India added just over 1 gigawatt of solar energy to its electrical grid last year, a major milestone that nearly doubles the country’s cumulative solar energy capacity to 2.18 gigawatts. After a slow start to the year, solar installation picked up rapidly — a good sign that India will be able to meet its ambitious solar targets going forward. India hopes to install 10 GW of solar by 2017 and 20 GW by 2022.
The Jawaharlal Nehru National Solar Mission,launched in 2010 by Prime Minister Manmohan Singh, aims to help the country achieve success with solar energy deployment. India is currently in the planning stages of building the world’s largest solar plant, which would generate 4 gigawatts in the northwestern state of Rajasthan.
“This is the first project of this scale anywhere in the world and is expected to set a trend for large-scale solar power developments,” Ashvini Kumar, director of Solar Energy Corp, one of five public utilities that will run the plant, told Business Insider.
In the last decade India’s renewable energy capacity has gone from just under 4 GW to over 27 GW as of this month. Wind energy makes up about two-thirds of this total, with small hydropower contributing nearly 4 GW and biomass over 1 GW.
Last weekend India and the United Arab Emirates (UAE) signed a Memorandum of Understanding to cooperate to promote renewable energy, especially solar.
“The MoU has come at a time when India is struggling to implement ambitious plans to reach out to the population without access to modern forms of energy across the country,” said Jarnail Singh, India Program Manager at the Climate Group.
40 percent of rural Indian households don’t have power. India is also anxious to develop domestic energy sources to supply growing demand so it doesn’t have to import fossil fuels that contribute to trade deficits. Over half of India’s electric power capacity comes from coal, with coal imports hitting a record high last fiscal year. This is bad both environmentally and economically for India.
In a further indication that renewable energy has a large role to play in India’s future, last year the largest coal company in the world, Coal India, starting pursuing commercial solar power plants to cut costs.
The company explained its logic, in part, by saying “India has an abundance of sunshine and the trend of depletion of fossil fuels is compelling energy planners to examine the feasibility of using renewable sources of energy like solar, wind, and so on.”
India’s Jawaharlal Nehru National Solar Mission, launched in 2010, is “well-poised to make India a global leader in the development of solar power,” says the World Bank. Aiming to install 20 GW of solar power by the year 2020, India is already well on her way, having grown from an installed solar capacity of only 30 MW in 2010 to 2,000 MW in 2013.
“In a short span of three years, India has made impressive strides in developing its abundant solar power potential,” said Onno Ruhl, World Bank country director in India. ”With more than 300 million people without access to energy and industry citing energy shortage as key growth barrier in India, solar power has the potential to help the country address the shortage of power for economic growth.”
“However, while India is clearly emerging as a global leader in the area of solar power, to achieve its target of adding 20,000 MW of solar capacity by 2022, it needs to address the key barriers and constraints that could come in the way of scaling up the solar program.”
Already Indian solar has seen costs reduced to amongst the lowest in the world, thanks in part to two specific aspects which have minimised tariffs – bundling of solar power with unallocated thermal generation and adoption of reverse auctioning.
According to the World Bank:
Such bundling of solar power with cheaper conventional power helped reduce solar power tariffs for distribution utilities. The reverse bidding mechanism enabled qualified bidders to benefit from declining global prices for solar components, thereby reducing the purchase price of both solar PV and Concentrating Solar Power (CSP) for the utilities.
The authors of the report identified several key observations of the first phase of the Jawaharlal Nehru National Solar Mission (JNNSM):
After evaluating the key objectives of the JNNSM, the authors of the report found the following issues “which could prevent the program from reaching, and possibly exceeding, the target of 20 GW of grid-connected solar capacity in the country by 2022″:
Lack of adequate participation of Scheduled Commercial Banks (SCBs) in solar financing
Bottlenecks in the enabling environment
Payment security for future projects
Unintended technology outcomes over Phase I
Beleaguered local solar manufacturing environment
Adequacy of the current approach to developing solar thermal projects
Enforceability of RPOs and concerns around solar Renewable Energy Certificates (RECs)
1. Increase access to funds from commercial banks and attract private financing
Under Phase I of the program, scheduled commercial banks mostly shied away from lending for solar projects while export credit agencies, multilateral financial institutions, and some nonbanking financial institutions took up most of the financing. However, given that most infrastructure lending in India has been led by commercial banks, the solar program too will need their active participation to scale up to the levels envisaged.
2. Develop shared infrastructure facilities such as solar parks
The provision of publicly developed infrastructure frees private providers to focus on solar power development, increases efficiency, and lowers costs. Gujarat, for example, was the first state to declare a solar policy (2009) and today, is at the forefront of solar power generation in India. Its first solar park, developed on waste land in Charanka (Patan district), has the largest solar capacity in Asia. The park provides developers with already developed land along with critical infrastructure, including facilities for power evacuation and transmission, roads and water, thereby ensuring the rapid development of solar projects.
3. Use India’s comparative advantage to develop a niche in the manufacturing value chain
India’s solar PV manufacturing capacity is limited and does not straddle the higher technological echelons of the industry. This is because India’s manufacturers lack the raw materials, do not have access to low-cost financing, and face underdeveloped supply chains. In CSP, where local manufacturing is more complex, India has not been able to manufacture some critical components. Either technology suppliers are limited and their products patented or the lack of natural resources poses an impediment. India should therefore seek to define and develop its manufacturing capabilities in specific parts of the value chain where it enjoys a comparative advantage and can emerge as a globally competitive producer.
An earlier ESMAP-World Bank study, Development of Local Supply Chain: A Critical Link for Concentrated Solar Power in India has identified the potential for reducing the costs of CSP components in India through local domestic manufacturing.
As can be seen, wind makes up a sizable portion of India’s total renewable energy makeup, with 19,881 MW of connected power. India’s wind energy target for 2013-14 sits at 2500, and they’ve already installed 808 MW so far — adding 102.5 in September alone.
Solar power doesn’t receive the same focus as it does in other countries, but it is still growing, with 395 MW deployed already in the 2013-14 time period — of which 111 was deployed in September, taking the number up to 2080 MW.
The news comes on the heels of continuous solar improvements in the country. Tuesday saw the news that Madhya Pradesh, a state in India, already has 202 MW installed and intends to “crank that up to 1,400 MW by the middle of 2015.”
It’s the first time the country has opened up bidding since 2011, and the government is “offering 18.75 billion rupees ($303 million) in grants to the project from the National Clean Energy Fund (NCEF).”
Joshua S Hill I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium. I love words with a passion, both creating them and reading them.