Renewable energy in India : News & Updates

India to build 30 gigawatts of renewable plants along western border
India is considering building 30 gigawatts of renewable energy capacity along a desert on its western border known for its sunny, windy and arid expanse, according to people familiar with the plan.

The projects, which will be spread across the states of Gujarat and Rajasthan, are part of efforts to expand the country’s renewable capacity and reduce the share of fossil fuels in its energy mix, the people said, asking not to be named as the discussions are private and at an early stage. The plan was discussed at a meeting in Gujarat last week, they said.

Land for renewable projects is a key challenge in India and the high cost of acquisition weighs on the price of electricity. The nation is increasingly looking at barren lands for building renewable projects so its energy goals don’t clash with its growing need for agricultural production.

For that reason, India plans to install 25 gigawatts of solar projects, combined with storage capacity, in the high-altitude region of Ladakh in the extreme north of the country, power minister R.K. Singh said in August.

The power ministry didn’t respond to requests for comment.

Prime Minister Narendra Modi has pledged to cut the emissions intensity of India’s gross domestic product by a third by 2030 from 2005 levels to fight climate change.

The country recently announced a target to set up 450 gigawatts of renewable power generation capacity by 2030, while it works on a nearer-term goal of 175 gigawatts by 2022.
India to build 30 gigawatts of renewable plants along western border
 
India in talks with World Bank for Modi’s  global electricity grid plan

Updated: 09 Jan 2020, 08:20 AM IST
By Utpal Bhaskar.

  • Govt holds preliminary talks with World Bank to ready feasibility report for the clean energy project
  • PM Modi had pitched for a global power grid at the 1st general assembly of ISA in October 2018
93ddfb4a-321b-11ea-abf9-d6598481f54e_1578537752951_1578537892371.jpg

The proposed global grid plans to leverage solar power generated in one geography to feed the electricity demands of other nations.afp

India has started consultations with the World Bank as its technical partner to implement an ambitious global electricity grid plan pitched by Prime Minister Narendra Modi. With the world grappling with climate change concerns, a senior government official said the multilateral funding organization may prepare a feasibility report for the project announced in October 2018, that can further bolster India’s image as a clean energy champion.

The proposed global grid plans to leverage solar power generated in one geography to feed the electricity demands of other nations. This comes against the backdrop of China’s attempts to co-opt countries into its ambitious One Belt One Road initiative, a programme to invest billions of dollars in infrastructure projects, including railways, ports and power grids, across Asia, Africa and Europe.

“The government has had preliminary discussions with us. It’s too early to share any details at this stage. For any further information, you may want to contact MNRE (ministry of new and renewable energy) ," a World Bank spokesperson said in an emailed response.

“This is quite an ambitious project and not a simple one. We have started deliberations with the World Bank for them to prepare a report on the same. A similar mechanism exists in Europe. One grid is very advantageous to the participating nations," said a senior Indian government official, requesting anonymity.

India has been supplying power to Bangladesh and Nepal and has been championing a South Asian Association for Regional Cooperation (Saarc) electricity grid minus Pakistan to meet electricity demand in the region. Also, power-starved Bangladesh wants to buy electricity from large solar parks being set up in Gujarat and Rajasthan, with fostering cross-border energy trade being an important part of Modi’s South Asia-focused neighbourhood-first policy.

“The Prime Minister gave us a vision when he inaugurated the International Solar Alliance. The vision is ‘one-world, one-sun, one-grid.’ That vision is so forward looking....So, we can use that solar energy here. It’s only a question of transmission," power and new and renewable energy minister Raj Kumar Singh had earlier told Mint.

Queries emailed to the MNRE spokesperson on Monday evening remained unanswered.

The World Bank Group has been closely involved with capacity building in India. Its president David R. Malpass had visited India last October to give a lecture on the ‘role of financial sector in development’ to India’s top policy makers, as part of the series hosted by India’s federal think tank NITI Aayog.

Mint reported on 22 August about India’s plans to help set up a global electricity grid that may initially aim to link countries such as Myanmar, Thailand, Cambodia, Laos and Vietnam with the sub-continent as part of an evolving energy security architecture. The initial plans also involve setting up an under-sea link to connect with Oman in the West. However, the plan hasn’t gained traction in the backdrop of India-headquartered International Solar Alliance’s (ISA’s) drive to co-opt countries from South-East Asia facing problems with some countries holding back because of New Delhi’s decision to not join the Regional Comprehensive Economic Partnership trade deal.

Initially, ISA envisaged 121 sunshine countries situated between the tropics of Cancer and Capricorn as its members. Prime Minister Narendra Modi later announced the “universalization" of membership with India moving the proposal to make all United Nations members eligible for ISA membership.

Prominent inter-governmental organizations in the energy sector include the Vienna-based Organization of the Petroleum Exporting Countries (Opec) and Paris-based International Energy Agency. Interestingly, India has pitched ISA as a counterweight to Opec, with the fossil fuel consumers calling for a global consensus on “responsible pricing" against the backdrop of uncertain global oil prices.

India in talks with World Bank for Modi’s  global electricity grid plan
 
India in talks with World Bank for Modi’s  global electricity grid plan

Updated: 09 Jan 2020, 08:20 AM IST
By Utpal Bhaskar.

  • Govt holds preliminary talks with World Bank to ready feasibility report for the clean energy project
  • PM Modi had pitched for a global power grid at the 1st general assembly of ISA in October 2018
93ddfb4a-321b-11ea-abf9-d6598481f54e_1578537752951_1578537892371.jpg

The proposed global grid plans to leverage solar power generated in one geography to feed the electricity demands of other nations.afp

India has started consultations with the World Bank as its technical partner to implement an ambitious global electricity grid plan pitched by Prime Minister Narendra Modi. With the world grappling with climate change concerns, a senior government official said the multilateral funding organization may prepare a feasibility report for the project announced in October 2018, that can further bolster India’s image as a clean energy champion.

The proposed global grid plans to leverage solar power generated in one geography to feed the electricity demands of other nations. This comes against the backdrop of China’s attempts to co-opt countries into its ambitious One Belt One Road initiative, a programme to invest billions of dollars in infrastructure projects, including railways, ports and power grids, across Asia, Africa and Europe.

“The government has had preliminary discussions with us. It’s too early to share any details at this stage. For any further information, you may want to contact MNRE (ministry of new and renewable energy) ," a World Bank spokesperson said in an emailed response.

“This is quite an ambitious project and not a simple one. We have started deliberations with the World Bank for them to prepare a report on the same. A similar mechanism exists in Europe. One grid is very advantageous to the participating nations," said a senior Indian government official, requesting anonymity.

India has been supplying power to Bangladesh and Nepal and has been championing a South Asian Association for Regional Cooperation (Saarc) electricity grid minus Pakistan to meet electricity demand in the region. Also, power-starved Bangladesh wants to buy electricity from large solar parks being set up in Gujarat and Rajasthan, with fostering cross-border energy trade being an important part of Modi’s South Asia-focused neighbourhood-first policy.

“The Prime Minister gave us a vision when he inaugurated the International Solar Alliance. The vision is ‘one-world, one-sun, one-grid.’ That vision is so forward looking....So, we can use that solar energy here. It’s only a question of transmission," power and new and renewable energy minister Raj Kumar Singh had earlier told Mint.

Queries emailed to the MNRE spokesperson on Monday evening remained unanswered.

The World Bank Group has been closely involved with capacity building in India. Its president David R. Malpass had visited India last October to give a lecture on the ‘role of financial sector in development’ to India’s top policy makers, as part of the series hosted by India’s federal think tank NITI Aayog.

Mint reported on 22 August about India’s plans to help set up a global electricity grid that may initially aim to link countries such as Myanmar, Thailand, Cambodia, Laos and Vietnam with the sub-continent as part of an evolving energy security architecture. The initial plans also involve setting up an under-sea link to connect with Oman in the West. However, the plan hasn’t gained traction in the backdrop of India-headquartered International Solar Alliance’s (ISA’s) drive to co-opt countries from South-East Asia facing problems with some countries holding back because of New Delhi’s decision to not join the Regional Comprehensive Economic Partnership trade deal.

Initially, ISA envisaged 121 sunshine countries situated between the tropics of Cancer and Capricorn as its members. Prime Minister Narendra Modi later announced the “universalization" of membership with India moving the proposal to make all United Nations members eligible for ISA membership.

Prominent inter-governmental organizations in the energy sector include the Vienna-based Organization of the Petroleum Exporting Countries (Opec) and Paris-based International Energy Agency. Interestingly, India has pitched ISA as a counterweight to Opec, with the fossil fuel consumers calling for a global consensus on “responsible pricing" against the backdrop of uncertain global oil prices.

India in talks with World Bank for Modi’s  global electricity grid plan
Good idea, if only solar power is traded and China is avoided ( i dont see how it can be limited to solar power alone as the grid by itself doesn't differentiate or is it a move to create a first mover advantage in setting up a global grid - which might be short term benefit)
China for all its might haven't implemented a nation wide unified synchronised grid. The state grid and southern power grid are connected by back to back HVDC link. Couple this with regional disparity in generation ( in NorthEast China and SouthWest) and load centres (in East), vast distances involved, it would be ideal for the existing and potential hydropower project in Tibet and nearby ( Sichuan Yunan) etc to pump it to a nearby load centre ie India and South East Asia. The inherent state owned subsidised nature of these enterprises of China distorts the efficiencies of such plants and may lead to dumping the commodity. Chinese tried hard around the first obor to explore and move this proposal by holding consultation with regional grid operators, including the proposal for inter state connection with 1.2 MegaVolt UHV links. This didn't find much favour then. I hope we don't end up doing for China what even they couldn't pursue.
 
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Two pieces of news broke last week. Both around solar energy in India.

Both go back to something that was kicked off in 2015.

First, Mint reported that several Southeast Asian countries were hesitant to join the International Solar Alliance (ISA).

In case you don’t know, the ISA is an alliance of 121 countries that lie between the Tropic of Cancer and the Tropic of Capricorn - sunshine region of earth. It’s an alliance formed by India in 2015 with the aim of using solar energy to replace fossil fuels. Think of it as the new energy equivalent of Organization of the Petroleum Exporting Countries (OPEC).

Second, the Economic Times published a story that SoftBank was in talks to sell a majority stake in its Indian renewable energy company, SBG Cleantech.

Set up in 2015 as a joint venture between SoftBank, Bharti Enterprises and Taiwan’s Foxconn Technology Group to build solar and wind parks, it was a key win for Prime Minister Narendra Modi and the Indian government’s push for clean energy.

Look, I know what you are thinking. This looks like a familiar script. This is a story about the Indian government doing stupid things, and of SoftBank doing cartoon-villain evil things.

Nope. That’s not this story.

Mostly because, and I can’t believe I am typing this out, solar energy was one of the very, very few things the Indian government got right. Not demonetisation. Not the Goods and Services Tax. Not the economy. Not tax structures. But solar energy policy.

And not for a short period. But for nearly a decade.

Then, suddenly, it noticed things were going well and said — hey wait a minute...

And proceeded to screw it up.

Big Solar Audacious Goals are set...

Back in 2010, the Indian government launched an initiative called the National Solar Mission. The purpose of the mission was simple — establish India as a global leader in solar energy.

At that time, India had an installed solar capacity of around 10 MW. To put this in perspective, the total installed capacity of all energy sources in India — coal, thermal, hydro, everything else was around 160 GW, of which just 10% was renewable energy. Solar energy stood at 0.006%.

So the National Solar Mission said, okay, let’s set a big, audacious, goal. Let’s get solar to 20 GW by 2022.

That’s a 2000X increase. In just 12 years.

Look, if you know anything about India, you’ll know that goals like this are made all the time. Announcement is made. All the newspapers faithfully carry it in their pages. Speeches are made. Then everyone in government goes back to their day job of finding excuses to walk out of Parliament.

This time though, something strange happened.

India hit the 20 GW target in 2018.

A full four years ahead of schedule.

...and so the Indian government gets more ambitious

It’s worth asking, how did this happen?

There are four things that are necessary to make solar energy work.

  1. Cheap solar panels
  2. Cheap labour
  3. Cheap land
  4. Lots of sun

India had the last three. It was solar panels — the most important part that had to be fixed. And it got it thanks to a combination of smart policy, the right incentives and...China.

The last bit is important.

China was always interested in solar panels. It neatly fits with their traditional strengths. Manufacturing. Low technology. Global market. So, China really doubled down. Driven by subsidies, economies of scale, and capital, by 2012, China’s solar module manufacturers had the capacity to supply the entire world’s solar needs.

As we wrote in a story last year,

The resulting glut in the early 2010s led to the collapse of several Chinese—as well as American and European—manufacturers. Both the US and the European Union had slapped anti-dumping and anti-subsidy tariffs on Chinese solar cells and modules by the end of 2014. Undeterred, Chinese companies set their sights on a new, rapidly growing market—India.

So, in 2015, the Indian government got more ambitious. They raised the bar. Now the new target became 100 GW by 2022.

Prices continued to fall.

Much as in the US and Europe before, cheap Chinese equipment drove down costs for developers, giving India some of the lowest prices for solar-based electricity tariffs in the world. Tariffs fell to less than Rs 3 ($0.04) per kilowatt-hour as companies bid furiously for projects in 2016 and 2017, as imports accounted for about 90% of module sales.

India had arrived. In fact, in 2017-18, the Indian government added nearly 9 GW of solar energy — the highest ever. This is how it hit its 20 GW target early.

Then something changed.

In 2018, for the first time in five years, installations declined.


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The four horsemen arrive

Go back to that list of things that’s needed to make solar work.

  1. Cheap solar panels
  2. Cheap labour
  3. Cheap land
  4. Lots of sun

The word cheap is there three times for a reason. It’s that important. Don’t forget, other forms of energy generation—like coal—have been around for over a century. Over this time, they have scaled globally, and that’s why they are nearly impossible to displace. The only way to do that is if solar energy can be produced more cheaply than any other form of energy. That’s why China’s role is so crucial. No other country could do what China did to drive down prices. Not now. Likely not ever.

That’s the first thing you need to know. Pricing. The minute prices go up, solar energy goes away. Nobody cares about it anymore.
The second thing you need to do is who is responsible for power in India. In India, electricity is a state responsibility, not a central one. This means that the union government can set some policy, incentives, and nudge things along, but really, it’s up to individual states if they want to invest in electricity, and how to do it.

One of the ways that the Indian government did this was to assure solar companies in India that state discoms (power companies) would purchase a certain part of their power requirement from them, even if it was more expensive.

However, the states didn’t see it the same way.

As Down to Earth reported,

Another reason for the slump is governments’ insistence that plants sell power to discoms at unreasonably low tariffs. This trend began in 2017 after Rajasthan received a bid of Rs 2.44 per unit for the Bhadla Solar Park of Jodhpur.

That set the bar low and all states now expect extremely low tariffs, though operational costs there might be higher than they are at Bhadla. “Lower tariffs require a near perfect scenario where execution, collection and generation risks are minimal,” said Arul Shanmugasundram, chief executive of Mumbai-based Tata Power Solar.

Things were tight.

Then it got worse.

Because in 2017, India launched the Goods and Services Tax.

And it hit solar hard.

Since many projects predated the tax, and the tariffs that project developers quoted while applying for the tenders were calculated without taking the tax into account, GST became an additional burden and turned the projects unviable.

The Centre asked the project developers to pay the tax and assured them reimbursement. This did not happen.

“Between 2017 and mid-2019, the industry paid Rs 8,000 crore in GST. But state governments refused to pay and instead approached the Appellate Tribunal For Electricity. We are now requesting the Centre for reimbursement,” said Manoj Upadhyay, founder and managing director, ACME Solar, a Gurugram-based firm.

Firms also said the government has framed the tax irrationally. “They tax solar projects assuming 30 percent of our cost is ‘services’ and 70 percent is ‘goods’. But ‘services’ are just 10 percent of what we do,” said Subrahmanyam Pulipaka, CEO, NSEFI. His argument could be driven by the higher tax the government levies on services (18 percent) than goods (5 percent). Still, GST has created complications.

Just as the sector was recovering from this double whammy, the Indian government hammered a third one home.

It imposed a ‘safeguard duty’ of 25% on all solar modules imported from China. It did this to protect local manufacturers from Chinese imports, and to stimulate them.

Nearly 90% of solar modules in India were imported from China.

So did the duty help Indian manufacturers?

Hell no.

As The Economic Times reported last year,

One year after India imposed an additional import duty on solar cells and modules to stimulate local production and reduce dependence on imports, no new domestic manufacturing unit has been set up, according to a renewable energy consultancy firm.

Before it was imposed, around 90% of solar panels and modules used in local solar projects were imported, mostly from China and Malaysia, as they were cheaper than locally manufactured ones.

The imposition of safeguard duty has not changed the situation.

Prices went up. In some cases, by as much as 20%. All of this led to solar companies producing lesser electricity. In September last year, the analyst firm Crisil put out a report titled ‘Return to Uncertainty’. The report noted that of the total 64 GW solar and wind capacity for which tenders were floated:

31% was cancelled
26% was undersubscribed
10% was delayed

Nobody wanted solar anymore.

Then came the economic slowdown.

Which led to states getting delayed payments from the central government. Which led to state discoms putting off payments to solar energy companies. Banks started to refuse to lend to solar companies. Slowly, solar power in India couldn’t find capital anymore.

Also, some states started doing some strange things. In a damning story published by Mint a couple of months back titled ‘The setting sun on India’s solar dreams’, it noted

Policy changes have been sudden and unpredictable in other states as well. Taking a cue from Andhra Pradesh, Uttar Pradesh made an attempt to renegotiate old renewable energy tariffs. Gujarat decided last year that only projects which supply power to the state discom could use land within the state, flouting a central procurement agency’s rule for setting up projects under the interstate transmission system. Rajasthan, one of the most sought-after states for solar power plants, recently announced its decision to impose a charge of ₹2.5-5 lakh [$3,500 - $4500] per megawatt on all projects that sell power outside the state.

In 2020, the total installed capacity of solar energy in India stands at around 28 GW against its target of 100 GW by 2022.

Last month, the Union Minister of Environment, Forest and Climate Change Prakash Javadekar claimed that India will add 67 GW in the next two years.

At the United Nations Climate Action Summit last year, India’s Prime Minister, Narendra Modi increased India’s renewable energy target to 450 GW by 2030.

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Simply adding a duty to something wont help make more of it in lot of cases.

This depends much more on the elasticity of supply, and that in turn is related to what capacity you have put in regarding capital goods + training + information flow + factors of production (and any differential duties/costs regarding those w.r.t current competitors supplying). The more you do the latter, the more elastic your supply becomes to price change....so much so you might not even need duty once you harness these (Esp if you are priced low on these factors due to underutilisation)

If you leave everything inelastic as it was before, you simply passing on another cost to consumer and changing very little structurally. The demand drop will be compressive too depending on its elasticity.

You have to do lot of this stuff sequentially from bottom up....rather than top down.

At the very end you can then add a duty to factor in for USD subsidy China has for its workforce due to its massive forex pile....if that is the last issue at that point still gumming everything up.

Basically a donkey must be trained to move, otherwise simply whipping it first thing wont move it anywhere and in fact will likely create further issues long term. Whipping (to spur the spark) is the last step when everything else is done first.

This applies to larger electronic base development in India, which is seeing some movement now after a decade+ of negligence, but still lot remains to be done given India's size and scale.
 
Analysis| India’s energy choices are critical for the world

Updated: Jan 09, 2020 20:16 IST
Amitabh Kant and Fatih Birol

Renewables, investments, oil security, climate resilience and innovation will be critical to India’s energy future.
operations-inside-largest-welspun-energy-solar-plant_4481ad96-32eb-11ea-84d3-ff42d0551712.jpg

India has ensured that energy has become both widespread and affordable for its citizens, whose typical income is a small fraction of the global average(Bloomberg)

India’s energy sector has undergone a remarkable transformation in recent years, laying the foundations for an important new phase in its development.

Twenty-five years ago, half of India’s population had no access to electricity. Today, thanks to the successful implementation of recent government policies, 99.9% of households have electricity. A push to improve the availability of clean-cooking solutions in rural areas has resulted in a “blue flame revolution”, with more than 80 million new liquefied petroleum gas connections. Coupled with piped natural gas connections, this has increased clean-cooking access to about 98% households.

India has also seized the opportunity offered by energy efficiency. As part of the National Mission for Enhanced Energy Efficiency, the government has distributed about 370 million LED bulbs under UJALA scheme.

Through such initiatives, India has ensured that energy has become both widespread and affordable for its citizens, whose typical income is a small fraction of the global average. India has been a global pioneer in the large-scale deployment of wind and solar technologies, which account for nearly a quarter of its total power generation capacity.

The International Energy Agency (IEA) just published its first in-depth review of India’s energy policies, which includes high-level recommendations aimed at helping the government reach its goals, with a focus on energy system transformation and energy security.

Created 45 years ago to help ensure energy security for the world’s leading economies, the IEA is an intergovernmental organisation whose member and association countries account for 75% of global energy consumption. The IEA provides ambitious solutions to today’s energy challenges that have a positive, real-world impact on efforts to ensure a secure and sustainable energy future for all.

India joined the IEA family in March 2017, becoming an association country. Last month, the IEA received a mandate from its member governments to begin consultations with India on a strategic partnership as a pathway to eventual membership — a game-changer for international energy governance.

India is a rapidly growing force in global energy markets. The energy choices the country makes will be critical for the future of the planet, and the IEA is eager to support the government of India and share knowledge and expertise.

In recent years, the IEA has worked with the government of India to support a range of energy policy initiatives. This work includes policy analysis and advice on the integration of higher shares of renewables, and on an integrated approach to using energy efficiency and renewables to help meet goals on energy access, climate change and air quality.

The new in-depth review of India’s energy policies supports this strong collaboration and carefully analyses how the government can achieve its energy objectives.

Here are some of the insights it offers for five key areas :

Renewables:
India’s goals include increasing its power generation capacity from renewables from 80 gigawatts today to 175 gigawatts by 2022 — and eventually to 450 gigawatts in the long term. This will require a major increase in investment as well as the right approach to accommodating the growing shares of wind and solar, whose electricity output can vary depending on the weather, the time of day and the season.

Investments: India is also continuing to pursue a greater role for markets in its energy sector as it seeks to attract more investment for its expanding energy needs. The IEA welcomes the decisions to allow private-sector investment in coal mining, and to open up the country’s oil and gas retail markets. The Government of India will need to ensure full non-discriminatory access to the country’s energy transport networks, work with the states to implement power sector and tariff policy reforms, and take action to further reduce subsidies.

Oil security: Promoting renewables and domestic oil and natural gas production will help temper India’s growing reliance on imports of oil, gas and coal. But ensuring a secure oil supply will remain a pressing need, based on the expected growth in the country’s oil consumption and imports. The IEA commends India for having put in place a strategic petroleum reserve to cover more than 10 days of current net oil imports. However, those reserves may cover only four days of net imports by 2040 because of growing demand. In this context, the IEA supports India’s plan to expand its strategic oil stockholding and its efforts to develop international collaboration with countries that have experience in stockholding and emergency response to supply shocks.

Climate resilience:
Making India’s energy system resilient to extreme climate conditions has to be a high political priority, as the country is witnessing intensifying water stress, storms, floods and other extreme weather events.

Innovation:
If India’s admirable passion for innovation and technology is supported by a smart policy framework, it can unleash investments in clean energy technology. By adopting a country-wide research and development strategy for energy, the government can bring together funding activities across India and engage with key players in the private and public sectors.

India has already proven it can overcome seemingly impossible challenges in developing its energy sector. The IEA and the Government of India look forward to working closely together to continue improving the lives of India’s 1.3 billion citizens by increasing their access to clean, secure and affordable energy.

Amitabh Kant is CEO of the NITI Aayog, and Fatih Birol is executive director of the IEA

The views expressed are personal

What the tale of Train 18 tells us about India | Opinion
 
Why India is the new hotspot for renewable energy investors
  • India is home to one of the largest clean-energy expansion programmes.
  • Support from the government and foreign investors is driving this growth.
  • There is still more the state can do to support this transition, however.
As the world comes to terms with the enormity of the threat posed by climate change, India’s emergence as home to one of the world’s largest clean-energy expansion programmes is like a whiff of fresh air.

On the back of a highly conducive policy environment, a steady influx of capital, falling prices and new technologies, India has seen an exponential growth in its renewable energy (RE) sector in the past five years. In 2015, the government made its intentions to transition to a lower-emission electricity system clear by declaring an ambitious target of 175 GW from renewables by 2022. The message was simple; wider and cheaper energy access but at minimal cost to the environment.

The renewables industry responded to the government’s call for climate-compatible growth by aggressively ramping up capacity, at an annual growth rate of 17.5% between 2014 and 2019 and increasing the share of renewables in India's total energy mix from 6% to 10%. Today, with an installed renewables capacity of 83 GW, plus 31 GW under development and a further 35 GW out for tender, India is among the top-five clean-energy producers globally and is well on course to surpass its original target. In fact, it is now eyeing 225 GW from renewables by 2022 and a target of 40% clean energy by 2030.

Not surprisingly, this growth has coincided with a sharp increase in investment in the sector from both domestic and foreign sources. The sector has seen more than $42 billion of investment since 2014 and around $7 billion of foreign direct investment (FDI) between April 2000 and June 2018. In 2017-18, total FDI in the sector surpassed $1 billion for the first time, while in 2018-19, it grew more than 20% to $1.4 billlion. Multilateral and bilateral agencies, as well as sovereign wealth funds, have pumped significant FDI into the Indian green energy space, spread across solar and wind power generation firms, electric vehicles and storage projects. India looks set to remain an attractive destination for investors in clean energy, with the government setting ambitious targets and pursuing several reforms to boost investor confidence.

For a country that is home to one-sixth of the world’s population, India’s per-capita consumption of electricity is meagre. India currently has an installed electricity capacity of 365 GW, implying a per-capita consumption of roughly 1/4th that of China and 1/13th that of the US. As India sees rapid economic growth and transforms into an industrial hub, demand for energy will spiral upwards. Growing urbanization, rising incomes and a steadily increasing population will also spur consumer demand for electricity. Studies suggest that India’s share of total global primary energy demand is set to roughly double to around 11% by 2040. India will need to double its electricity output by 2030 to meet this massive rise in demand, while also honouring its commitment to reduce its carbon footprint by 35% from 2005 levels. This would require roughly half the additional output to come from renewables, which translates to adding 25 GW of renewable capacity annually until 2030. An expansion of this magnitude will require funding of around $76 billion to 2022, growing to $250 billion during 2023-30, as per India’s Economic Survey 2018-19. Therefore, on an annualized basis, investment opportunities of over $30 billion are expected to emerge in the next decade and beyond, about three times current levels - clearly indicating a huge and untapped investment potential.

What's the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combatting climate change, yet in the past five years, the energy transition has stagnated. Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

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To future-proof the global energy system, the Forum’s Shaping the Future of Energy initiative is working with projects including the Partnering for Sustainable Energy Innovation, the Future of Electricity, the Global Battery Alliance and Scaling Renewable Energy to encourage and enable innovative energy investments, technologies and solutions.

Is your organisation interested in working with the World Economic Forum? Find out more here.

The government has also taken several steps to induce foreign investment in this sector. It has signalled its commitment to promoting green energy by declaring an aggressive target of 450 GW of green energy capacity by 2030. It has backed this up by strengthening macroeconomic fundamentals, ensuring policy stability and introducing several fiscal incentives. Consequently, India has steadily improved its position in the World Bank’s Ease of Doing Business rankings and the WEF’s Global Competitiveness Index, and is currently ranked third in the EY RE Country Attractiveness Index. India allows 100% FDI for RE projects to facilitate easy transfer of capital and technology. The new government, in its first post-election budget, has also announced several welcome measures such as tax breaks for setting up mega-manufacturing plants for solar cells, lithium storage batteries, electric vehicles and charging infrastructure. It is also focusing on strengthening the grid to enable seamless and increased integration of renewables. The fact that India’s renewable market is huge and well-diversified in terms of the location of its projects has also helped lower investors' risk perception.

In further good news for investors, the Indian RE industry has matured and is now characterised by its large size, lower risks, predictable yields and medium to high returns, which is exactly what foreign institutional investors (FII) seek. It currently offers higher risk-adjusted excess returns than markets of comparable size, such as the US or China. Overall, this makes the Indian RE sector an attractive proposition for FIIs, especially when faced with dipping returns in their home markets. RE is also more attractive than other infrastructure sub-sectors, particularly fossil fuel power generation, in terms of cash flow variability and profit margins, thanks in part to rising capital costs for fossil fuel plants.


Growth in renewables has overtaken coal in India in recent years

Image: CleanTechnica

All the above factors have paved the way for several global funds who have either entered the sector or are in advanced stages of discussion regarding investing. The list includes Singapore based GIC Holdings, Abu Dhabi Investment Authority, SoftBank, Brookfield, CPPIB and CPDQ from Canada, ORIX (Japan), Sembcorp and APG (Holland), among others, all of whom have decided to invest in the India renewables growth story. The private equity arms of Goldman Sachs, JP Morgan and Morgan Stanley have also entered the sector, reaped decent returns and continue to show faith in it.

But the government can still do more to counter potential dampeners - by, for example, improving transmission infrastructure, easing land-acquisition norms, ensuring no flip flops once contracts are concluded and revisiting aggressive tariff caps on reverse auctions that can severely dent investor margins. It must also work to turn around India's distribution companies (discoms) so that they can honour their renewable purchase obligations (RPO - promises to purchase a certain percentage of their electricity requirement from renewable energy producers) and pay investors on time. The government must also introduce a payment security mechanism to counter the risk that discoms do not fulfil their contractual obligations. A foreign-exchange hedging facility will also soothe investor worries around currency volatility. If these issues can be adequately and immediately addressed by policy-makers, it will further lower risks and boost investments.

The battle against climate change cannot be won without a healthy and vibrant renewables sector in India. This needs a steady flow of funds in the years ahead and the current sector profile is perfectly aligned to investor interests – thus raising hopes that India's renewables success story will continue unabated.
India is the newest hotspot for renewable energy investors
 
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India Added 50 Gigawatts Of Renewable Energy Capacity In Last Five Years
India has added 50 gigawatts of renewable energy capacity over the last five years, a major achievement for the country in which two-thirds of its capacity still uses fossil fuels to generate electricity.

As per government data, between March 2015 and December 2019 India added 98 gigawatts of power generation capacity. 52% of this was based on renewable energy technologies dominated by solar power, which saw addition of 30 gigawatts of new projects. Over the last five years, solar power capacity in India has increased 10 times to 33.7 gigawatts as of 31 December 2019.



The wind energy sector saw addition of just over 14 gigawatts of new capacity. While wind energy technology has remained the dominant one in India’s renewable energy sector, it has witnessed a slowdown in new capacity addition due to the government’s shift towards a competitive auction regime in early 2017. With an installed capacity of 37.5 gigawatts at the end of 2019, wind energy could soon lose its position as the leading renewable energy technology in India to solar power.

Power generation capacity based on biomass and biofuel cogeneration more than doubled from 4.4 gigawatts to 9.8 gigawatts during the same period. The growth in capacity from these technologies has, however, slowed down sharply with addition of just a gigawatt of new capacity since March 2018.

Large hydro (more than 25 megawatts) capacity also saw poor capacity addition growth over the last five years. Only 4 gigawatts of new capacity was added during the period. Nuclear power fared even poorly with only a gigawatt of new capacity added.

Fossil fuels (coal, diesel, and gas) witnessed the addition of 42 gigawatts of new capacity over the last five years. Coal was, understandably, the dominant technology, adding 41 gigawatts of net capacity with the retirement of several coal-fired power plants. Less than two gigawatts of gas-fired power capacity could be added, as the industry failed to find any takers for costly power or any meaningful support from government policies. Diesel-fired capacity declined from 1,200 megawatts to 510 megawatts during this period.

In 12 of the 18 quarters ending December 2019, capacity added through renewable energy technologies exceeded that based on fossil fuels. In March 2015, the share of fossil fuels in India’s installed capacity was 69.5% which dropped to 62.6% in December 2019. The share of renewable energy technologies increased from 13.2% to 23.3% during the same period.
India Added 50 Gigawatts Of Renewable Energy Capacity In Last Five Years | CleanTechnica
 
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India Allocates 1.2 Gigawatts In World’s Largest Renewable Energy Storage Tender
The Solar Energy Corporation of India (SECI) has successfully concluded world’s largest renewable energy-cum-storage tender. The agency allocated 1.2 gigawatts of renewable energy capacity among two of India’s leading developers.


Image: Zach Shahan | CleanTechnica.com

Greenko Energy Holdings and ReNew Power secured 900 megawatts and 300 megawatts of renewable energy capacity in a first-of-its-kind tender issued by SECI last year. As per the conditions of the tender developers are required to supply firm renewable energy throughout the day. Developers were required to bid separate tariffs for supplying power during peak and off-peak periods. Peak period constitutes 11 hours in a day.

Greenko Energy Holdings has secured rights to develop 900 megawatts of capacity with a peak period tariff of Rs 6.12/kWh (US¢8.55/kWh) and an off-peak period tariff of Rs 2.88/kWh (US¢4.02/kWh). ReNew Power secured a capacity of 300 megawatts with peak period tariff of Rs 6.85/kWh (US¢9.57/kWh) and off-peak period tariff of Rs 2.88/kWh (US¢4.02/kWh). To meet the firm supply of 1.2 gigawatts, developers would be required to have storage capacity of 3,000 megawatt-hours.

During the technical bidding round Greenko Energy had bid for 900 megawatts, ReNew Power for 600 megawatts, and HES Infrastructure for 120 megawatts. While ReNew Power halved its bid in the financial bidding round, HES Infrastructure did not participate at all.

While ReNew Power is not known to have worked on any large-scale energy storage projects, Greenko Energy Holdings perhaps the most experience in this field among all Indian developers. We had reported earlier that the company is working on two renewable energy-cum-storage projects in the states of Karnataka and Andhra Pradesh. In each of the projects the company will set up 2 gigawatts of solar and 2 gigawatts of wind energy capacity. While the project in Andhra Pradesh will have pumped hydro storage capacity of 8,000 MWh, the project in Karnataka will boast a pumped hydro storage capacity of 9,600 MWh.

Greenko Energy Holdings, which bought out SunEdison’s India assets, is backed by the likes of Singapore government-backed group GIC and the Abu Dhabi Investment Authority (ADIA). ReNew Power, one of India’s leading renewable energy companies, counts Goldman Sachs, ADIA, Canada Pension Plan Investment Board, and Global Environment Fund as its investors.
India Allocates 1.2 Gigawatts In World’s Largest Renewable Energy Storage Tender | CleanTechnica
 
India concludes world’s largest renewables-plus-storage tender at $0.0566595/kWh
Pumped hydro and battery projects, coupled with renewables, offer the world’s lowest peak clean electricity tariff. The tender, which received bids for for 1.62 GW of capacity against the 1.2 GW sought, saw Greenko secure 900 MW of pumped storage capacity and Renew Power 300 MW of battery storage.
India concludes world’s largest renewables-plus-storage tender at $0.0566595/kWh

SECI concludes world’s largest renewables-plus-storage tender at Rs4.04/kWh
Thermal power has had its day in India, the head of a national PV trade body has claimed after the Solar Energy Corporation of India (SECI) concluded what it called the world’s largest renewables-plus-energy-storage capacity tender.

The procurement exercise was held to contract 1.2 GW of capacity in the form of assured supply of 600 MW of clean power for six hours daily during peak demand hours – 5.30-9.30am and 5.30pm-12.30am – on a day-ahead, on-demand basis. The successful bids comprised at least 3 GWh of energy storage capacity – pumped hydro or battery storage – plus associated clean energy generation assets.

The tender was staged to secure reliable, fixed-price energy supply for state electricity distribution companies otherwise hidebound to the vagaries of spot markets.

The procurement round was oversubscribed, with bids received for 1.62 GW of capacity and Hyderabad-based developer Greenko secured 900 MW of pumped-storage project capacity with the most competitive tariff bid for the clean energy to be supplied. Greenko offered a weighted average tariff of Rs4.04/kWh and a quoted peak tariff of Rs6.12/kWh.

Haryana-based ReNew Power secured the remaining 300 MW of capacity with a weighted average bid of Rs4.30 and quoted peak price of Rs6.85, marking a world record for renewables-plus-battery storage capacity.

For the renewable energy supplied during off-peak hours, SECI will pay a pre-specified tariff of Rs2.88/KWh. The tariffs granted will be paid over a 25-year period.

The Indian government has mandated all electricity distribution companies to source at least 21% of their energy from renewables by 2021-22 and has said grid operators will not incur transmission charges or losses on clean power.

“With this, thermal power in India has become priced out,” said Pranav R Mehta, chairman of the National Solar Energy Federation of India. “The most recent thermal power tenders in the country have yielded levelized tariffs in the range of Rs5-7/kWh ($0.0694-0.0972) at 85% annual PLF [plant load factor – a measurement of the output of a power plant compared to its maximum generation capacity]. The peak tariff under this SECI tender is highly competitive vis-à-vis the recent peak tariffs in international markets like [the] USA (Rs8-9/kWh or $0.1111-0.125).

“This is also lower than the recent stressed thermal projects tender conducted by [state-owned power trading company] PTC, where the tariff discovered was Rs4.24/kWh ($0.0589) for only [a] three-year supply [contract], whereas the tariff discovered under this tender is fixed for 25 years.

“With the peak time-of-day tariffs becoming more and more pronounced in India, these discovered tariffs will be value accretive for DISCOMs [electricity distribution companies], and are already much lower than the ever-increasing commercial and industrial consumer tariffs in India.”
SECI concludes world’s largest renewables-plus-storage tender at Rs4.04/kWh
 
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