“Let us turn to the Sun, to power our future.”
—PM Narendra Modi, at the launch of International Solar Alliance in Paris
On 15 December 2020, Prime Minister Narendra Modi laid the foundation stone of several development projects in Gujarat including a desalination plant, hybrid renewable energy park and a fully automated milk processing and packaging plant. The 30 GW proposed Hybrid Renewable Energy Park situated along the India-Pakistan border at Khavda, Kutch, is billed as the world’s largest Hybrid Renewable Energy Park. It will be the first of its kind with both wind and solar energy. The project is in line with the Modi government’s vision to install 175 GW of renewable energy capacity by the year 2022. It will also play a major role in fulfilling PM Modi’s vision of generating 450 GW power by the year 2030.
The mammoth hybrid park in Kutch will have two zones—spread over 72, 600 hectare of land, the first will be a 49,600-hectare hybrid park zone, accommodating wind and solar power plants of 24,800 MW capacity and second will be an exclusive wind power zone spread over 23,000 hectares. Renewable energy push has been high on the Modi government’s agenda. India has energy deals with Vietnam and seeks additional ones with Indonesia and Australia, on this front. These are useful partners, because of their rising mistrust of China. The route to self-reliance is based on energy security and PM Modi knows that better than most. That being the case, the 750-megawatt Rewa Solar Power Plant in Madhya Pradesh, which was dedicated to the nation by Prime Minister Modi on 10 July 2020, consists of three solar power generating units that are located on a 500-hectare plot of land inside a 1,590 hectare solar park, making it amongst the largest single site solar plants and projects in India and worldwide, too.
The 2,245 MW Bhadla photovoltaic solar park at Jodhpur in Rajasthan and the 2,050 MW solar park at Pavagada in Karnataka are solar parks worth mentioning. Apart from a $440 million funding from the World Bank’s sister arm, the International Finance Corporation (IFC), and its sheer size and scale, the Rewa solar plant is the first one to be coming up via the reverse bidding, auction route, testifying India’s self reliance model in the area of energy security.
In a recent Clean Energy Investment Ranking, India ranked in the top 3, from 114 countries. India, in fact, is the only “2C compatible” country, as per the Paris Climate Agreement, out of all the G20 nations, like the US, Brazil, Australia and several EU countries. The Paris Agreement, which came into force in 2016, aims to strengthen “global response to the threat of climate change” through Nationally Determined Contributions, commonly known as NDCs. The goal of the Paris Agreement is to keep global warming in check—below a hard, upper ceiling of 2°C, while striving to limit it even further to 1.5°C.
The Climate Transparency Report of 2020 recently lauded India’s afforestation programme “designed to stimulate the rural and semi-urban economy while providing essential ecosystem benefits”. Moreover, the report also notes that renewable sources like solar, wind and modern biomass account for around 9.2% of India’s energy supply, while the G20 average is only 6.4%.
Given the burgeoning energy demand, the Modi government’s huge strides in developing renewable energy sources have been highly commendable. The installed capacity of renewable energy generation in the country has grown 72% from 80 GW to 138.9 GW during the past six years. Foreign direct investments of $6.1 billion flew into the Indian clean energy sector—including solar, wind, biomass, large hydro and nuclear—in the five year period between 2014 and 2019. Globally, India stands third in terms of renewable power, fourth in terms of wind power, and fifth in terms of solar power installed capacity. For the period 2014-2019, clean energy investments in India were about $75 billion. The renewable energy capacity in India is currently 136 GW, which is over 36% of our total capacity.
Of the renewable energy sources, installed capacity of solar energy capacity registered the highest growth. It grew from 2.6 GW in March 2014 to 37.63 GW in March 2020.An additional 62.4 GW clean energy capacity is currently under various stages of implementation and 34.07 GW is under various stages of bidding. Most of the clean energy projects, except nuclear power and some large hydro projects, are set-up in the country by the private sector, which bodes well for overall energy security, as there is a judicious mix between the public and private sectors.
The Modi government had an initial target of 20 GW solar capacity for 2022, which was achieved four years ahead of schedule. In 2015, the target was raised to 100 GW of solar capacity (including 40 GW from rooftop solar) by 2022, targeting an investment of $100 billion. The BJP-led NDA government has established nearly 42 solar parks to make land available to the promoters of solar plants. In the decade ending 31 March 2020, India expanded its installed solar power capacity by 233 times from 161 MW to 37,627 MW. And a large part of that phenomenal growth came in the last 6 years alone, under the visionary leadership of PM Modi. Solar products have increasingly helped to meet rural needs; by the end of 2015 just under one million solar lanterns were sold in the country, reducing the need for kerosene. That year, 118,700 solar home lighting systems were installed and 46,655 solar street lighting installations were provided under a national programme; well over 1.4 million solar cookers were distributed in India.
Also, the International Solar Alliance (ISA), proposed by India in 2015 as a founder member, headquartered in India, has clearly put forward the concept of “One Sun, One World, One Grid,” to harness abundant solar power on global scale. To cut a long story short, 56% of India’s commercial energy is met by coal and well over 60% of entire power generated in India is coal-based. The Modi government has set a target of installing 175 GW of renewable energy capacity by 2022, which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power. The government is promoting development of solar energy in the country by providing various fiscal and promotional incentives like 10-year tax exemptions. If we look at last decade, the growth rate of coal was roughly 6.5%, which is further expected to slow down to about 4% till 2030.
In other words, effectively speaking, India has a stated objective of achieving 40% of installed capacity from non-fossil fuels by 2030. Coal power generation accounts for 38-40% of the additional power generation worldwide and about 27% of the global energy mix. While, clearly, despite the focus on non-fossil fuels, coal as a source of power is unlikely to become redundant any time soon, globally. Understanding this, the Modi government in the last two years has consistently been opening up the coal sector to private enterprise, to enhance economies of scale and competitiveness. Denationalisation of the coal sector, to end the monopoly of Coal India Ltd (CIL), which accounts for 83% of India’s coal production, 76% of thermal power capacity and over 50% of India’s total energy supply, has been a hugely brave and landmark decision by the Modi government.
Underscoring the need for a consistent and stable policy environment, as prolonged disputes can hamper the debt-servicing ability of projects, the Modi government has ensured an investor-friendly ecosystem. The Centre has been working with states to promote clean energy, given that it costs significantly less than conventional power.
Under a thoroughly incompetent Congress-led UPA regime that ruled India from 2004-2014, the renewable energy sector was always in the news for all the wrong reasons. Delays in payments from distribution companies (Discoms), execution delays on account of challenges in land acquisition and unavailability of evacuation infrastructure were the stumbling blocks. But more than anything else, an inept Congress lacked the political will to implement big bang reforms. In sharp contrast, PM Modi has used every adversity as an opportunity to unleash path-breaking reforms that have persistently moved away from restrictive stereotypes.
Be it Paris Climate Agreement, partnering BIMSTEC, issuing Green Bonds or helping countries ranging from those in the Indian Ocean region to those relatively farther away in North, East and Central Africa, PM Modi’s thrust on renewables, energy diplomacy and energy security has an inclusive appeal that transcends borders. The India-Bangladesh Power Corridor, with a reported transportation capacity of 6,000 MW of power from India’s Northeast through Bangladesh to Indian load centres, is a case in point. Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand brings together over 1.5 billion people—that is, over 21% of the world population.
In order to scale up environmentally sustainable investments, India joined the International Platform on Sustainable Finance (IPSF) in October 2019. IPSF can help finance the transition to a green, low carbon and climate resilient economy, by linking financing needs to the global sources of funding, showcasing how the Modi government is using global platforms to advance the cause of local issues in an exemplary tribute to “Vocal for Local”.
India has become the second-largest market globally, for “Green Bonds”, with $10.3 billion worth of transactions in the first half of 2019. Green bonds are debt securities issued by financial, non-financial or public entities where the proceeds are used to finance 100% green projects and assets. India now has the second-largest emerging green bond market, after China. The Modi government’s total estimated cost commitments to partner countries to strengthen energy infrastructure, including renewables in various projects, is estimated at a whopping Rs 75,469.5 crore in the last five years. Energy security and energy diplomacy are mirror images of each other and it is here that PM Modi, the quintessential statesman at all times and strongman when needed, has outscored and outwitted players like China.
Marrying energy security with environment friendliness is never easy due to the natural conflict involved. However, under PM Modi, India has managed this conflict seamlessly. Modi’s clarion call of ‘One World, One Sun, One Grid’, is redefining the very essence of how renewables will shape the destinies of many like-minded nations in the years ahead.
The author is an economist, national spokesperson for the BJP and the bestselling author of ‘Truth & Dare: The Modi Dynamic’. The views expressed are personal.