Climate Action 2017-2018

ENERGY
100
80
Figure 1: India’s 2022 renewable energy target
20 GW
Utility scale
solar projects
Capacity (InGW)
60
40
20
0
5 GW
10 GW
60 GW
40 GW
40 GW
Rooftop
solar projects
Ultra mega park
solar projects
Source: ET Energyworld
Small Hydel Projects Biomass Wind Solar
Source of renewable energy
Driven from the highest level of
government, all actors sought to align
themselves quickly to the needs of the
sector.
negotiation by procurers in other locales
as well, pushing developers to lower
prices, even below their winning bids!
In some instances, existing contracts
have been reopened for re-negotiation.
As a result of such factors, financial
institutions have become wary of
renewable energy projects and are not
enthusiastic about lending support to
them. The market is thus beginning
to see a number of winning bidders
seeking to sell their projects even before
starting work on them.
The poor state of the centralised
grid infrastructure as well as the poor
financial health of the renewable energy
procurement entities (the distribution
companies) has further eroded the
confidence of financial institutions on the
risks, and the financial viability, of such
projects. Unfortunately, the government’s
attempts to address these bottlenecks
seem to be too little and too late for some
of these projects.
The solar rooftops programme in the
country is not taking off at the desired
speed, for many reasons ranging from
practical problems on the ground from
taxation structures, to multiple uses of
roof space, a weak confidence in systems
and performance as well as a reluctance
on the part of distribution utilities to
support this scheme.
Preparation on the supporting
environment is often inadequate to allow a
timely delivery of desired outcomes – be it
related to buy-in from state governments,
land acquisition, strength and modernity of
the grid infrastructure, presence of market
actors along the value chain or indeed
the capacities that exist within policy and
regulatory bodies to quickly and effectively
deal with emerging challenges.
And finally, the ability may be lacking
to cope with the rapidly evolving
technological solution space and the
capability to be able to look at integrated
systemic solutions.
Despite the daunting difficulties, it is
also a fact that India will still have a much
larger renewable energy capacity in
place by 2022 than it would have without
such ambitious goals. It has proved to
the world that when political ambition
exists then outcomes will follow willy-nilly.
The pressure to deliver on the ambition
combined with the need to keep tariffs low,
in a price sensitive economy like India’s,
has forced it to adapt global innovations
as well as to innovate itself on things such
as the reverse bidding process for price
discovery. Driven from the highest level
of government, all actors sought to align
themselves quickly to the needs of the
sector and challenges are being addressed
as they emerge.
Could India have done things differently?
Yes, it could have ensured a more systemic
planning and roll-out of activities; it could
have built capacities in the policy and
regulatory bodies, institutions and other
stakeholders first; it could have examined
and refined the various laws that would
have enabled a smooth implementation of
rooftop solar systems; and it could have
sought to strengthen and modernise its
grid infrastructure, among other measures.
But a sequential approach of this kind
would not have guaranteed a problem-free
transformation of the economy towards
greater renewables, nor would it convey the
sense of urgency with respect to climate
action that India is succeeding in doing –
for its own populations and the world.
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