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NDA's 100-Gw solar power plan to face a test of credibility

The solar power target was announced by PM Narendra Modi to prove the NDA govt's ambition to ramp up renewable energy and fight climate change

Nitin Sethi  |  New Delhi 

The National Democratic Alliance (NDA)'s ambitious promise of setting up 100 Gw of capacity by 2022 will soon be tested for its credibility. Is it more an aspirational announcement or backed up by a well thought out business plan? The question will have to be answered latest by October, when India faces a deadline to provide international commitments to reduce emissions under the 2015 global agreement.

The target was announced by Prime Minister to prove the government's ambition to ramp up renewable energy and fight Since then it's been showcased very often by Power Minister and Environment Minister domestically as well as in the international arena.

By October, along with other countries, India is required to formally put forth targets to reduce emissions that shall be enshrined as the country's commitment to fight between 2020 and 2030. The target has to be submitted before the UN Framework Convention on Climate Change - where India is already under focus for its role on climate change negotiations. These targets would require working out how much energy India would produce from renewable resources in order to reduce emissions that emanate from burning fossil fuels like coal.

But the Indian administration is now caught in a bind, with NDA's ambitious announcement of putting up 100 Gw of capacity by the end of the decade. Till date, no other country has achieved the kind of quantum leap in solar capacity this target sets up for India. At present, India has about 3 Gw of solar power capacity.

Initial plans suggest the government wants to make a sevenfold jump in capacity addition in the first year itself, up from 1 Gw per year to 7 Gw a year. This includes a 100-fold increase in roof-top solar. The year after, in 2016-17, the government wishes to add 18 Gw capacity. As Bridge to India, a renewable energy consultancy puts it, "No country has ever added 18 Gw of solar in a year."

The government, though, remains gung-ho about the target, partly based on the rapid fall in prices of the technology.

But, if this is the government's announced domestic target till 2020 or so, India will have to provide a yet bigger and more ambitious target under the global climate agreement for the period between 2020 and 2030. A number that the government has not even begun thinking of as yet.

"Let's say we are in a tricky position right now and we should carefully assess if this 2022 target of 100 Gw is an aspirational target really to provide confidence to the market of the path India is embarking on," says a senior power ministry official.

Another official suggested ways in which India could secure some cushion space at the international arena and not give the 100-Gw solar power target with such absolute determination as has been professed domestically. "If you look at China it has said it is likely to peak its carbon dioxide emissions by 2030 and intends to try to peak early. We could also look at a range to provide with an aspirational target for our numbers and contributions."

Environment Minister has laid on record the preliminary ideas about how India could provide these international commitments. He said India could look at one set of targets that it would achieve on its own and others that India would achieve with adequate financial and technological support from the developed countries. But in reality little is expected from developed countries in terms of fiscal transfers from developed countries or sharing of technology.

"Solar power addition is one of the costly ways to reduce emissions. Perhaps internationally we should be looking at providing numbers for the low-hanging technological fruits such as energy efficiency. Domestically one can do what is feasible and important for energy security," said another senior government official involved in the process of determining these targets.

But they all admit that the 'loud' political announcement of 100 Gw of solar by 2022 puts India in a corner. "You cannot afford to put a number that is not in the realm of the credible in the international arena. We are yet not sure what will be the degree of 'bindigness' of these targets," said one of the officers. "But we have time to think this through and the consultations between relevant ministries are on," he added.

The framework of the Paris agreement continues to be under negotiations. One of the key discussions in these negotiations is how legally binding these targets and commitments would be under the new global agreement. Some, such as the US, have suggested that the targets should only be domestically binding and countries should not be hauled before the international community for slipping from them.

But, even domestically, there are questions of capital costs and consumer level prices that need to be answered. The government's ballpark figure suggests that $100 billion of investment would be required to meet this solar power capacity addition. Another number being bandied out is Rs 10 lakh crore of investment for 100 Gw of solar and 60 Gw of wind power capacity addition by 2022. This does not include large costs of providing grid evacuation and stability for the intermittent power supply.

CEEW, a non-profit working on climate change and energy in its recent study, says, "Grid integration costs include a range of investments spanning from backup capacity of gas to storage. With increasing contribution from renewable energy, grid integration costs increase in a non-linear manner and account for nearly a third of the total incremental cost with 150 Gw of solar energy in the electricity grid." It calculated that if India was to achieve the 100 Gw solar power target by 2022 and ramp it up to 150 Gw by 2030 along with another 170 Gw of wind the costs would be upwards of $719 billion. The government at the moment has announced 60 Gw of wind power capacity addition by 2022 as well.

Latest by October, the government would have to either make a huge leap of faith and commit to adding more than 100 Gw of solar power capacity by 2030 or it would need to find enough sophisticated caveats to its announcements in order to protect India's credibility amongst the international community.

First Published: Fri, February 13 2015. 00:26 IST