China frequently provides the headlines in the clean energy world. The
largest clean energy investor managed to raise eyebrows once again last
month when it announced its new 2017 targets: 70 gigawatts of installed
solar capacity (more than triple the current level), 150 gigawatts of
wind and 330 gigawatts of hydropower.
In contrast, India plans 20 GW of solar by 2022, and adds less than 5
GW of clean energy capacity (solar, wind, small-hydro and biomass) per
year. The first thing the prime minister, Narendra Modi, needs to do is
raise the scale of ambition in the sector. If the stated intent of
providing 24X7 power to every Indian is to be met, power supply will
have to at least triple by 2030. There is room enough here for multiple
sources and technologies.
I hear the sceptics saying: can India really afford renewables? The answer is an unequivocal yes, and the reason is that it can be cheaper than many conventional sources. The earlier model of subsidised coal-led power development is not delivering. Power supply is inadequate and unreliable for the user, while the power generators have to contend with unpaid bills.
Most Indians would be familiar with the sound of a generator which burns diesel to fill the power-supply gaps in homes, offices and small enterprises. In my erstwhile residence in the National Capital Region, I was paying Rs 15 per unit of power from a generator. Developers offered to supply solar power at almost half the price in recent auctions ( Rs 6.50-8 per unit). Solar power trumps liquid fuel, First Solar's chief executive officer James Hughes told Bloomberg New Energy Finance recently.
"Anywhere in the world with reasonable irradiation, where people are burning liquid fuel and I don't care whether that is kerosene or whether it is Bunker C [residual fuel oil], whether it is diesel or whether it is liquefied natural gas, if it is the source of your energy, then solar is likely to be competitive on an energy-only basis," he said. It is well known that the fuel cost per day for a burning a kerosene lamp is higher than the daily cost of a basic solar lamp. Does it not then put before us an option to solve the access and supply problem at one go?
What Investors Want
Investors are attracted by a market that has a growing demand for electricity and reasonable security of payment. There has been an implicit payment guarantee from the government for renewables, which is one of the reasons that India has had more of a success in attracting overseas investors in the clean energy sector than in the conventional power sector.
India's power tariffs have risen by 40% in the past five years, according to research by my colleagues in India. Average retail tariff in Delhi is Rs 6.50 per unit. Kerala stands out with the highest commercial tariff, of Rs 9.20 per unit, followed by Andhra Pradesh, at Rs 9. There are at least four other states where commercial tariffs are higher than Rs 7 per unit. This makes small-scale rooftop solar competitive without any subsidies.
I hear the sceptics saying: can India really afford renewables? The answer is an unequivocal yes, and the reason is that it can be cheaper than many conventional sources. The earlier model of subsidised coal-led power development is not delivering. Power supply is inadequate and unreliable for the user, while the power generators have to contend with unpaid bills.
Most Indians would be familiar with the sound of a generator which burns diesel to fill the power-supply gaps in homes, offices and small enterprises. In my erstwhile residence in the National Capital Region, I was paying Rs 15 per unit of power from a generator. Developers offered to supply solar power at almost half the price in recent auctions ( Rs 6.50-8 per unit). Solar power trumps liquid fuel, First Solar's chief executive officer James Hughes told Bloomberg New Energy Finance recently.
"Anywhere in the world with reasonable irradiation, where people are burning liquid fuel and I don't care whether that is kerosene or whether it is Bunker C [residual fuel oil], whether it is diesel or whether it is liquefied natural gas, if it is the source of your energy, then solar is likely to be competitive on an energy-only basis," he said. It is well known that the fuel cost per day for a burning a kerosene lamp is higher than the daily cost of a basic solar lamp. Does it not then put before us an option to solve the access and supply problem at one go?
What Investors Want
Investors are attracted by a market that has a growing demand for electricity and reasonable security of payment. There has been an implicit payment guarantee from the government for renewables, which is one of the reasons that India has had more of a success in attracting overseas investors in the clean energy sector than in the conventional power sector.
India's power tariffs have risen by 40% in the past five years, according to research by my colleagues in India. Average retail tariff in Delhi is Rs 6.50 per unit. Kerala stands out with the highest commercial tariff, of Rs 9.20 per unit, followed by Andhra Pradesh, at Rs 9. There are at least four other states where commercial tariffs are higher than Rs 7 per unit. This makes small-scale rooftop solar competitive without any subsidies.
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