Localising supply chains needed for long-term success, say RE leaders

Ultra large projects and rising domestic production to replace traditional power in near future

Supply chain localisation and sustained government support for key segments of domestic manufacturing would be needed for long-term success of renewable energy (RE) in India, sector leaders said at the Business Standard’s Manthan on Friday.

 

Speaking during a session exploring whether India can champion itself as a renewable energy hub, Adani Green Energy chief executive officer (CEO) Amit Singh said while India has a lot of supply of modules at 60-plus gigawatts (Gw), it hardly has any supply chain resiliency in crucial categories such as ingot wafer and polysilicon refining.

 

“Nobody can be selfish. I think we need to make sure that at the inception and growing stage of the manufacturing sector they need to be supported. Some barriers need to be put in place so that they can grow and reach a scale economically where they can be as competitive as the rest of the world,” Singh said.

 

The local content of every megawatt is important, Girish Tanti, cofounder & vice-chairman at the Suzlon Group said.

 

“Unlike in the solar sector, where average incidence of local content is still about 20 per cent, in the wind sector, the average local content for the entire industry is already about 64 per cent. And, Suzlon has been running in excess of 75 per cent for more than a decade,” Tanti pointed out.

 

He also said that the country needs to keep in mind the security risks associated with imported technology and equipment.

 

A focus on domestic manufacturing has led to domestically produced modules, and the next path is to complete the entire value chain, said Deepesh Nanda, managing director (MD) & chief executive officer (CEO), Tata Power Renewable Energy Ltd.

 

“The next step is to have domestic cells. Manufacturing capacity is being added in a very systematic, calibrated fashion. We expect that by the same time next year, we should have 25 Gw of capacity on cell,” he added.  

 

Large projects needed

 

The leaders also argued that while renewable energy is rising at an accelerated pace, there is a need for undertaking ultra mega scale projects. “The demand is growing rapidly, but we are still far from where we need to be. That is why we have taken on the challenge of a 30 Gw plant at Khavda, Gujarat, which is well on its way. Today, we reached a milestone, crossing 12 Gw in total portfolio, and we aim to reach 50 Gw by 2030,” Singh said.

 

Set to be the world's largest renewable energy project, the company has operationalised 2 Gw at Khavda till date. 

 

India will hit 500 Gw of renewable energy by 2030, and potentially 650 Gw by 2032, Nanda said.

 

The industry is also ready to take on traditional power sources, he stressed. 

 

“With the advent of complex tenders and the combination of wind, solar and battery storage, and pumped hydro in the near future, I think we can replace the thermal electron one by one, at a significantly lower cost,” Nanda said.

 

“We have 6 Gw of operational projects and are building another 6. This has been done on the back of manufacturing, again supported by the Indian government. So again, full marks in terms of the production-linked incentive (PLI) scheme,” he added.

 

The country is self reliant in wind technology, and will account for 10 per cent of global wind equipment supply by 2030, Tanti said.

 

He said a rapid increase in production has led to the total manufacturing capacity of the wind sector reaching 18 Gw, or 3-4 times the annual requirement of India. 

 

Pointing out that the sector is also able to supply globally, Tanti stressed the 21 Gw of capacity that Suzlon has installed worldwide, with almost 5 Gw plus installed in about 17 countries across the globe.

 

Myriad challenges

 

Nanda also flagged the need for significant investment in research and development, given the high rate of obsolescence of technology.

 

“India generates 18-20 GWs of solar energy annually, and we must ensure our manufacturing sector supports this growth.  Unfortunately, the industry has often fallen short in this area. The PLI scheme has been beneficial, offering incentives worth ₹2,000 crore — an advantage few other countries provide,” he said.

 

The known wind potential of India going up by three times over the past three decades is due to higher research into the geography of the country and wind science, Tanti said.

 

He argued that the same is needed for solar distribution and consumer usage patterns. Acquiring large parcels of land for renewable energy projects remains particularly difficult for developers, while the lack of skilled manpower constricts plans, Singh said.

 

He added, “We still suffer from not having adequate resources or skilled resources available to us to grow.”

 

The corporate leaders also pointed out the challenge of spreading awareness about the power of the renewable sector to create a large number of jobs across the country.

 

“It will take a village for us to spread the word, the opportunity in terms of jobs,” Nanda said 

 

Infrastructure bottlenecks, uneven availability of financing for the RE sector as well as for large scale projects and stability in policy remain other key demands.