24×7 Power for All: Post Rural Electrification Roadmap

In March 2019, India achieved nearly 99% rural electrification status. The electrification scheme also known as Pradhan Mantri Sahaj Bijli Har Ghar Yojana, or Saubhagya electrified more than 45,000 households every day for last 18 months. This showcased India’s commitment towards progress, understanding electricity as one of the basic requirements of life. Considering that more than 68% of people in India live in rural parts of the country, this was a decisive action and the journey from the drawing board to success has given India a very realistic idea of how to lead the country towards wholesome growth.

However, electrification of households do not necessarily mean uninterrupted power supply 24×7, which was targeted to succeed by March 2019. Unfortunately, there is still a major gap between electrification and receiving reliable power supply in major states like- Odisha, Bihar, Jharkhand, Madhya Pradesh, Uttar Pradesh and West Bengal. Therefore, in order to consider 24×7 power for all a reality in the near future, we need to identify hurdles and find solutions.

Continue reading

Global PV Solar Growth Analysis and Scenario in India

China’s policy shift, mega tender cancellations and policies levying taxes and duties on solar industry in India, feed-in-tariff cut in Japan have made 2018 the year of uncertainty for solar. However, surveys suggest that global PV solar installations will see nearly 18% rise in 2019, finally reaching and may be surpassing 100 GW capacity addition. Although, at the end of 2019, we would still be far from ‘0’ emission future, rising PV installation growth and emergence of new markets within developing countries will get us closer to that goal.

Continue reading

Sustainability and Climate Improvement needs Long Term Policies

A blanket of CO2 has enveloped the world. And continues to deteriorate our climate. Frequency of heatwaves has increased, habitats have started to shift, spread of disease, raising sea levels and other not so subtle and often violent changes in the climate are now reality due to growing CO2 emission levels. Daily Global CO2 emission levels now stand at 406.47 parts per million. It is important to note that CO2 emission levels have never risen this high in last 400,000 years. Our fossil fuel usage is the primary reason behind this rise (80% of CO2 emissions come from fossil fuel combustion) that is presenting devastating changes within the environment. Fortunately, now the world is taking initiatives towards reducing the CO2 emission. However, the damage to the climate that we have done through decades of fossil fuel usage cannot be undone instantly; therefore, what the world needs is long term strategies to reduce carbon emission by adopting green energy and reducing fossil fuel usage.

Continue reading

Keeping it cool: The urgent need to control emissions before it’s too late

A recent report by The Centre for Policy Research and International Institute for Applied Systems Analysis has predicted that India’s CO2 emissions from energy generation will nearly double in 2030 from its 2012’s emission figures. Although, this 91-98% increase in CO2 emission is still going to be in line with nationally determined (in Paris Agreement) CO2 emission level; factoring in 2012’s emission figures-2 billion tonnes of CO2, it is safe to say that the rise is considerable.

smoke-3178047_960_720

The Bittersweet Dilemma

The research report showed that recently introduced policies (2015 and beyond) are well in their way to lead India towards a faster than predicted green energy transition, which will shrink coal’s dominating share in India’s energy equation and reduce per capita emissions than today’s global average. In that case, we can come to an understanding that the policy interventions and Government initiatives towards renewable energy (especially solar) growth will have a material impact on reducing India’s future emissions.

The report also shines light on the fact that even if India’s emissions doubled by 2030, it will be lower than China’s equivalent emissions in 2015. Therefore, it can be considered as a progressive environment building up towards a sustainable green future, right?

Well, it is progressive indeed but we also have to understand that although, this is a move towards success, the picture is not very appealing right now. The efforts need to be considerably increased to reach and frankly surpass the goals. It will help us reduce our carbon emissions even more, which is a necessity.

image 1

The Current Scenario

Presently, India is going through terrible shifts in environment behaviour, due to increased CO2 emissions within the country and the world. There are unprecedented spells of hot weather, change in Monsoon bringing issues of droughts and flood, significant fall in crop yield that can destabilize the social, economic structure of the country, adding to the turmoil.

Research has found that areas in north-western India, Jharkhand, Orissa, and Chhattisgarh have seen considerable drop in crop yield and suspected to fall further due to changing climate. As India is dependent on agriculture and about 60% of its agriculture is supported by rain, higher or lower than average rains are affecting the country. Also, rising carbon dioxide levels due to global warming is suspected to shrink down the amount of protein in crops like rice and wheat, which are the primary food source for majority of the population in India. Such conditions are leaving populations at risk of malnutrition, low immunity and raising the risk of diseases affecting the population severely.

India recorded its hottest day in the city of Phalodi, Rajasthan, when the temperature reached 51 degree C and according to a research by MIT in the US, the temperature in India will further increase in coming years.

Coastal cities like Kolkata, Chennai, and Mumbai are also suspected to be affected by sea level rise. Rising sea-level and surges of storm would also impact agriculture, degrade groundwater quality, increasing the risk of contamination in water, and giving rise to diarrhoea and cholera.

Way Forward

With effects of climate change getting dangerous every year, countries like India need to boost efforts at reducing CO2 emissions now, which is an opportunity now through opting renewable  energy transition (mainly solar). We, as a country, should understand that lowering our future CO2 emissions in comparison to industrial giant China’s past emission statistics (its 2015’s emission statistics) is not a win for us now and we need to rectify internal mechanics to support renewable energy growth. It is important to highlight that The Government of India introduced National Clean Energy Fund (NCEF) in 2010-11, as India’s carbon tax, levying duties on coal to fund cleaner energy projects and combat climate change. And in last 6-7 years, India has collected more than Rs 54,000 crore through clean energy cess by levying taxes on coal mined or imported. However, it is important to note that only half of the total collected cess (22,063 Crore) was transferred to NCEF from 2010-2017. From that amount, the investment towards projects were amount INR 17,469 crores from 2011 to 2017, and MNRE’s share from that amount was INR 12,429 Crore. On top of that, the Government of India using NCEF fund to compensate various state Governments for their loss in revenue due to GST, clearly contradicts with India’s green energy vision and initiatives.

soalr

India must utilize initiatives such as NCEF and incorporate other policies such as- carbon pricing, while supporting renewable energy growth through investment and encouragement. It is apparent that joining the fight against climate change is not a choice anymore it is a necessity. Although initiatives of the Government should be appreciated, we should not sit idly by the predictions of a marginal success. We need to focus at prioritizing the renewable energy industry and solving its critical issues through investment and policy intervention to create momentum and see our country solve not just energy issues, but create a better social and economic structure that works towards restoring the environment.

Note: This article was published in prominent solar magazines like- EQmagpro, Energy Economic Times on 17th November 2018.

Re-Prioritizing ‘Make in India’: Need of the Hour

India saw the opportunity for growth in economic development through industrial capacity expansion and domestic manufacturing. Hon’ble Prime Minister, Shri Narendra Modi focused on manufacturing and brought forward a multi-pronged operation titled ‘Make in India’ to bring in new investments and encouragement for manufacturing growth, creating jobs, and socio-economic revolution within the country. And as expected, Make in India did attract investment, reducing knowledge curve and initiating technological growth within industrial setups. In such an environment, new and lucrative sectors like Solar, saw a bright future and possibilities for country wide improvements. But, the picture is not turning out to be that rosy.

make in india 2

Support & Expectations

Make in India was supposed to work on the same lines of tried and tested strategies that have helped many countries to transform into global suppliers by focusing on their manufacturing capacity expansion. The initiative was expected to create jobs, help develop long-term policies for R&D growth, faster deployments, and build capacity in manufacturing raw materials in a value chain, to satisfy domestic demand and ultimately capture the export market of progressive sectors like Solar.

To support Make in India to turn these expectations into reality, Government of India established Special Economic Zones (SEZs) and extended special benefits like- cheap water, electricity etc. The Government also offered special benefits to lucrative sectors like Solar, namely- exemption from excise duties, 10-year income tax holiday, exemption of sales tax in certain states, payment security mechanisms to cover the risk of default by state utilities/DISCOMs etc.

partnership

Additionally, Government also permitted 100% Foreign Direct Investment (FDI) under the automatic route for renewable energy generation.

As a result, India was able to excel in building a strong manufacturing set up in one of the fastest growing sectors like Solar. And with initiatives like Make in India running at full throttle, India stood a chance to surpass dominating solar countries like US and eventually China. However, the biggest challenges to make that happen is lack of support from Make in India.

The Current Reality

Making India a manufacturing hub can be the solution to all of the country’s woes. In fact, solar has already presented itself as a viable sector to invest in. The sector’s continuous leaps from 5 GW in 2015 to 10 GW in 2016 to ~25 GW in 2018 acts as a proof of its promising nature. And there are numerous examples where countries have become global suppliers in solar sector by focusing on manufacturing- like China. Although, Make in India could have helped India achieve a similar goal, India’s continuously growing dependency towards importing solar has removed that opportunity from equation. India spent $3.8 bn in FY 17-18 on solar module import, which has limited the progress in manufacturing capacity expansion, leading to a market scenario where foreign suppliers have claimed more than 80% share. In the same breath we need to highlight that China’s recent energy policy will lead to further fall in imported module prices, capturing demand of domestic manufacturing even more (currently Indian suppliers have less than 10% share in Indian solar market).

6

Additionally, continuous drop in solar tariff, cancelation of projects, and lack of green energy distribution to the grid is scaring away the investors, making it more challenging for Make in India to succeed.

On top of that, imposition of 25% safeguard duty on SEZ based solar manufacturing units in India stands to deal a damaging blow to country’s solar manufacturing industry, as India’s 40% of Solar panel Manufacturing Units and 60% of Solar Cells Manufacturing Units are currently located in SEZs. SEZs were built to support Indian manufacturing sector, and as the growth statistics, it has. And for continued growth, more support is needed not taxes, or duties.

It is, as it seems. But there is still time to turn things around. Make in India can still serve the purpose it was built for: economic and social growth through industrial development. However, intervention is needed in different strategic and operational layers.

  • New policies are needed to address manufacturing issues regarding infrastructure, transport, taxation, power outages, labor laws, and taxation
  • Low cost finances and longer tenure loans are needed to help solar project developers
  • Investment in establishing R&D institutions is needed to support quality control and to reduce the knowledge curve
  • Reducing import dependency
  • Re-prioritizing solar and exempting it from duties, added taxes are also necessary
  • Campaigns like National Skill Development Mission are already available, Government needs to invest in them and broaden their reach to create skilled workforce
  • Extending the viability of industrial license, creating random inspection scheme, and reducing corporate tax rate by 25%-30% can aid in bringing foreign investment

Moving Ahead

KLM_1376

As solar continues to gain global acceptance, this is the best time for India to focus on solar manufacturing, thus making power for all a reality while becoming a global supplier of solar components. Make in India is the perfect platform to launch this growth trajectory. However, much more focus on domestic manufacturing rather than importing is needed.

It is estimated that with focus on domestic manufacturing, India can overtake EU’s renewable expansion by 2022. And that would be just the beginning for India to become an energy reliant, economically strong, manufacturing hub of the world.