The Ministry of New and Renewable Energy (MNRE) has been ramping up its efforts to facilitate the country’s green energy transition in a sustainable and systematic manner. Alongside Covid relief measures for developers and various support schemes for the promotion of emerging opportunities in energy storage, hybrids and round-the-clock power, it has also been focusing on developing the country’s manufacturing capabilities to make it more self-reliant. Indu Shekhar Chaturvedi has been at the forefront of these policy interventions ever since he took charge as secretary, MNRE, last year. At recent industry events, he spoke in detail about India’s achievements in the clean energy space and its future plans, especially with respect to the promotion of green hydrogen and domestic manufacturing of solar cells and modules. Renewable Watch presents edited excerpts from his addresses…
India’s per capita energy consumption is still a fraction of that of the developed countries. Our per capita energy consumption will go up as we grow and develop. The challenge before us is to make energy affordable to all citizens, and also decarbonise the energy sector.
In the last seven or so years, India has made increasingly focused efforts to implement citizen-centric energy policies and programmes. Our endeavours to achieve a citizen-centric energy transition are a part of this broad policy direction. Our initiatives have ensured that almost all Indian households today have access to grid-connected electricity. This has been accompanied by a massive expansion in the installed renewable energy capacity. In India, the renewable power capacity, excluding large hydro, has gone up 2.4 times in the last seven years. Today, the installed renewable energy capacity including large hydro is about 37 per cent of the total installed electricity capacity. This, coupled with almost universal access to grid-connected electricity, ensures that citizens, on average, meet a progressively larger part of their energy needs from renewable power resources, and this share will increase as we move forward towards our goals.
It would perhaps be correct to argue that an increased share of renewables in the total energy mix itself implies a shift towards equity. This is because the poorest sections of the population are the worst affected by environmental pollution and degradation, which can be curbed using green energy. Thus, India has taken important steps to directly benefit its citizens by providing them renewable energy solutions.
For instance, we have recently made a big push towards solarising agricultural pumps. This would be achieved primarily by solarising electricity feeders that provide electricity to grid-connected pumps. It would reduce the subsidy burden on governments, help improve the financial position of the discoms and shift the agricultural load to the daytime, thus benefiting farmers. The programme, as it stands, has the potential to solarise about 5 million pumps with a total capacity of about 27 GW.
Our rooftop solar programme aims to add substantially to the installed renewable energy capacity. We intend to accelerate progress in this programme particularly by means of a new set of rules, which are being framed. Moreover, we have installed more than 800,000 solar street lights in the remote areas of the country. We have also provided about 8 million solar lamps to students in such remote areas, or the parts of the country that face special problems.
While these are some examples of the actions that have already been taken, we also intend to put in place a special programme for decentralised renewable energy livelihood applications. These would include applications such as the solar spinning wheel, small flour mills, small cold storages, and so on. The intention here is to help in the earning of livelihoods using renewables. We have reason to be hopeful in this regard. A Council on Energy, Environment and Water report, for example, reveals that enterprises using solar-powered sewing machines have, on average, experienced an increase of 39 per cent in their annual incomes.
Progress in the decentralised application of renewables would depend to a large extent on the development of new technologies, particularly those related to storage. Hydrogen technology is one such example. We intend to launch a hydrogen mission later this year, which would cover all areas where action might be needed to promote the use of hydrogen. In the beginning we intend to make it obligatory for certain industries to use a specified proportion of green hydrogen in their total hydrogen requirements. This would create demand for green hydrogen and thus scale up its production. This scaling up would, in turn, lead to a reduction in green hydrogen prices.
We have been actively engaging with the industry to facilitate it and increase its share in renewables. The response that we have received is overwhelming. We are acting on the suggestions and proposals that we have received in this regard. One of them is for making green power available to industry and other users at a special green tariff. The response of the industry to the call for energy compacts has also been encouraging. We have already received energy compacts from several industrial houses, including NTPC Limited, Ultra Tech Cement and JK Cement, and we congratulate them on their commitments.
Regarding domestic manufacturing, the general argument is that the government should intervene in this space if there is an externality. This externality could be in terms of a desirable national goal – for example, reducing the current account deficit or import reliance in a strategic sector such as energy. We are fully committed to smoothing the problems the industry faces.
The solar domestic manufacturing industry, which is in its infancy, needs to be protected till it generates economies of scale and becomes competitive. Our solar module capacity today is 8-10 GW, and not all this is of sufficiently good quality. Our cell capacity is about 2.5 GW. Thus, if we are to achieve our national targets of 450 GW renewables by 2030, we need to manufacture 25-30 GW of solar cells and modules per annum.
We have taken several steps to promote domestic manufacturing in the solar power space. There are provisions for demand creation, incentives for production, and protection from imports. The domestic content requirement generates demand through the Kisan Urja Suraksha evam Utthan Mahabhiyan (KUSUM) scheme, the central public sector undertaking (CPSU) scheme and the rooftop solar programme as the use of domestically produced cells and modules is compulsory. Further, a basic customs duty of 40 per cent on imported modules and 25 per cent on imported cells has been announced from April 2022 onwards. We have notified an “Approved List of Models and Manufacturers”, which caters to quality amongst many other uses.
The recently announced production-linked incentive (PLI) scheme has received a huge response from the industry and our initial estimates are that we will get bids amounting to about 30 GW. We expect all these measures to result in an additional manufacturing capacity of 25 GW for modules, 25 GW for cells, and 10 GW for wafers and ingots by March 2024. We hope that through our PLI scheme, the industry will get the latest technologies from abroad and set up manufacturing units in India. A manufacturing clusters scheme is already in the pipeline, and we are working with the Ministry of Power to have this scheme for both power and renewables.
Regarding the visibility of upcoming bids, we should definitely have a clear trajectory. While that has not been done so far, we estimate that through our central bidding agencies, such as NTPC Limited, NHPC Limited and the Solar Energy Corporation of India, we will have bids of about 15 GW per year. The remaining 15 GW will come from state-specific bids, KUSUM, and CPSU and other programmes.
India is positioned well in domestic manufacturing of wind power equipment. The MNRE has so far not seen a case for the PLI scheme in the wind segment. However, the industry has become somewhat stagnant, and we do want to give it a boost. We will also work on offshore wind, as that is an area where we have not been able to make any real progress till date.
We have taken some good steps quite early on, in the green hydrogen space. The green hydrogen mission document and the green hydrogen purchase obligation cabinet note are under inter-ministerial consultations. We have proposed green hydrogen purchase obligations for the refining and fertiliser sectors. Based on our estimates, the cost difference would not be significant if we do impose those obligations. The basic motive behind this is to create demand so that manufacturing can automatically scale up.