THE BRIDGE TO INDIA BLOG
Utilities across the world have so far been resisting the imminent distributed solar wave. These companies are at a cross road between business-as-usual and an opportunity to grab the rising sun. They are perfectly positioned to adopt distributed solar PV as a new business avenue. The question is, will they adapt?
- Most utilities are resisting distributed solar PV since it reduces the demand on the utilities, resulting in a loss of revenue. Utilities often tout the excuse of grid instability to prevent the proliferation of distributed PV.
- The key question is how much distributed solar PV can the grid take? Current regulations on grid penetration are arbitrary and need to be revisited.
- Distributed solar PV can be a win-win for utilities, consumers and policy makers, provided utilities recognize this.
The first solar policy in India was released by the Bhartiya Janata Party (BJP) government in the state of Gujarat in 2009. This was soon followed by a much more comprehensive National Solar Mission at the central government level by the United Progressive Alliance (UPA) headed by the Indian National Congress (INC). Both these policies have laid the foundation for the creation of a solar power ecosystem in the country. Today, apart from the NSM at the central government level, 11 Indian states have a solar policy in place (refer). With the general elections underway, BRIDGE TO INDIA is trying to assess which political disposition is more favorable to the solar industry in the country (refer to our first blog of the subject). Today, we are trying to evaluate the experience until now to judge the various state policies based on the political dispensation responsible for it.
- On an average, BJP ruled states lead in both signing the PPAs and execution of projects followed by INC and then the regional parties
- The Indian National Congress has to be credited with introducing NSM at the central government level
- There is a need to improve on the mission and make it more ambitious in terms of its target
India has begun voting for a new government today. This largest ever democratic exercise will involve up to 815m citizens. Energy and renewables have not featured prominently in the campaigns to date. Most political analysts believe that, come May, India’s primary opposition, the Bhartiya Janta Party (BJP), might come into power. As a thought experiment, we assess the likely effect such an outcome would have on the Indian solar market.
- Solar bound to play a large role in India’s solar power sector in the coming years
- The MNRE is considering to expand the target for National Solar Mission to 100 GW by 2027
- Both parties- BJP and the Indian National Congress- are set to help solar grow in India
We have often argued that solar can be India’s future: not just an incremental power source at the fringes of the economy, but a real game changer. We wanted to visualize what the potential really is. Our India Solar Potential map below, is the result.
- 1,000 GW of solar could be built on half the area of the district of Barmer in Rajasthan
- 1,000 GW could generate 1,500 TWh/ year which is around 1.5 times India’s demand
- The map given below shows how India can think big with solar
Weekly Update: NSM domestic content batch of 375 MW caught in crossfire between the developers and manufacturers
National Solar Energy Federation of India (NSEFI), one of the several solar industry associations in India, has written a letter to the Ministry of New and Renewable Energy (MNRE) suggesting that domestic manufacturers do not have adequate capacity to supply the 375 MW of capacity allocations under the domestic content requirement (DCR) category of batch one of phase two of the National Solar Mission (NSM). This is despite the fact that manufacturers had claimed to be able to meet demand before the bidding process.
- NSEFI claims that domestic manufacturers are “unethically” raising module prices now that the bids are over
- Indian manufacturers allege that NSEFI has not consulted with them before sending out the letter
- HR Gupta from IndoSolar has denied any increase in module prices
The April 2014 edition of BRIDGE TO INDIA’s quarterly publication, the India Solar Compass, has been released. Following are some highlights.
• India signs 1,232 MW of PPAs in the first quarter of 2014
• India to add 1,065 MW of solar PV capacity in the next financial year
• India added 89 MW of solar PV capacity in the last quarter, lowest since Q3 2012
India has two choices to make. The first choice is: should it actively develop and follow an energy strategy? Or should it continue to sputter along in an ad-hoc manner, with inefficient private investments into back-up infrastructure and with power deficits that inhibit development? The second choice, if India opts for a strategy, is: what should the strategy be? Should it focus on the centralized, fossil fuel-based model or on a smart-grid, renewable-fueled model?
- India should build an energy infrastructure on fuel sources with a downward cost trajectory – that are locally available
- We are witnessing a period of transformational change in energy. India can leapfrog
- Optimism is more warranted with respect to overcoming the challenges of renewables than the challenges of fossil fuels.
Gujarat has restricted industries in the state from procuring power from outside the state through open access as per news reports. This restricts the choice of private industries in Gujarat to either purchase electricity from the state discoms or via on-site captive power plants. This comes as an unexpected move since Gujarat has been on the forefront of power sector reforms in India.
- Utilities bemoan that private power purchase agreements (PPAs) are rendering generation capacity of up to 2,500 MW idle
- The conflict of interest between DISCOMS and independent power producers has severely limited the uptake of open access in India
- BRIDGE TO INDIA believes that India’s open access mechanism must be made truely ‘open’ to all