At the New York climate action summit, PM Modi vowed to double the renewables target to 450 GW. Experts say India’s earlier target of 175 GW by 2022 itself looked far from achievable, and the new one cannot materialise without factoring in large hydro in the renewable energy mix. But with industry ignoring new solar and wind project auctions over policy issues, including the mandatory feature of using domestic solar equipment, will the high-profile target be met?
Experts say the government has found the answer in large hydro projects. Recently, the government reclassified hydro projects of over 25GW capacity as renewables, which shot up the share of hydro seven times its previous share in the renewables energy mix. Earlier, wind energy stood at 50% of all renewable energy capacity, which has now fallen to only 29.3%. Solar energy’s share will fall from 34.68% to 21.61%. The hydro sector, however, will see its share jump from just over 6% to over 41%. With the addition of large hydro to the clean energy segment, India is poised to have 225 GW of renewable energy by 2022.
However, critics say this doesn’t involve creating new resources of renewable power, but just reclassifying the existing resources. They also point out that hydro projects bring with them contentious issues of resettlement of the affected population and infrastructure development, many projects have been stuck and delayed because of that.
Government is simultaneously planning to streamline the issues in the ailing solar and wind sector. The PM himself has stepped in to help ease the credit flow from banks, who are wary of lending money in the face of tariffs too low to sustain profits. The renewable energy ministry is also planning to introduce a standard bidding document and power-purchase agreement (PPA) for projects. With so much at stake, only the next few quarters will reveal how close India has inched to its new target.
Scramble to meet new 450 GW target: PMO wants easy credit for green energy firms
India’s Prime Minister Narendra Modi is leaving nothing to chance after he promised the world a fresh renewables target for India (450GW by 2020). His office has asked government think-tank NITI Aayog to assess the situation to improve financing for renewable energy projects after big government banks such as the State Bank of India (SBI) refused money to developers who have committed to sell power at less than Rs3 per unit, reported Mint.
With tariffs of solar (₹ 2.44) and wind (₹ 2.43 per unit) energy projects at a record low, banks are wary of parting with money to fund projects that can barely make profits. Niti Aayog is yet to resolve the issue of payment defaults of state distribution companies (discoms). Their payments to renewable energy companies have been pending from as long as 15 months.
Easy on energy companies, tough on buyers? New norms to meet higher renewables target
Facing a slowdown in the solar and wind energy sectors over issues of payment dues, India is planning to introduce a standard power-purchase agreement (PPA) for projects. Officials say states would face tough penalties for defaults. Payment through a letter of credit-type system is on the cards. To sort out land-acquisition issues, the ministry plans to change the project-award system, switching the “plug-and-play” model.
According to a Business Standard report, the Centre will acquire the land for wind projects, create special-purpose vehicles (SPVs) through state-owned companies such as SECI, NTPC, NHPC, PFC, and REC. The land will then be allotted to private companies bidding for projects. Experts point out that the government is following the same route it took for ultra-mega thermal power projects (UMPP). Of the 16 UMPPs planned, four were handed to private companies, but only two are functional.
India has committed $90 billion in renewable energy investment so far: UNEP
India committed $90 billion to the renewable energy sector by the end of the first half of this year, making it one of the leading investors in green energy, according to United Nations Environment Programme (UNEP). The report, titled ‘Global Trends in Renewable Energy Investment 2019’ highlights a ranking of countries, including India, based on their renewable energy investments between 2010 and the first half of 2019. China still leads the list committing $758 billion between 2010 and the first half of 2019, with the U.S. second with $356 billion and Japan third with $202 billion.
India’s million dollar solar gift to UN ‘not enough’ to fight climate change
India presented the UN a million dollar gift: Gandhi Solar Park, comprising 193 solar panels each representing a UN member state. The panels have been installed on the rooftop of the UN building in New York. Expected to produce 86,244 kilowatt-hours per year (kWh/year), the panels will cut down the UN’s CO2 emissions, currently equivalent to that released by 30,246 kg of burning coal. The panels can reach a maximum 50 kilowatts of power generation. India’s gift to the UN was received well, but its role in fighting climate change wasn’t. Experts said India produces solar and wind energy, one of the cheapest sources of renewable power, but it continues to permit new coal plants. Greenpeace’s Asish Fernandes said, “It’s time for the government to heed the secretary-general’s call to stop building new coal plants by 2020.”
India sets new guidelines to address disputes between power companies and SECI, NTPC
Centre released new norms to resolve disputes between solar and wind energy companies and government implementing agencies Solar Energy Corporation of India (SECI) or the National Thermal Power Corporation (NTPC). The dispute resolution mechanism (DRM) will be applicable to projects being implemented through SECl or NTPC. The mechanism will provide a secretariat for the dispute resolution committee (DRC), headed by SECI or NTPC officer not below the rank of general manager, who will function as the secretary of the DRC. All appeals against the decisions given by SECI or NTPC will be addressed to the secretary of the DRC. Power developers (companies) will have to first contact SECI or NTPC before submitting the application to the DRC. If they directly approach the committee, their application will get rejected, reported Mercom.
Basic Customs duty proposed to boost domestic solar imports
As domestic solar equipment makers continue to battle cheaper solar imports, ministry of renewable energy has requested the finance ministry to impose a basic Customs duty (BCD) on solar imports from April 2021. The proposed duties range from 10% from the first year up to 30%, in the third year, to boost domestic manufacturing. The ministry wants wafer, EVA, glass, silver, paste, frames, and structures, things used to manufacture modules in India, to be kept out of duty slabs until December 31, 2023. Earlier, a 25% safeguard duty on solar cell imports from China and Malaysia for three years was proposed by Directorate General of Trade Remedies.
Meanwhile, China’s Trina Solar crossed 4,000 Megawatt of solar modules supply in India. The company says India is globally a major solar market.
Google signs new renewable deals, “biggest purchase by a corporate in history”
Google signed 18 new energy deals amounting 1,600-megawatt (MW). Google CEO Sundar Pichai said, “the biggest corporate purchase of green energy in history”, will increase the company’s worldwide portfolio of wind and solar agreements by more than 40%, to 5,500 MW, equivalent to the capacity of a million solar rooftops. This is expected to spur installation of over $2 billion in new energy infrastructure, including millions of solar panels and hundreds of wind turbines spread across three continents.