc In addition to the incentive route, the

government is also driving growth of this sector by mandating

Renewable Purchase Obligations for the Distribution Companies, Open Access Consumers and Captive users

The RPO regulations are defined by respective state regulatory commissions and may differ from one state to another31

faced:

2.3.1 Clustered model of IT Company locations

Most of the IT companies in India are based out of what are classified as Tier 1 or Tier 2 cities Tier 1 cities have a population of above 100,000 and Tier 2 cities have a population of 50,000 to 100,00032 Evidently the Grids/Substations servicing Tier 1 and Tier

2 cities are heavily utilized due to large population These cities are also home to other non-IT companies like car manufacturers or consumer goods manufacturing etc due to the available market size and easy availability of skilled labor The presence of human capital attracts new employers and this in turn increases employment opportunities attracting more and more people to these Tier 1 and Tier 2 cities In many cases the boundaries of these cities had to be expanded due to growth in what was considered as periphery area

of the city Figure below shows that out of the total 105 data

centers in India, nearly 40% are located in the South India

31 See Ministry of New and Renewable Energy (MNRE), Analysis of State-wise RPO Regulations across India, http://mnre.gov.in/file-manager/UserFiles/Solar%20RPO/analysis-of-state-RPO- regulations.pdf , (28.10.2015)

32 See Wikipedia, Classification of Indian Cities,

https://en.wikipedia.org/wiki/Classification_of_Indian_cities , (28.10.2015)

Figure 9 Colocation Data center statistics, India Source: Data Center Map 33

The figure below is a map showing the location of IT companies in South India The red dots represent the company locations

Figure 10 Information Technology company locations in South India Source: Google Maps 34

From the map it can be seen that the Information technology

companies are concentrated on few locations

Chennai, Bangalore, Hyderabad, and Trivandrum are the major

cities in which most of the IT companies in South India are situated These cities come under Tier 1 cities There are at least 1500+

software companies present in Software Technology Parks located in these cities There are also other IT companies which function from residential areas and other commercial buildings due to their small size or lack of offices in the Software Technology Parks The IT

industry employs at least 3.5 million people (direct employment) as per Nasscom, the apex body of IT industry in India35 At least half of these jobs are in South India due to the large number of companies present in this region

2.3.2 Existing power supply scenario and challenges faced

preferential treatment to SEZs when it comes to Power distribution

If there is a shortage of grid electricity, SEZs are least likely to be affected before other consumers However they do have the

following major operational challenges:

 Interruptions in Power supplied from the Grid

 Rising electricity costs

 Rising fossil fuel costs

 Impact on community due to existing practices

2.3.2.1 Impact of unreliable Power supply:

Even with the kind of preferential treatment for SEZs

discussed above, due to poor grid conditions and unavailability of sufficient power, even these companies undergo scheduled and unscheduled power cuts These power cuts, especially the

unscheduled power cuts are a huge problem as most of the

equipment required to run the IT business depends on electricity The Tamil Nadu state government for example had to resort to up

to 20% - 40% peak hour power cuts for industrial consumers for the past 4-6 years38 Apart from the scheduled power cuts as the one mentioned above, there could be unscheduled power cuts as well due to other aspects such as failure of transformers, failures in generation etc The intermittent nature of the power cuts make it difficult to plan and budget for backup strategies

There is no short term solution in sight to improve the

situation Most of the southern states are dependent on fossil fuel based power stations Even though Wind energy in Tamil Nadu and Hydo electric energy in Karnataka have a big presence in these states, the demand vs generation gap keeps increasing The recent development of Southern Grid getting connected to the central grid would improve the situation39 However the gap is too huge for the power cuts to be eliminated altogether

2.3.2.2 Impact of rising Electricity costs:

The electricity costs for consumers are heavily subsidized in India Even when the electricity tariffs are revised the state

governments tend to insulate the poor by additional subsidies due

However the Industrial sector power prices continue to increase and won’t be insulated by subsidies The state electricity boards which are responsible for the generation and distribution of electricity are also in poor financial conditions due to the heavy debt they have as

a result of the subsidy regime So to bridge the gap between the revenue and the debt, they resort to regular revision of electricity prices For example, the table below shows the recent revision by Tamil Nadu Electricity board The electricity prices were increased

by 15% across the board

Figure 11 Power Tariff Hike in Tamil Nadu Source: Reconnect Energy 40

It should be noted that this trend of increasing electricity tariffs is not isolated to one state Almost all of the Indian states are pretty much in the same situation In fact the prices shown above is one of the lowest tariffs among the various Indian states Even if we

assume that the cost of fossil fuel does not increase from the

current levels, it is anticipated that the electricity prices will

continue to increase due to the debt situation, inefficiencies etc

40 See Open-Access: A Blog by Reconnect, TNERC Hikes power tariff in the state ,

http://reconnectenergy.com/blog/2014/12/tnerc-hikes-power-tariff-in-the-state/ ,

(25.10.2015)

2.3.2.3 Impact of rising fossil fuel prices:

The IT companies largely tide over the power cuts through the use

of Diesel generators This results in increased running costs due to rising fuel prices and also maintenance costs of generators In

addition, there is a tendency to cut down on certain electrical loads when the generator is in use For example, lifts may not work if there is no grid electricity The cost of Petrol and Diesel have been de-regulated However the government increases the excise duty whenever there is a fall in global crude prices and uses this

additional tax to reduce the fiscal deficit This means that the

consumers are not benefited from the falling crude prices

Figure 12 2014 Thus Far: The Fall of Oil and Its Effects on Indian Fuel Prices, Source: Capital Mind 41

From the Figure 2-10 it can be seen that only a very small

percentage of the falling crude price is passed on to the consumer

So we can safely assume that the expenses for covering any

shortfall in grid electricity with a diesel generator will not come down significantly in the future

41 See Capital Mind, 2014 Thus Far: The Fall of Oil and Its Effects on Indian Fuel Prices,

prices/ , (22.12.2015)

required oil is imported So increase in diesel consumption will

result in an even bigger increase in country’s import bill

2.3.3 Options available for IT Companies to meet power

supply requirements

Industries that are affected by all the above mentioned

problems have only few options available

I Continue the current model of Electricity grid as primary source and Diesel as backup source

II Purchase electricity from 3rd party generators through the Open Access mechanism (OA)

III Invest in Local generation through renewable sources

IV Of course a combination of these three options is also

feasible

2.3.3.1 Using Grid as Primary and Diesel as secondary source

We have already discussed the various challenges in

continuing with the current model in the preceding section (2.3.2)

In short, it is expensive in the long term, has adverse impact on the community and also unreliable

2.3.3.2 Purchasing power through Open Access Mechanism

(OA):

The next option is to purchase electricity from 3rd party

electricity generators The Indian Electricity Act (2003)42 introduced the Open Access Mechanism for the first time opening up the

competition in electricity generation

The open Access Mechanism facilitates the use of the transmission and distribution infrastructure without any limitations provided the associated charges are paid by the generator or the consumer In India the transmission of electricity is controlled by Power Grid

Corporation of India Limited which is a 100% subsidiary of the

Government of India Distribution of electricity is largely controlled

by the state electricity distribution companies (DISCOMs) barring a few private distribution companies in North India So these two

areas are effectively monopolized by the Government agencies

However in Generation, private players are present OA mechanism acts as a bridge between the private generators and the consumers

OA mechanism helps to increase competition in power generation and also gives the consumers a choice

Figure 13 Power Grid Transmission System Source: Green Clean Guide 43 , Author: Shailesh

The various Open Access charges include Transmission charges,

wheeling charges, wheeling loss compensation, surcharge etc

All these charges are largely determined by the state electricity regulatory commissions The inter-state open access regulations are governed by the Central electricity regulation commission

The OA mechanism can also be leveraged when the generator and the consumer are the same entity If used efficiently this can enable the company to become independent of the grid power

2.3.3.2.1 Downsides associated with Open Access

mechanism 44 :

The downsides to Open Access are that the regulations

governing the level of Open Access differ from state to state It may

be possible in one state and may not be possible in another state Also, even though the minimum requirement is 1MW only for

leveraging the Open Access mechanism, the generators prefer to sell electricity in at least in 10s of megawatts in a single contract

So this is more suitable for heavy industries and may not be

suitable for Software companies depending on their consumption requirement However due to the changing regulations in this area,

it would be worthwhile to evaluate applicability of this option

depending on the location and the existing regulations at that time

2.3.3.3 Investing in Renewable energy power generation

The next option is to invest in renewable energy generation Here the companies have few options They can either invest in local generation and consumption setup or they can also opt for remote generation (either themselves or purchase from 3rd party) and then combine it with the Open Access mechanism to transmit the power to the consuming location However with the later, they may incur Transmission and Distribution losses which can be up to 23% or more depending on the location

44 See Energy Next, Open Access: Advantage or Bottleneck ? ,

http://www.energynext.in/open-accessadvantage-bottleneck/ , (30.10.2015)

The past few years have been conducive for private investment in renewable energy generation and the companies will be able to take advantages of some of the incentives provided by the Government

of India Many of the states also have introduced Feed-In-Tariffs for renewable energy

2.3.3.3.1 Possible benefits in adopting renewable energy:

By opting to invest in renewable energy generation, the

Information technology companies would be able to:

 Reduce their dependency on unreliable grid electricity

 Reduce their fossil fuel usage, thereby reducing

 operating

 costs and maintenance cost of diesel generators

 Reduce their carbon footprint

 Fulfill their Renewable purchase obligations if any

2.4 Selection of suitable renewable energy source for IT

companies:

If the company decides to purchase renewable energy from a 3rd party power generator, it does not really matter which

technology is used to generate the electricity The only

consideration in that case would be the cost of electricity and the reliability offered by the power producer The other aspect to

consider would be the transmission and line losses But the

consumer would be billed based on the consumer side on-premise energy meter and not on the basis of source side meter If the

company decides to go for local captive generation, the company has quite a few options of Renewable energy source for captive generation Indian renewable industry has a strong presence of Hydro electric energy, Biomass, Wind energy, Geo thermal energy, Solar thermal and Solar PV Out of all the possible renewable energy sources, Solar PV and Solar Thermal are most suitable for the IT companies because of the following reasons:

 Solar PV and Solar thermal setup can be integrated in the existing roof top without the need for significant changes

 South India has more than 300 days of good solar radiation So it is much more reliable than Wind energy

 Availability of Solar energy has a higher coincidence with the regular office hours of the IT companies

 Solar projects take relatively less time to setup

 Integrating the plant on the roof top allows the

companies to get a better return on their building investment

 Other options such as Wind, Biomass, hydro etc have specific location based requirement which cannot be guaranteed in the same area as the IT companies

 Incentives available for Solar projects is better than other renewable energy

 It is relatively easy to scale up the Solar deployment as and when required

 Problems associated with other technologies such as aesthetics (Wind), smell (Biomass) etc are avoided with Solar energy

 Solar projects have relatively moderate capex and nearly zero opex

Both Solar Thermal and Solar PV can be used to generate

Electricity The other important form of energy required by IT

companies is Cooling/ Air conditioning In a typical Information technology company HVAC cooling contributes to significant

percentage of energy consumption Figure 2-12 shows the typical consumption of power by various different components in a data center It is clear from the pie chart that the consumption vy HVAC

is a significant percentage

Figure 14 Typical breakdown of the data center energy consumption, Source: Electronics Cooling , Issue: December 2010 45

Most of the companies use grid electricity and Diesel generators (during the absence of Grid electricity) to run the HVAC systems There are other possible but not so popular alternative methods such as Solar Thermal to run HVAC Systems Government of India

is taking steps to popularize alternative methods of cooling by

offering incentives and also by sponsoring R&D projects in this area

2.4.1 Review of Solar thermal energy based models

2.4.1.1 Solar Thermal Air conditioning options:

Solar thermal Air conditioning can be a good fit for

Information Technology companies as it can offset some of the Grid electricity costs or Diesel Generator usage Even though this

alternative method of cooling has been available for a while,

commercial solutions are not prevalent in the industry

Solar thermal assisted cooling solution based on Vapor Absorption Machine (VAM) is deployed in India as a proof of concept project The Vapor Absorption Machine is powered by large parabolic ARUN dish/linear Fresnel solar thermal system Another novel system based on flat panel micro-concentrator and Absorption Chillers is deployed in Abu Dhabi

45 See Electronics Cooling, Energy Consumption of Information Technology Data Centers by Madhusudan Iyengar and Roger Schmidt, http://tinyurl.com/ElectronicsCooling , (1.11.2015)

Due to less space requirements, the micro concentrator based

systems might be suitable for IT companies who will be able to integrate it on their roof tops

2.4.1.1.1 Solar Assisted Cooling using VAM and Arun Dish:

ARUN dishes are large Solar Concentrator dishes developed at Clique Developments Pvt Ltd with sponsorship from Ministry of Non-Conventional Energy Sources (MNES)46 The schematic diagram

of the Solar Assisted cooling system using ARUN Dishes is shown in Figure 2-13 below

Figure 15 Solar Assisted Cooling using ARUN dish, Source: CliqueSolar 47

In this model, the Solar energy is harvested through the ARUN dishes and used to heat the water which in turn runs the 50 TR (about 175 kw) Vapor Absorption Machine (VAM) The Vapor

Absorption Machine requires pressurized hot water at 180o C for optimum operating conditions

Nitrogen cylinders connected to the expansion tank are used to pressurize the water to 15 bar This results in the cooling of the Office Room indicated in the diagram above The return

temperature of the hot water is at 160o C The “Global Environment Facility Project document” published by United Nations Development Programme (UNDP) and Ministry of Non-Conventional Energy

Sources (MNES) indicates that the simple payback for ARUN

Concentrated Solar Heating systems at furnace oil pricing of INR 36 per litre was calculated to be 4-8 years48

2.4.1.1.2 Solar Cooling using Micro-Concentrators and

Absorption Chillers:

Chromasun, one of the commercial/industrial Solar building solutions provider has developed Micro Concentrators that can be easily integrated on the rooftop due to its light weight and low

profile This system uses a 25x Fresnel reflector and generates up to 220oC The schematic diagram of this system is shown below:

Figure 16 Advanced Solar Air conditioning Technology in Arab Emirates, Source: RAC Magazine 49

Cost wise, Micro concentrators are cheaper when compared to the Parabolic Trough or the Linear Fresnel

48 See UNDP, Global Environment Facility Project Document,

http://www.undp.org/content/dam/india/docs/market_development_and_promotion_of_so lar_concentrators_based_project_document.pdf , (1.11.2015)

49 See RAC Magazine, Advanced solar air conditioning technology in Arab Emirates by Julian Milnes, http://www.racplus.com/news/advanced-solar-air-conditioning-technology-in-arab- emirates/8609581.fullarticle , (1.11.2015)

There is also a 30% capital subsidy available from the

Ministry of New and Renewable Energy (MNRE) for Solar Thermal cooling solutions50 In addition to the capital subsidy the project developer would be able to avail Accelerated depreciation of 80% in the first year and the remaining 20% in the following year So

comparatively Solar thermal has a better incentive structure from the government

2.4.2 Recommended Solar Technology suitable for ICT

companies:

Even though both these novel Solar thermal solutions have been installed commercially, the lack of wide spread availability, lack of sufficient supply, unreliable after sales support etc are

important considerations before making the decision to go with one

of these technologies or other similar Solar thermal technologies Also, the simple payback period of 4-8 years even including the capital subsidy and Accelerated depreciation, does not impress potential customers Lack of accurate information on investment vs benefit does not give enough confidence for the customers The document “Renewables beyond Electricity – Solar air conditioning & Desalination in India” published by WWF-India and CEEW51 (Council

on Energy Environment and Water) outlines the potential market opportunity in this space The author concurs with the report that better technological improvements and better policy framework are needed before Solar thermal cooling is implemented seriously in the commercial/industrial scenarios In contrast, Solar PV is widely implemented in the industrial and domestic segments It is a proven technology and there are lots of consultants and developers

available in the market who can help with the implementation

Between these two technologies, Solar PV is more suitable for

electricity generation due to lower Levelized cost of energy

compared to Solar Thermal According to the November 2013 study published by Fraunhofer Institute for Solar energy Systems ISE, LCOE for Solar PV is nearly half of Solar Thermal52 Due to lower LCOE and reduced land requirements, at present Solar PV is more suitable for Urban areas where the IT companies are generally located.The costs of Solar panels are coming down and in many parts of India the Solar electricity cost is nearly on par with the grid electricity In fact there are consumers who are willing to

generate/buy reliable electricity at a price slightly higher than Grid electricity if they can get reliable power supply So it is clear that Solar PV is a clear choice for the IT companies till the Solar thermal industry matures in the future

India

2.5.1 Notable Solar PV projects in South India:

Companies around India have already begun to generate electricity for their own consumption reducing their dependence on the unreliable grid electricity This enables them to run their

business much more efficient and without much down time Also this results in long term savings as they reduce/do away with

dependence on Diesel whose price fluctuates resulting in

unexpected economic impact for the companies We already have quite a few good examples of such companies in South India in Information Technology and also even in manufacturing sector which generally has heavy electrical load equipment Two of these examples are summarized below to give an overview of how Solar

PV plants are being utilized in these sectors

52 FRAUNHOFER INSTITUT FOR SOLAR ENERGY SYSTEMS ISE (Nov 2013): Levelized Cost of Electricity Renewable energy technologies, Freiburg:

und-konzeptpapiere/study-levelized-cost-of-electricity-renewable-energies.pdf , p.31 , (2.11.2015)

https://www.ise.fraunhofer.de/en/publications/veroeffentlichungen-pdf-dateien-en/studien-2.5.1.1 Solar PV Project Case Study 1 - Murugan Textiles 53 :

Murugan textiles is the largest Power loom producer in India They have been using Renewable energy for their consumption for quite a while now They are using Grid energy as backup energy and Renewable energy as their primary source of energy Their renewable energy generation is a combination of Wind energy and Solar energy Solar PV contributes about 25% of their usage

through the recently setup 2MW rooftop plant and the rest comes from their Wind energy installations This is one of the biggest roof top solar PV installations in South India

Figure 17 Solar PV Rooftop System implemented at Murugan Textiles Source: TATA Power Solar

Rooftop Solar PV Summary:

Goal : Operate Open-end Spinning machines with Solar energy

Projected Generation : 3 million KWh per annum

Type : Captive consumption, Grid integrated through 11KV dedicated Feeder Line

53 See TATA Power Solar, Murugan Textiles - the first power loom producer to use 100% renewable energy,

http://www.tatapowersolar.com/download_pdf.php?file=images/module/case_study/Murug an_Textiles - Case_Study.pdf , (2.12.2015)