Solar Alliance

Source: The Hitavada      Date: 06 Apr 2018 11:34:46

By DR. D. K. GIRI

INDIA’S leadership of International Solar Alliance and the maiden Summit on solar energy held last month did not receive adequate media attention. It is understandable as the media is less attracted to issues it cannot sensationalise, and to those driven by quiet diplomacy. India became the head of International Solar Mission that should ideally comprise 121 countries out of all of 193 in the world. These 121 countries blessed bountifully by the Sun are situated between the Tropic of Cancer and Capricorn. The leadership came to India in the last Climate Conference, the Paris Summit in 2015. As the ‘mighty’ US withdrew from the Paris Agreement, India reiterated its commitments to climate change collaboration at the international level, and grabbed the stewardship of the Solar Mission.


To be sure, India steering the Solar Mission is great accomplishment as well as an opportunity for it to occupy the world stage. As a growing economy, India’s energy needs are commensurately increasing, and as such, it has structural deficits in the energy sector. Therefore, for itself, to make up the gap, as well as to meet the growing demands, India needs to harness the renewable energies, mainly solar. New Delhi promises to enable other developing countries to utilise the solar energy. In the Summit held in Delhi, Prime Minister Mr. Modi evoked the Vedic reference to Sun as the soul of the Earth and the most vital energy provider. He urged the solar nations to exploit this natural resource in plenty and pledged to support 27 solar projects across the world. New Delhi has committed 27 million USD to the 1 trillion USD budget of ISA, in addition to meeting the recurring expenses from 2016-17 to 2020-21. It will also provide 500 training slots to the countries engaged in Solar Mission. Notably, France has promised 700 million Euro.The ISA secretariat is located in New Delhi and its Director General is former Secretary of Government of India Upendra Tripathi. A perceptive officer, Tripathi said, “The ISA aims to scale up the use of solar energy. Everyone has access to solar power, but the ability to exploit solar energy is not equal.” The Alliance wishes to play the enabling role. It will help the countries meet the twin challenges of accessing credit and acquiring the appropriate skill-sets.
It is noteworthy that India has demonstrated its intent and ability to exploit solar power. It costs only Rs. 2.5 per unit production which is comparable to conventional thermal power. In 2014, India produced 3 gigawatt (GW) of solar power, which over the years grew seven-fold to 20 GW and plans are afoot to quintuple that total by 2022. This is 100 GW of solar energy out of the RE basket of 175 GW, the others are 60 GW of wind, 15 of the rest. This is a fast pace India has adopted, which will make it the number two player in a year or so, emphatically remarked, Tim Bukleyo of Australia-based Institute of Energy Economics and Financial Analysis, a Think Tank.


Admittedly, there are quite, a few bottlenecks in India’s solar journey. One is the slow implementation of regulation, second, the awareness of people of the advantage of solar energy, carbonless energy production etc., third, technology transfer through a decentralised approach, fourth connecting to the thermal grid for onward transmission.Many of those challenges are being successfully addressed. There has been spectacular policy evolution, a clear road map of late, like the creation of Solar Energy Corporation of India which will steer the solar ship. This has lent encouragement to power companies to bundle renewable power with the base load. On the technical front, the plug and play models, make up for the grid connectivity. If some of the above success stories from India and elsewhere are replicated across the ISA territory, the mission would have been largely accomplished. A word on international mission, Solar Alliance is an international treaty-based organisation with 121 potential members. Already, 61 countries have joined and 31 have ratified the framework. ISA aims to produce one terawatt of solar energy by 2030. It will need 1 trillion USD. A tall order, but not impossible to achieve. India and France are leading but they will have to overcome quite a few challenges.


To begin with, mobilising finances is a major challenge. Affordable and innovative financial mechanisms have to be put in place. Second is the application of solar energy in the agriculture sector, a vital one in many ISA countries, through improved technology. Third, the solar countries will have to formulate and implement pro-solar energy policies, taking the cue from those that have done it. India is the lead country in this aspect. Fourth, is streamlining the payment procedures. Power projects with even PPAs – Power Purchase Agreements suffer inordinate delays in receiving payments. This will deter the investors. Timely payments to secure cash flows and effective financial dispute settlements will certainly spur the market. Fifth, aggregation of the small-scale projects like the off-grid and roof-top solar can be leveraged for accessing finances from capital markets.


However, the efficacy of such financing like green bonds and securitisation etc will hinge on the ability of the ISA countries in carrying out necessary financial market reforms. For example, the banks to be given green finance targets like that of priority sector funding in India backed by concessional finance will help a continuous capital flow to the solar projects. Further, in order to make the solar projects bankable, a one-stop solution like the solar park developed in India should be followed.Any international engagement is political, diplomatic, strategic, economic, and developmental, all rolled into one. It is like the Chinese proverb, “if you pull a twig, the entire bush is shaken.” For India to promote the Solar Mission, it will tread upon the aspects of international engagement, but let us remember that energy is a cross cutter. Much of the conflicts around the world are about energy, a vital resource for growth and development of a country. If India can create solar energy as a viable alternative to the conventional energies for 121 countries it would be a world power enabling the ISA member countries in creating bankable solar markets, unlocking their solar potential would be a great contribution India could make to these countries. (INFA)