India’s Solar Ambitions Could Put It in the Lead

(3BL Media/Justmeans) - Last week, we wrote about the Lima conference and some of the challenges that were faced there. Among these were the fact that certain developing countries were reluctant to make commitments that they felt would adversely impact their economic growth. One of these was India. Indeed, India was heavily pushing for, and successfully achieved, some revisions to the terms of the agreement that included the principle of “common but differentiated responsibilities.”

This, says Indian Environmental Minister Prakash Javadekar. "gives enough space for the developing world to grow and take appropriate nationally determined steps.”

This bottoms-up approach is a departure from the original top-down target setting mechanism. It leaves unanswered the question of the total carbon reduction, in essence trusting that what the developing countries say is the best they can do, will be good enough.

There is some reassurance on that note, with some rather bullish announcements regarding India’s solar initiative. The program was first introduced in 2010 with a target of 20GW by 2022. The announcement was met with skepticism; indeed, in the first years, performance has lagged expectations with only a little over 3 GW installed as of this past March, about 85% of which is grid-connected. However, things seem ready to take off after the election of Narendra Modi as Prime Minister and the decision not to impose tariffs on the import of American and Chinese solar panels.

Mercom Capital is now estimating additional installations of 1.8GW for the year 2015.  Says Mercom CEO, Raj Prabhu, “The Indian solar industry is visibly upbeat since the elections and especially after getting past the anti-dumping case.” Also contributing to the optimism are “recent cancellations of coal mining licenses by the Supreme Court amid rising coal imports and increasing costs, and continuing power shortages.”

To date, most of the progress has been state driven. Gujarat is in the lead with the highest installed capacity 916.4MW, followed by Rajasthan 734.1MW. Those two states with their incentive programs, account for roughly half the national total.

Now the Central Government is stepping, with the Ministry of New and Renewable Energy (MNRE) announcing their own interim goal of 15 GW by 2019. This will be achieved with a series of huge utility scale 500MW to 1 GW solar parks. They also announced 12 locations in seven states where additional “ultra-mega solar projects” could be built. These alone could account for 20 GW.

This is all in preparation for a monumental expansion of the target to a whopping 100GW, five times the original goal. To put that in perspective, the US currently has 17.5 GW of capacity installed as of the end of the 3rd quarter 2014. Germany leads the world with 39.7MW, though installations there are beginning to taper off. To say that this new target would catapult India to the forefront of renewables would not be an understatement.

Piyush Goyal, India’s Energy Minister told reporters, “On the solar front, we believe there is enormous potential to take it to 100,000 MW in next five to seven years. Renewable energy may seem expensive, but in the long run, it scores over conventional energy. The subsidy regime needs to be more robust, targeted and sustainable. The government of India stands committed to lead the revolution in the renewable energy sector. Transparency, honesty, world-class technology will be the key to dealing with key challenges.”

This is certainly welcome news from a country that has been on a trajectory to single-handedly tip the scales on climate change, through their massive burning of coal. Indeed it was not long ago that the same energy minister said, ““India’s development imperatives cannot be sacrificed at the altar of potential climate changes many years in the future.”

This prompted one of the world’s top climate scientists, Veerabhadran Ramanathan, director of the Center for Atmospheric Sciences at the Scripps Institution of Oceanography, to say that, “If India goes deeper and deeper into coal, we’re all doomed.”  And, he added, “no place will suffer more than India.”

India will continue to develop its coal reserves in its attempt to bring its massive population out of poverty, following an “all of the above approach” as the US has done. 

Each Indian citizen uses only roughly 7% of the energy of a typical American. Yet they have nearly four times the US population, with a much higher poverty rate. That’s why they cheered the outcome from Lima, allowing them to follow differentiated responsibilities. It seems as if the new Prime Minister is taking those responsibilities seriously. We all need to hope so. Because when it comes to carbon, the boat is already pretty full and many different combinations of large and small players could potentially tip it. But India with its very large developing population and largest reserves of dirty coal, could potentially tip it all by herself.

What’s a little unusual about India’s massive solar buildup is its heavy reliance on large utility scale deployments. While that might make sense in service of any of India’s large cities, there is little mention of rooftop solar to serve the vast rural population, many of whom are either off the grid or served by unreliable grids. Given the experience we’ve seen here in the US, it seems clear that utility interests were prominently featured in the development of this plan.

[Image credit: Loupiote: Flickr Creative Commons ]