Seven years from now, passengers looking out of planes flying over India shouldn't be surprised to see swathes of land covered with shiny, black panels staring right back up at them. If the Narendra Modi government is successful, rows of these panels would have been mounted everywhere -- on rooftops of buildings across cities, at airports, on trains, at railway stations and, of course, on vast expanses of land - quietly generating clean power tapped from the sun.
In June this year, the Union Cabinet approved a plan to increase India's solar power capacity target five-fold to 100,000 megawatts by 2022, equivalent to roughly one-third of the country's current total electricity generation capacity. Rooftop installations will account for a 40% chunk of this target and the remainder will come from medium and large grid-connected projects
The Indian Government is planning to significantly boost the renewable energy capacity addition target for the medium term as part of its national climate change policy.
The government may soon announce a target to have 40% power generation capacity based on renewable energy technologies by 2030. This would translate to around 350 GW by 2030, pushing the country’s expected total capacity to 850 GW power generation capacity.
India currently has an installed capacity of around 275 GW, with over 36 GW of renewable energy capacity, contributing around 13% to the installed base.
The huge boost in the country’s renewable energy target will mostly comprise of solar (250 GW) and wind power (100 GW). Announced installed capacity targets for 2022 are: 100 GWsolar power and 60 GW wind energy capacity. In the solar power market, the government is planning to have several auctions, including those for 25 ultra mega solar power projects. In the wind energy sector, the government has announced policy to open the offshore wind energy market, and may consider competitive auctions.
The new target may be announced as part of India’s commitment for this year’s global climate change summit in Paris. The Indian Government has made it clear that it would not commit to any emissions reduction or even peaking targets.
There are also reports that India may enhance its commitment to reduce emissions intensity. It is safe to assume that any target proposed by India would include conditions for substantial international support. Such a huge installed capacity targets would require unprecedented investment in India’s renewable energy market. India is looking to raise funds through green bonds and is also looking to secure low-cost debt finance from global development banksincluding the International Finance Corporation, Asian Development Bank, and KfW.
However, a report by Cleveland’s Institute for Energy Economics and Financial Analysis (IEEFA) has forecast that India is likely to fall agonizingly short of hitting its goal of installing 100 GW of solar PV capacity by 2022, reaching instead a still-impressive 75 GW.
This figure would represent more than one-fifth of India’s entire electricity demand by that date, generating 110 tWh – 22% - of all required power increase over the next seven years, said the report.
However, although solar PV will play a huge role in the development of 175 GW of clean energy capacity between now and 2022, the achievement of hitting 75 GW will still see the country fall short of the target outlined in the Jawaharlal Nehru National Solar Mission (JNNSM).
With the support of the JNNSM, India is likely to end 2015 with cumulative installed solar PV capacity of 5 GW, which means that to achieve 100 GW by 2022 the country would have to increase its solar market at a compound annual growth rate of 63%.
According to Mercom Capital, India is on course to grow its solar capacity by 2.5 GW this year, and is certainly poised to become a leading player in the global solar landscape. The JNNSM target of 100 GW is split 60/40 in favour of large-scale installations, with 40 GW planned for rooftop solar – the sector where India may struggle to meet its aims.
IEEFA’s report, however, anticipates a China-like solar expansion in India, with the next five years characterized by accelerating growth that will echo China’s meteoric rise of 1 GW in 2010 to close to 33 GW at the end of 2014, says Bloomberg New Energy Finance (BNEF).
"India is replicating Germany’s and China’s systematic electricity sector transformation, with the added advantage that the cost effectiveness of this is accentuated by the fact that the price of solar electricity has dropped by 80% in five years," said IEEFA director of energy finance studies, Tim Buckley.
The wider energy goal of the Indian government is to ringfence the country’s energy security, and Prime Minister Narendra Modi has targeted renewable energy as the most likely route to energy independence.
Recent signs are that solar’s potential is being fully explored and understood, and the IEEFA report follows hot on the heels of news that India has now struck the lowest Indian PV price – central Indian state Madhya Pradesh recently accepted a bid for a project selling solar power at a record low of $0.08 per kWh.
For the current financial year, the ministry has set a target of adding 200 MW rooftop solar power capacity. This is supposed to increase to 4.8 GW in the next financial year (2016–17). In 2017-18, capacity of 5 GW rooftop solar power projects has been envisaged, with a 1 GW additional target up to 9 GW in financial year 2021–22.
The rooftop solar power projects are expected to be commissioned mostly by the state governments through their own solar power policies.
The ministry expects 1.8 GW of utility-scale solar power capacity additions in the current financial year, followed by 7.2 GW in financial year 2016–17. Capacity addition targets for financial years 2017–18 to 2019–20 are 10 GW each, while a total of 18 GW- capacity would be added in financial years 2020–21 and 2021–22.
To set up utility-scale solar power projects, the central government as well as the state governments shall organise competitive auctions. These will include auctions for ultra mega solar power projects as well. The government has announced plans to set up 25 such projects, which will have a capacity of up to 4 GW each. They are expected to have a cumulative installed capacity of 20 GW.
No one would argue against the idea of generating 100 GW of solar power in a country like India, which is endowed with abundant sunshine. In most parts of the country, clear sunny weather is experienced for 250 to 300 days a year.
Some say the Modi government's agenda is 'overambitious' and question whether the initiative, which requires an investment of Rs 6 lakh crore, will deliver. India's current solar power base is 4,060 MW. The goal can be reached if an average of about 15,000 MW of solar power is added every year.
The target is very achievable, Ajay Prakash Srivastava, Director of the Solar Energy Society of India, says. "The confusion may be because people think all of the 100 GW will be grid-connected," Srivastava said. "There are, however, concerns over the tariff issue and how it could in the long term affect the quality of solar power and its reception by people and we feel the government must step in there."
Year Wise targets to achieve the 100 GW mission
Category 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 TOTAL
Rooftop 200 4800 5000 6000 7000 8000 9000 40000
Mounted 1800 7200 10000 10000 10000 9500 8500 57000
Total 2000 12000 15000 16000 17000 17500 17500 97000
In total, we should have commissioned solar power units to the tune of 12,000 MW by next year.
India has started to make all the right moves, the Institute for Energy Economics and Financial Analysis said in a report this month. "A rapid ramp-up in India over several years is just as feasible...Much needs to be done still to turn this intent into action, but a number of recent developments give substance to the objective. As solar becomes more and more commercially viable, the step-up in Indian investment and employment, and the benefits of energy system diversity, will only add momentum," the US institute said.
The Indian Railways signed four agreements last week with the MNRE "to bring in a change in the energy mix and solarisation of railways." The Delhi Metro Railway Corporation is on track to go completely solar -- talks are on to supply it with 2,000 MW of solar power through the central transmission network.
The civil aviation ministry, too, is working closely on the solar model. Earlier this month, Cochin International Airport became the first in the world to operate entirely on solar power, a template that another 6-7 airports will follow.
On a larger scale, 27 "solar cities" have been identified for reducing the consumption of conventional energy by a minimum of 10% in five years by opting for power from renewable sources and adopting efficiency measures.
Solar rooftop systems have been targeted on the huge spaces available across government buildings, institutions and properties with public sector units. "Even if a part of this roof space is utilised for setting up rooftop solar power systems, thousands of MW of solar power can be generated, besides saving money for the concerned ministries/departments," the MNRE said in a note to all central government departments, state governments, educational institutions and district collectors on August 10, 2015.
According to estimates of rooftop solar power potential drawn up by the MNRE, the Ministry of Consumer Affairs, Food & Public Distribution leads with 2,314 MW, followed by the railways at 1,369 MW. Other ministries with potential include Petroleum and Natural Gas (1,009 MW), Civil Aviation (620 MW), Human Resource Development (497 MW), Chemicals & Fertilizers (401 MW) and Defence (281).