Climate change has made its space in international policy debates since the last few years. It presents a difficult situation for emerging economies like India, where industrialisation is necessary to create additional jobs for the increasing number of unemployed youth.
In India, coal is a major contributor to power generation and the transport sector, both public and private, is largely dependent on fossil fuels. This dependence on fossils not only affects the country’s balance of payment but also exposes it to price volatility and supply constraints resulting from adverse global developments.
Among the fast growing nations, India is struggling with high pollution levels and increasing carbon footprints. Global warming, climate change, increasing carbon footprint, and greater dependence on fossil fuels have compelled India to increasingly adopt and promote renewable energy.
National Solar Mission, as a part of National Action Plan on Climate Change (NAPCC), was launched in 2010. In 2015, India revised its renewable energy targets significantly upwards to 175 GW by the year 2022.
During the Paris convention, India announced Intended Nationally Determined Contribution (INDC) and pledged that renewable energy would contribute to 30 per cent of India’s energy mix by 2030. Renewable energy contribution to India’s energy mix has reached 10 per cent and is increasing.
Solar and wind power, once considered costly, have now become affordable energy sources.Renewables are no doubt the future energy source for India, but they cannot replace fossils in the near term because of obvious reasons like sun’s energy is not available 24 hours a day, solar and wind generation are highly unpredictable and technological innovation is yet to develop an efficient solution to store power generated from renewable energy sources.
Though technological advancements are under way for efficient storage solutions, which will certainly revolutionise the renewable energy sector globally, dependence on fossils can only be reduced by gradually.
Currently, 85-90 per cent solar modules for deployment in India are sourced from China, Taiwan, Singapore and Malaysia due to cheaper imports and are thus vulnerable to global factors. It is largely felt that any adverse change in policy by these countries could derail the ambitious solar targets of India as it does not have its domestic manufacturing industry that can come to the rescue in case of large-scale interruptions.
India’s domestic cell-manufacturing capacity is 3.1 GW, of which, 1.3 GW is operational. Similarly, module manufacturing capacity is 9.1 GW, of which, 6 GW is operational as against the target of adding at least 20 GW of capacity every year for the next four years.
Domestic manufacturers are unable to compete with Chinese counterparts due to lack of complete value chain and ecosystem for manufacturing in India, which has led to higher costs and dependence on protection from the government for their very existence and survival. The domestic manufacturing sector is bleeding after India lost a case before the WTO pursuant to which it had to scrap tenders under DCR (domestic content requirement) category. The time has come for India to a stand on whether it prefers short-term benefits of cheaper imports or focus on a long term robust plan to develop end-to-end manufacturing support for its domestic sector.
The writer is MD and CEO,
Vikram Solar