The prospects for solar after the Indian elections
Narendra Modi’s BJP party is seeking re-election with the aim of ensuring the electrification of all railways by 2022 and turning renewable energy a popular movement with steps including an emphasis on solar farming. Even if the elections spring a surprise, however, the renewable momentum is unlikely to slow as no government can afford to roll back the clean power tide.
The momentum for renewable energy growth in India will be propelled by the sheer force of the energy transition.
Image: Adam Jones/Flickr
The next growth segment for solar in India is likely to come mainly on farms and railways, provided the Narendra Modi-led BJP/NDA government is re-elected to the national Assembly – the outcome which appears most likely, according to analysts at Wood Mackenzieand Fitch Solutions.
Still proclaiming its confidence in achieving 175 GW of renewable energy capacity by 2022, despite doubts in many quarters, the incumbent government aims to turn renewables a popular movement.
“We have achieved cumulative installed renewable energy capacity of 76.87 GW as on February, 2019 and are on track to achieve our goal of 175 GW by 2022” stated the BJP’s manifesto for a voting process that will last six weeks. “We view solar energy as an additional source of income for farmers and will encourage solar farming on a massive scale so as to enable the annadaata [farmer, or food provider] to become [an] urja-daata [energy provider].”
The government also intends to ensure electrification of all railway tracks by 2022.
In September, the cabinet committee on economic affairs, chaired by Modi, approved a proposal to electrify the remaining non-electrified, broad-gauge routes of Indian Railways. Electrification is expected to reduce the consumption of high-speed diesel oil by about 2.83 billion litres per annum. The resulting fuel bill savings could reach Rs13,510 crore per year.
Impact of polls
While both Wood Mackenzie and Fitch Solutions analysts predict a win for the Modi-led BJP/NDA coalition, they also expect renewable reforms to continue even if the vote springs a surprise.
Wood Mackenzie’s Andrew Harwood and Verisk Maplecroft’s Miha Hribernik predict the incumbent prime minister will stay in power for another five years, and feel “a second term for Modi would likely maintain the momentum for major energy sector reforms, such as policies to boost exploration and production, gas pricing reform and deregulation”.
“Even with an official opposition in place, it is unlikely that these reforms would be reversed,” they added. “It could, however, lead to more prolonged discussions on reconciling India’s clean energy commitments with economic growth priorities and appetite for coal to meet energy demand.”
Fitch Solutions analysts stated: “The strong renewables growth has been seen as a key marker of Modi’s power sector reform success and we believe the Modi government will seek to overcome some of these potential rising costs through the provision of preferential policies and increased funding and subsidies.
No backsliding
“Should the elections spring a surprise, any new government would be unlikely to renege on renewables policies.”
National Solar Energy Federation of India (NSEFI) chairman Pranav Mehta said: “As a responsible democracy, India will continue to be committed to [the] Paris Climate Agreement. The momentum for renewable energy growth will continue by [the] sheer force of [the] energy transition. However, there may be some internal program implementation policy corrections by the new government. NSEFI will continue with its efforts to stress these points and advocate policy corrections based on the learning so far.”
Sunil Jain, CEO of Hero Future Energies, believes renewable power is no longer dependent on party politics in India. “Renewable is now a phenomenon in itself and it’s very difficult to stop the deployment irrespective of the government in power,” he said. “Since it is cheaper than coal and is also green, it makes sense for utilities to buy renewables.”
However, “the pace for future growth and flow of investments will depend on policy decisions and the new government’s commitment and willingness to promote this sector”, according to Amit Gupta, director of legal and corporate affairs at Vikram Solar.
“We can all recall that soon after assuming office, [the] current government did a wonderful job by steeply revising the targets from then-20 GW to 100 GW [of] solar installations by the year 2022. Not only this, the untiring efforts and policy decisions undertaken by the government over the last five years were commendable as they placed India in a global leadership position in … renewable energy,” Gupta added. “[The] establishment of [the] International Solar Alliance was also looked upon as another landmark success of the Indian government to highlight its global initiative and contribution in [the] renewable energy sector.”
Expectations
Gupta said he expects the new government to focus on promoting the manufacture of renewable energy equipment and mass-scale energy storage solutions.
“India is well on its track to meet solar installation targets but it is still lagging behind in terms of developing manufacturing capacities for renewable energy equipment,” he added. “For India to become a world leader in solar energy, immediate steps to develop [a] robust and sustainable ecosystem for manufacturing solar equipment are also required.
“Currently, India’s solar PV cell manufacturing capacity stands at 3.1 GW, whereas solar PV module manufacturing capacity stands at 9 GW against the demand of approximately 20 GW every year, based on targets for the year 2022.”
“India unarguably has [an] huge opportunity to tap [into] the solar manufacturing space and it seems to be an opportune time for India to build a robust manufacturing base for solar energy equipment.”
Hindustan Powerprojects CEO Lalit Jain expects amendments in tariff guidelines and favorable energy storage policy to drive greater uptake of renewables
“Just before the announcement of general elections, [the] cabinet had passed new hydro policy,” he said. “We expect follow-up notifications [and an] amendment in tariff policy etc to be done once the new government is formed. This should provide the much awaited relief to the hydro sector. We also expect favorable policy on energy storage to be announced. These two steps shall allow utilities [and] consumers to start using large [proportions] of renewable energy to meet their requirements, thus opening up the doors of taking solar and wind project implementation to the next level.”
Source:PV Magazine
