THE BRIDGE TO INDIA BLOG
In a US-India joint statement released yesterday (26th January 2015), the US reiterated its intent to support India’s proposed targets on clean energy and climate change. The statement includes seven measures: expanding Partnership to Advance Clean Energy Research (PACE-R), expanding Partnership to Advance Clean Energy Deployment (PACE-D), accelerating clean energy finance, launching air quality cooperation, initiating climate resilience tool development, demonstrating clean energy and climate Initiatives on the ground and concluding MOU on energy security, clean energy and climate change (refer).
- Based on the recent announcements, projections for overseas funding commitments for Indian solar projects and green energy corridors has gone above USD 8 billion
- The Indian government expects significant international support, especially from the US, in meeting the 100 GW of solar by 2022
- The Indian government’s emphasis on simplifying rules and making it easier to conduct business in India is the correct policy path to pursue
In 2011, the per capita electricity consumption of Patna, the capital city of Bihar, was only 601 kWh and even though it is a capital of one of India’s largest states, this is 23% lower than the national average of 780 kWh and significantly lower than the global average of 3,044 kWh. This shows that the city is still very far from providing enough power to its population.
- BRIDGE TO INDIA’s modelling revealed that Patna has a geographical potential to install around 759 MW of rooftop solar
- Analysts at BRIDGE TO INDIA have envisaged a road map for Patna to help meet its energy demands by adopting solar in a phased manner
- The city could add 277 MW by 2025 without significant technical challenges, storage requirements or dedicated grid investments. Thus, solar could meet about 20% of the city’s power requirement
Ever since the new government was sworn in, India has been making all the right noises about its ambitions for solar power. Both Prime Minister Modi, and the Minister for New and Renewable Energy, Mr. Goyal, seem determined to achieve an ambitious target of 100 GW by 2020. After the headline items have been absorbed and expectations have risen, it is now time for delivery. They have their work cut out for them. It cannot be a straightforward process as the goal is so ambitious, the market environment complex and the technologies changing. However, it needs to be much more thought through than it is at present.
- The Indian government’s roadmap to achieving 100 GW in 5 years shows quick initial ramp up
- Plans to add 20 GW by 2018 in the rooftop solar segment needs substantial policy push
- Government’s ambitious solar target requires an expanded and improved institutional infrastructure to support a complex, new policy process: an excellently staffed “Central New Energy Command”
The revised guidelines have been issued for implementation of tranche-I of batch II under phase II of NSM for 3,000 MW (see here). The development of the solar park in Andhra Pradesh is delayed due to land acquisition challenges. The delay has hampered the plan of Ministry of New and Renewable Energy (MNRE) to complete project allocation by March 2015. With the increased targets and strict deadlines, the bureaucratic machinery underneath is finding it difficult to keep up and issues with the implementation of solar parks seem far from being resolved. The salient changes in the guidelines are:
- Projects can be set up outside of the solar park, too
- The minimum project size has been reduced from 50 MW to 10 MW to encourage more competition
- Some limited mitigation has been provided for development risk of solar park. But relief is provided only up to three months and there is no provision of compensation, liquidated damages or deemed generation for developers due to such delays. BRIDGE TO INDIA is of the opinion that the provision of extra time should not be limited and must be extended in line with delays in implementation of solar parks
- The maximum capacity for a single bidder has been capped at 300 MW in a single lot
Since the beginning of India’s push for solar energy and the launch of the National Solar Mission in 2009, two segments of the solar market have been in focus for both corporations and national and state governments – utility scale and distributed segments. The former’s realizable potential has been estimated by BRIDGE TO INDIA at 53-69 GW by 2024 and the latter at 57-76 GW However, only the utility scale segment has been able to establish a strong foothold in India’s energy sector. As of October 2014, 90% of approximately 3,000 MW of solar PV installations are attributed to the utility scale solar segment. The distributed segment, on the other hand, has contributed less than 10%, totaling a mere 285 MWFor the distributed markets to grow faster, a practical solution is needed.
- Consumer awareness: consumer need to be educated to understand the benefits and limitations of solar
- Decision making tools: Consumers also need the right tools to assess and choose the right solar solutions for themselves
- BRIDGE TO INDIA has developed IndiaGoesSolar.com (IGS) as a comprehensive solution for consumers who are thinking of going solar
At the ongoing Vibrant Gujarat Summit 2015, Adani Enterprises and SunEdison have announced a partnership to explore building an integrated solar manufacturing facility worth USD 4 billion at Mudra, Gujarat (refer).
- This partnership to culminate into the biggest solar manufacturing related announcement till date
- These manufacturing decisions are driven by compelling fundamentals of cost of manufacturing, domestic consumption and export
- If new domestic capacities are globally competitive, there is enough room for such capacities to be set up
On the very first day of 2015, the Ministry of New and Renewable Energy (MNRE) has notified proposed changes to the rooftop solar subsidy (refer). The two major changes are: reduction of subsidies from 30% to 15% and a lower priority for subsidy disbursement to industrial and commercial consumers.
- The funding available for subsidy mechanism does not nearly meet demand and that this makes it actually counterproductive
- Just like the water heater subsidies, the subsidies for industrial and commercial customers could have simply been revoked altogether
- So far less than 15% of the installed rooftop solar capacity has made use of the subsidy
The Indian solar market went through its share of ups and downs in 2014. Last week, we tried to summarize key events of the year and their impact on the market (refer). In this newsletter, we applaud key stakeholders and initiatives that, in our opinion, were standout contributors to the growth of the Indian solar market in 2014.
- BRIDGE TO INDIA’s choice for ‘Policy decision of the year – 2014’: revocation of anti-dumping duties
- Our choice for ‘Best performing state of the year – 2014’: Andhra Pradesh
- Our choice for ‘Person of the year – 2014’: Piyush Goyal, Minister for New and Renewable Energy