The government recently announced the trajectory for achieving the target for commissioning 175 GW of renewable energy capacity by 2022, including 100 GW of solar and 60 GW of wind. On the occasion of the signing of power sale agreements (PSAs) between the state discoms and the Solar Energy Corporation of India (SECI), R.K. Singh, minister of state (independent charge) for power and new and renewable energy, spoke about the government’s plans to speed up renewable energy installation and strengthen the renewable energy equipment manufacturing base. Excerpts from his address at the event…
Trajectory for renewable energy
There has been a long-pending demand from the industry to declare the renewable energy roadmap of the government. According to me, 175 GW of renewable energy capacity by 2022 is a very conservative target. India can easily achieve 200 GW of capacity by 2022.
We are confident of not just achieving the 175 GW target but even exceeding it, along with providing 24×7 affordable, clean and efficient power to everyone. This can be achieved with the cooperation of the states in ensuring that their power utilities remain financially viable. The central government has provided all the required support to the states, sch as disbursing funds under the Deendayal Upadhyaya Gram Jyoti Yojana and the Integrated Power Development Scheme, to ensure 24×7 “Power for All” by strengthening the intra-state transmission networks and ensuring mandatory metered connections. The Ministry of Power is in talks with the states to ensure 100 per cent metered connections through smart/prepaid meters.
The reverse auction of solar and wind power capacity has been very successful and resulted in tariffs dropping to an all-time low. The government, therefore, has decided to auction up to 21 GW of solar and wind power capacity by March 2018.
The Ministry of New and Renewable Energy (MNRE), along with the state governments, has planned bids for about 21 GW of ground-mounted solar capacity in 2017-18, of which 3.6 GW has already been bid out, 3 GW will be bid out in December 2017, 3 GW will be bid out in January 2018, 5 GW in February 2018 and 6 GW in March 2018. Another 30 GW each will be bid out in 2018-19 and 2019-20.
In the wind power segment, against a target of 60 GW, 32 GW has already been commissioned. The central government, along with the state governments, intends to issue bids for a cumulative capacity of 8 GW in 2017-18. Of this, 5 GW (including a recently announced 2 GW tender) has already been bid out, while 1,500-2,000 MW will be bid out in January 2018 and 1,500-2,000 MW in March 2018. A total of 10 GW will be bid out in 2017-18 and another 10 GW in 2018-19, leaving a margin of two years for the commissioning of projects. Further, the ministry will soon be issuing bidding guidelines for the wind segment.
Encouraging domestic manufacturing
Local manufacturers want the government to create a market for solar energy equipment in India. We expect to achieve this through the tendering route.
In order to encourage the Make in India programme in the renewable energy sector, the MNRE is working out a scheme and will soon be issuing an expression of interest to gauge the expectations of the industry. Under the scheme, the government plans to award development contracts for 20 GW of projects to companies that have equipment manufacturing units in the country or are willing to set up manufacturing capabilities. This means that a manufacturer will need to set up a manufacturing unit of a particular size, right from the ingot stage to the module stage, and only then can it participate in the bidding.
The scheme would be earmarked for government-owned projects, which would insulate it against anti-competition norms set by the World Trade Organization (WTO). A WTO ruling last year went against India for favouring local manufacturers under the domestic content requirement programme wherein the government had mandated that a certain portion of solar capacity addition be reserved for domestically sourced modules.
With wind power tariffs becoming competitive and the state discoms being encouraged to buy more renewable power, the government has doubled the bidding capacity for the third national-level wind auction from 4 GW last year to around 9 GW in the current year. Regarding clarity on the goods and services tax rates on solar panels, the MNRE is in talks with the Ministry of Finance and in the coming days, all the issues would be resolved. Further, we will think about imposing customs duty, if any, on solar equipment once we develop our domestic manufacturing capacity.
The MNRE is also exploring innovative ways to achieve additional renewable energy capacity in the form of floating solar power plants (FSPP) over dams, offshore wind energy systems (OWES) and hybrid solar-wind power systems (HSWPS), which may provide over 10 GW of additional capacity. An MNRE team of experts has already surveyed the Bhakra Nangal Dam for floating solar power plants, and is exploring offshore wind power opportunities in Gujarat and Tamil Nadu.
For innovative alternatives such as FSPP, OWES and HSWPS, land does not have to be acquired. Again, only those companies that will set up manufacturing facilities can participate. The advantage in such cases is since the projects will be at the dam site, power evacuation will not be a problem.
PPAs and RPOs
The sanctity of power purchase agreements (PPAs) has to be ensured and the agreements have to be mandatorily honoured. The ministry is in constant talks with the state governments, including Andhra Pradesh and Karnataka, to ensure the same. In the same way, meeting renewable purchase obligations (RPOs) is also mandatory and needs to be adhered to strictly.