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India’s performance in solar power not so encouraging, says parliamentary panel

LiveMint logoLiveMint 31-07-2017 Mayank Aggarwal

New Delhi: Cautioning that India’s performance in renewable energy areas like solar, small hydro, biogas is not so encouraging, a parliamentary standing committee on Monday said that the government should not act as bystander and adopt more proactive approach to arrange finances for solar power projects.

It also said that 40,000 megawatt target of grid connected rooftop solar by 2022 is “unrealistic” and it is “highly unlikely that this target will be achieved”. It suggested that government should give it a “serious relook” at it otherwise it will derail the National Solar Mission target of 100,000 MW by 2022.

It also pressed upon government to “urgently formulate” a dedicated programme to establish India as a solar manufacturing hub.

The observations were made by the Lok Sabha’s standing committee on energy—headed by Bharatiya Janata Party (BJP) MP Kumar Virendra Kumar—which presented its report, ‘National Solar Mission – An Appraisal” to the Parliament on Monday.

Prior to Paris Climate Summit in December 2015, Prime Minister Narendra Modi-led National Democratic Alliance (NDA) government announced an ambitious renewable power programme of 175,000MW which includes 100,000MW solar power and 60,000MW wind power.

“As far as wind is concerned, it is already performing satisfactorily and steps have been taken to provide the desire fillip to this sector…it is presumed that the target set for this sector will be achieved. However, the performance in other sectors of the renewable energy such as solar, small hydro, biomass, biogas etc. is not so encouraging,” said the report.

At present, India has a total of 58,303.35MW of renewable power of which 32,508.17MW comes from wind power alone, while solar energy accounts for 13,114.85MW.

It noted that the total investment for commissioning of 100 gigawatt (GW) solar power has been estimated to Rs5 trillion and most of the investment is done by private entities.

“The ministry should not act like a bystander as arrangement for such a huge investment cannot be left to private sector alone. The ministry should play a more proactive role with respect to financial investments like providing access to loans at more favourable rate of interests, introducing green bonds, approaching international donors, arranging finances from green climate fund etc. to achieve the ambitious target of 100GW of solar energy by 2022,” the committee said.

On rooftop solar target of 40GW by 2022, the standing committee recommended that the target be reconsidered.

Mint reported in July that India may not achieve even half of 40GW solar rooftop target by 2022.

The committee also cautioned about falling solar tariff and observed that per unit price of solar power has dropped from Rs10.95 in December 2010 to Rs2.44 in May 2017.

It said that “in a rush to build market share in the sector, some players have become very aggressive in competitive auction and are bidding very low tariff”.

“The committee is apprehensive about the quality of the material used. The committee is of the view that some of these projects would become unviable because the developers may find it difficult to raise funds and contain high project cost and such a low solar tariff would also effect the viability of those solar projects which have been awarded earlier at a higher rate,” the report said.

It recommended government to impose a “high anti-dumping duty” to discourage import of poor quality material and asked the government to ensure that “some outlying bids do not disturb the market dynamics”.

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