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Clean power is our corporate commitment to society

EM NEWS BUREAU ,  Saturday, December 17, 2011, 17:18 Hrs  [IST]

Navratan Katariya— Navratan Katariya, Associate Vice President - Solar, Sterling and Wilson Ltd, Associates of Shapoorji & Pallonji Co Ltd

Sterling and Wilson Ltd, India's leading MEP (mechanical, electrical and plumbing) services company with an eight-decade standing, entered the solar power business in 2010. In just one year, the solar vertical is on the verge of completing 17 EPC projects aggregating 75 mw. Navratan Katariya takes us through this newly-founded business and gives valuable insights into critical issues in the solar power EPC contracting space. Katariya explains how solar EPC contracting can be made more efficient, resulting in a far more mature Indian business model.

Tell us about the different services that Sterling and Wilson offers in the field of solar power generation plants.
We currently offer turnkey EPC services for solar photovoltaic projects, starting at 1 mw. Except for one off-grid village electrification project aggregating 1.2 mw, all others are gridconnected systems, feeding power into the utility. We are also now ready for taking up power evacuation (electrical part) of solar thermal power plants.

India is relatively new to the culture of grid-connected mega wattsized plants. What are the typical challenges that one encounters during the setting up of such plants?
There are several challenges out of which, time constraint is prominent. Usually the decisions are made at a very late stage, leaving limited time for a thorough engineering and procurement of the major areas of EPC. Custom-made equipment especially high voltage multi-winding transformers and switchgear, and other components like modules, inverters, string monitoring combiner boxes and clamps, have long lead times. The decision making sometimes get delayed due to financial closure issues or owners directly shopping for the high priced items, even as they are going through the learning process.

The absence of data in the pre-bid stage can also prove debilitating. The data in question is that on soil conditions of project areas and also long-term time series of meteorological conditions.

Besides, engineering design considerations are yet to mature in the Indian solar industry. And of course, there is heavy pressure on the pricing front. While these projects demand a high reliability and system operation for 25 years, competition in price may drive down the quality or engineering considerations.

There is also the issue of performances-related liabilities coming in the form of Performance Bank Guarantees (PBG) asked by owners/bankers. They do not have much experience with solar plants as of now so their expectations may be considered valid in spite of the fact that solar PV projects have been in operation worldwide for many years now.

How does this affect solar EPC companies?
With unmeasured met data and component quality beaten by project price pressure, EPC companies are pushed against the corner, and unfortunately not backed by the equipment vendors for these PBGs. EPC companies thus take high level of risks due to products that they do not manufacture and their balance sheets will limit a high level of market penetration. This is feared to hinder growth but we hope the business model will mature as it has in Europe.

From the construction perspective, are there major differences between the two major variants of solar plants — photovoltaic and thermal?
Yes, the two are quite different. PV projects primarily have DC & AC systems, and light foundations and structures that are generally fixed. The experience in Indian electrical EPC companies for AC system has been good enough to ramp up capabilities for 1000V DC systems. Generally these are easy to design and construct and we have ample worldwide experience. Absence of moving parts, unless there are trackers for the module structures, is another major difference.

On the other hand, solar thermal projects are larger plants, have complex moving trackers, plumbing and rotating turbines and alternators. The good news here is that India has vast thermal plant experience!

India's National Solar Mission envisages a huge 1 GW of gridconnected solar power installations by 2013. How do you see this driving Sterling and Wilson's solar power EPC business?
Solar power generation is an extension of our business and which utilizes the skills and experience built in various disciplines over the years. We consider bringing clean power technologies to the country and abroad (through our Middle East office) as part of our corporate commitment to the society beyond the general business considerations.

We expect to be a major player in this industry. Sterling and Wilson is currently executing its 17th project-and that too in a short span of just one and a half years. Sterling and Wilson is committed to its customers in terms of quality and timely completion of projects.

We understand that a large number of European solar equipment and contracting companies are entering India. Do you therefore see the solar power EPC business getting more competitive in the years ahead?
On the contrary, we feel this market requires expertise available from anywhere on the planet and there is a room for long term committed players. I must say that we have many miles to go towards innovation in the physics part of solar cells, and to some extent in power electronics engineering, to bring the right efficiency-cost solutions.

We also need large scale, vertically integrated equipment technologies and manufacturing bases for both thin film modules and inverters. The happy news here is that the National Mission targets have prompted industries—slowly but cautiously—to invest in the supply side.

In the business of contracting, local EPC companies have a major role to play. Needless to mention that a good-quality and reliable system requires multifarious skills and project management skills built over years of on-ground experience. This is precisely why customers prefer to turn to companies like Sterling and Wilson for their requirements.

Tell us about solar projects commissioned by Sterling and Wilson so far. We hear of a large project in Gujarat.
Our journey started with the commissioning of a 1-mw project in New Delhi in November last year. We started with a rather limited scope-that of module installation on a two-storied high, multi-acre steel platform. Subsequently, we built our capacity and added larger scope of work to our contracts. Every project that we took after that was good learning and helped build robust engineering/construction skills and experience. Four projects aggregating to 6 mw spanning across the country have already been commissioned and connected to the grid.

We are now working on 13 live solar projects with crystalline to thin film, various brands of inverters, across the country Rajasthan, Gujarat, Tamil Nadu, Andhra Pradesh, Maharashtra, Uttar Pradesh, Madhya Pradesh, Haryana, Punjab, etc. With varied site conditions like soil, we have been using different types of foundation methods, including the ramming metal type. Ramming, incidentally, gives faster execution output, and is often done in Europe.

Yes, we have a 25-mw plant under execution at Surel, some 130km west of Ahmedabad in Gujarat. This project has a combination of two types of foundations, modules etc.

Tell us about skilled manpower at Sterling and Wilson Solar.
Sterling and Wilson does have a large skilled employee base, highlevel engineering skills and resource mobilization capabilities. We also have a countrywide network. All this ensures we deliver only the best to our customers. Our customer profile is diverse, comprising leading financial service providers, traditional power companies, automobile manufacturers, IT services companies, oil & gas exploration players, telecom companies, infrastructure players, etc.

We observe that the capacity of proposed grid-connected solar plants in India is progressively getting bigger. What challenges do you generally foresee from the EPC point of view?
Increasing capacities do bring in advantages from the engineering and cost perspective. However, the policy decision in giving wider and equal opportunities of investment, which is currently capped to a total of few hundred megawatts, needs to be looked at. A solar park or a consortium approach that provides access to common infrastructure and O&M will definitely help in the course of time.

We believe that committed EPC players would invest in engineering, machinery and methods; and that should be beneficial to the owners in terms of reliability of the system, speed of execution, and cost. As capacities increase, checks and counter-checks shall be called for to ensure all players enjoy a level-playing field.

Prices of solar power equipment have been on a decline over the recent past, bringing down the capital costs of solar PV plants. Do you think that there is scope to even reduce construction costs through better techniques and practices?
Indeed one benefits from economies of scale in terms of construction cost with higher mechanization, for instance, and common infrastructural requirements. Also it would be good to see the per-mw cost in engineering and procurement coming down. We believe good system engineering and planning is as important as buying the right quality of equipment- both capital and construction. New techniques of construction will need to be tried and experienced in local conditions and that would require time and effort before it is brought to practice.

We need to watch for the supply-demand influenced prices versus sustainable and healthy prices of major equipment like modules, inverters etc. There is a definite role of local manufacturing of equipment in terms of price and better serviceability; and availability of trained manpower. We welcome local technology and manufacturing, and vertical integrations, just like the Chinese industry did.

How do you rate the prospects of the O&M business for solar plants in the years ahead? How can India shape up its solar O&M industry?
O&M is crucial but India has currently has limited experience for such mw-sized plants. To give you an example, even apparently simple tasks like cleaning the modules may need intensive studies and experience. The harsh-free sand rubbing against glass would affect the glass texture and so the reflectivity. Similarly, water cleaning in extended sandstorm periods actually may have the sand sticking back on the wet surface!

An important area of learning will be the inverters, string combiner boxes, and SCADA. Such training should be part of the mandatory requirements for O&M operations. This will ensure maturity of the O&M sector.

We have engineers who have been trained abroad by some inverter companies and we now need only supervision during inverter commissioning. (Warranty clauses require vendor representatives to sign off.) We need to also look at an expected high level of manpower attrition for a remotely-located solar plant. So, a continuous training program will need to be run by O&M companies. O&M companies will need to build expertise across different types of module and inverter brands. O&M personnel skill could come at a good price to the owner.

Tell us how Sterling and Wilson's solar business benefits from the tremendous collective expertise and experience of other divisions of the group. What key milestones do you see solar business attaining in the medium term?
We have been in the business of electricals for over eight decades. The learning of DC electrics has been relatively easy and quick. Inhouse capabilities of design & manufacture/integration of various balance of system (BoS) components, like GI mounting structures, LT/HT Panels, SCADA, HVAC, CCTV, fire system and electrical O&M have been of direct help to solar projects. Furthermore, the over eight-decade long expertise of our parent company Shapoorji Pallonji is indeed helpful.

Apart from ground-mounted mw-level plants, we foresee the roof top program to substantially add to the Indian solar PV portfolio. Our electrical services in buildings: be it large industrial or commercial complexes, will be of immediate assistance to such solar programs.

We shall be closing 2011 at 75 mw with 17 projects completed to our clients' full satisfaction, and we hope to have successfully executed 500 mw in the next three years. Sterling and Wilson will also be adding solar thermal and a host of other services and offerings to its product portfolio, in the days ahead.
 
                 
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