11 Months agoIndia is harnessing its sun energy potential, set to become the world's third largest solar market this year. Read on!
Power Scenario - India
India’s energy consumption is set to grow at a CAGR of 4.2% till 2035 – faster than all major economies of the world. As Asia’s second-biggest and the world’s third-largest energy consumer, its share in global energy demand is expected to rise to 9% by 20351. The country boasts of having the world’s fifth-largest capacity for power generation, with no signs of production slowing down. It also has one of the most diversified power sectors in the world, with both conventional and non-conventional sources being used to meet its energy needs. The total installed power capacity in India, as of March 2017 stands at 326.85 GW.2
Electricity consumption in India is expected to rise in the years to come. The expected surge in consumption is most likely to be propelled by a growing economy, demographic expansion, urbanization accelerating the switch to modern fuels and the rise in appliance ownership (an additional 315 million people are expected to live in the country’s cities by 2040). Energy consumption per capita in India is still only one-third of the global average with some 240 million people having no access to electricity.3 There are hence strong reasons to expect continued growth in rapid demand. India’s need for new infrastructure is driven by a growing demand for energy-intensive goods, rising level of vehicle ownership, increasing industrial energy use buoyed by substantial growth in output of steel, cement, bricks and other building materials, and by the expansion of domestic manufacturing. The Make in India initiative, which aims to turn the country into a global manufacturing hub, will be a leading contributor to this demand because industry-led growth requires at least 10-times more energy per unit of value-added as compared to growth led by the services sector.
The Mushrooming Renewable Energy Sector
India’s current model of energy use relies primarily on non-renewable sources of energy, which have limited reserves. Also the country is, to a large extent, dependent on imports to meet these energy requirements, which has been sticky at nearly 35% of its annual primary commercial energy demand over the last several decades.
Meeting the ever increasing energy demands in the future with such a model will not only be a financial burden but also questionable considering the rapidly dwindling global supply of fossil fuels. When environmental concerns such as carbon emissions and the ecological footprint are also taken into consideration, the viability of this model plunges even further. In such a scenario, India’s renewable energy potential appears promising.4 India’s renewable energy contribution stands at 57.26 Gigawatt (GW), which includes 32.3 GW of wind power.5 The UN Environment Program’s (UNEP) ‘Global Trends in Renewable Energy Investment 2016’ Report ranks India among the top ten countries in the world investing in renewable energy. The Government has set a target to achieve the proposed renewable energy capacity addition of 175 GW by 2022 – 100 GW being from Solar Power alone. This happens to be the largest every capacity addition planned. The country’s aspiration to achieve 40% power installed capacity from non-fossil based energy resources by 2030 has made its nascent solar power industry the destination for global investors, creating growth opportunities for a host of industries.6
Harnessing India’s Solar Energy Potential
Solar power has always been an integral component of the Renewable Energy sector. The massive upscaling of the solar power generation capacity target 100 GW by 20227 is likely to act as a catalyst in the manufacturing of equipment, panels, and supply of services and technology used in the industry.
The last two years have witnessed considerable efforts being made to harness India’s solar energy potential.
- There has been a 243% increase in solar power capacity addition (6381 MW) during the last two years.
- The world’s second largest 648-MW solar power plant, comprising 2.5 million individual solar modules was unveiled in Tamil Nadu in September 2016.8 This is in sync with Prime Minister Narendra Modi’s International Solar Alliance initiative, which was signed by over 121 countries with an aim to improve quality and reduce the cost of solar energy in developing countries.9
- 3,019 MW was the solar capacity addition in 2015-16 – highest ever that India has seen.
- At least 50 solar parks with an aggregate capacity of 40,000 MW were sanctioned for 21 states.
- A total of USD 154.87 was released to the Solar Energy Corporation of India (SECI), a Public Sector Undertaking (PSU) dedicated to the solar energy sector. The fund is to provide support to central public sector units to set up over 1,000 MW grid-connected solar photovoltaic power projects, establish 25 solar parks each with a capacity of 500 MW and to set up over 300 MW of solar power projects by defence establishments.10
- 31,472 solar pumps were installed in FY 2015-16, much higher than the total number of pumps installed during the last 24 years since 1991.11
- In 2016, Prime Minister Narendra Modi also gave his nod for the utilisation of 400 hectares of uncultivable farm land in Jetsar, Rajasthan, to set up a solar power plant of a capacity exceeding 200 MW.12
- The Government approved USD 769 Million for the implementation of grid-connected rooftops systems, over a period of five years up to 2019-20 under the National Solar Mission.
- A target of 40 GW grid connected solar rooftops to be achieved by 2022 was set. So far, about 500 MW have been installed and about 3,000 MW has been sanctioned, which is under installation.13 This move is likely to contribute to the long-term energy security of the country and promote ecologically sustainable growth by a reduction in carbon emissions.
- With solar tariffs falling to an unprecedented low of INR 2.97/unit, the generation capacity is expected to grow at a faster pace to meet the growing demand for energy.14
Increasing demand for energy in the country has prompted the Government to ramp up solar capacity to reduce reliance on fossil fuels and move towards clean energy. India has an estimated renewable energy potential of about 900 GW from commercially exploitable sources, 750 GW being from solar power.15 According to a study conducted by International Council for Research in International Economic Relations (ICRIER), access to solar power will also help water crop fields as well as build cold storages.16
To provide a fillip to the sector, various incentives have been announced by the government. Renewable energy projects have been included in priority sector lending norms of commercial banks. Clean environment cess has been doubled to promote use of renewable energy sources. The renewable energy sector has been re-classified as ‘white category’ which implies that setting up of solar and wind power plants will be exempt from seeking environmental clearances from Ministry and consent from State Pollution Control Boards.
With the sector growing at a rapid pace, there is a substantial need to meet the demands of skilled manpower. In May 2015, the government set a target to train 50,000 people to be called ‘Surya Mitras’ in the solar energy sector by 2019-20.17 18
The solar energy sector will drive India’s vision to achieve a green future by ensuring energy security and lower fossil-fuel imports which will also help reduce the fiscal deficit. With India forecasted to become the third-largest solar market this year, it looks like the sun will never set on the country’s solar industry.