Union Budget: India announces ₹19,500-cr PLI for solar manufacturing, green bonds

Last fortnight the government in the Union budget announced an additional allocation of ₹19,500 crore for Production Linked Incentive (PLI) for manufacture of high efficiency solar modules to fully integrated manufacturing units that can transition from polysilicon to solar PV modules, HT reported. This is expected to boost domestic manufacturing for implementation of 280 GW of installed solar capacity by 2030.

The government also announced sovereign Green Bonds under the government’s overall market borrowings in 2022-23, which will be used to mobilise resources for green or climate-friendly infrastructure. The money from the green bonds will be deployed in public sector projects that help in reducing the carbon intensity of the economy, she said. 

Green bonds are one of the most prevalent bond instruments to fund renewable energy infrastructure. 

ACME-Scatec put 900 MW solar project on hold over upcoming 40% import duty

The impending 40% import duty from April 1 and supply chain bottlenecks led India’s ACME and Norwegian company Scatec to put the 900 MW, $400 million, solar energy plant in Rajasthan on hold. Last year, Scatec entered into partnership with ACME to build the plant in Rajasthan under a 25-year power purchase agreement with Solar Energy Corporation of India (SECI), Reuters reported. The plant was expected to be completed in 2022, but building work had not yet begun.

India plans to levy Customs duties on solar modules and solar cells to cut its dependence on China-made imports and boost local manufacturing 

DISCOM Terminating PPAs unilaterally not in public interest: Supreme Court

In an Andhra Pradesh renewable energy project case, India’s Supreme Court said it was not in public interest for a state DISCOM to terminate an existing Power Purchase Agreement unilaterally. The top court backed the verdict passed by Appellate Tribunal for Electricity, which had directed the state commission to pass an order to determine capital cost and approve the restated PPAas requested by solar developer Hinduja National Power Corporation. 

House panel suggests setting up of green banks to boost RE

A Parliamentary panel asked the government to set up green banks as one of the innovative tools to deal with financial constraints in the renewable energy sector. The panel also recommended that the government explore the possibility of prescribing Renewable Finance Obligation on the lines of Renewable Purchase Obligation (RPO) for banks and financial institutions. 

The panel also suggested the use of alternative funding avenues like Infrastructure Development Fund (IDF), Infrastructure Investment Trusts (InVITs) Alternate Investment Funds, Green/Masala Bonds, crowdfunding, etc, for the RE sector. The panel noted that India would need an annual investment of Rs1.5-2 lakh crore in the RE sector, but the estimated investment for the past few years has been around Rs75,000 crore only.

China shifts focus to Gobi desert for fresh renewables push

China’s new plans for expansion of renewable energy will focus on the Gobi and various other desert regions of the country. In a fresh policy record, Chinese energy regulators stated that the country will aim to double its current 600GW capacity of solar and wind energy by 2030. The record also states that by the end of the decade, a system that ensures all new energy needs are met by renewables will be established. The National Energy Administration (NEA) also plans to expand financing channels for renewable projects, and roll out a green certification program to incentivize investments. While coal use in China is set to rise until 2025, the policy note reiterates the country’s plan to wind up unabated and inefficient coal capacity, while increasing support for carbon capture and storage space at thermal plants.

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