Vandana Gombar: Adding 9 gigawatts to 9 gigawatts

2017 will be the year of solar in India, thanks to aggressive target, policy support

The story of 2017 will be a story of solar in India: the country will add, this year, as much capacity as it has added since the first solar plant was set up. About nine gigawatts (Gw) of new capacity will be added to the installed solar capacity of about nine Gw, thanks to an aggressive target (100Gw by 2022), supportive policy environment and the falling price of solar panels.

Solar — Nine-gigawatt expansion: India is expected to add about nine Gw of solar plants in 2017, including smaller-scale rooftop solar plants. The final number may depend on the impact of the goods and services tax when it is implemented, as well as the Budget proposals. Project development will also get a boost from the expected reduction of panel prices. Project activity is proceeding at a good pace: The Solar Energy Corporation of India has scheduled a pre-bid meeting later this week for developing 1,000 megawatts (Mw) of rooftop projects on government buildings.

Wind — lagging solar: Less than three Gw of wind power are expected to be added this year as incentives decrease (accelerated depreciation) or lapse (generation incentive). This is also the year that the first competitive auction for 1,000Mw of wind projects will be held. The positive news is that plants that were facing curtailment are reporting improved offtakes, as the financial position of distribution companies improves.

Storage: As the penetration of renewables increases, there is a need to upgrade the power system to accommodate them. The Central Electricity Regulatory Commission last week issued a discussion paper on electricity storage in India, invited views from stakeholders on technologies and tariffs, and asked whether electricity storage is required at all in the Indian power system. It also detailed the electricity storage projects that are already available in the country in the form of pumped-storage hydro plants.

Tesla and the Gigafactory: The headline in the rest of the world was the start of operations at Tesla’s giant Gigafactory, establishing the US in an industry currently dominated by China, Japan and South Korea. The lithium-ion battery cells being produced there will initially be used in Tesla’s storage products, and subsequently in the “Model 3” electric vehicle. The expected fall in the price of batteries, due to economies of scale, is expected to provide a boost to electric vehicles and storage. The factory will also set another benchmark: “Once complete, we expect the Gigafactory to be the biggest building in the world,” Tesla said in the statement announcing the start of production on January 4.

Biomass: This could also be the year that the world looks at biomass afresh, with China announcing an investment of almost six billion dollars in that sector by 2020. Japan has over three gigawatts of biomass projects that have secured feed-in tariff approval. India is lagging behind its biomass capacity addition target in the current financial year.

The author is editor, Global Policy, for Bloomberg New Energy Finance; vgombar@bloomberg.net