Review: What is the status of ‘Solar Energy’ generation in the country?
Sai Krishna Muthyanolla
April 8, 2021
A parliamentary standing committee recently reviewed India’s 2025 action plan for achieving 175 GW of renewable energy target. The committee noted that on the solar front, the progress in many of the schemes has been tardy and much needs to be done to achieve the set targets. Here is a review of the solar energy sector.
In the year 2015, a total of 196 countries came together under the Paris Agreement which is a landmark international accord to address climate change and its negative impacts. The agreement aims to substantially reduce global greenhouse gas emissions in an effort to limit the global temperature increase in this century to ‘2 Degrees Celsius’ above pre-industrial levels while pursuing the means to limit the increase to ‘1.5 Degrees’. Nationally Determined Contributions (NDCs) embody efforts by each country to reduce national emissions and adapt to the impacts of climate change. Under the agreement, each party must prepare, communicate, and maintain successive NDCs that the country intends to achieve.
India has pledged 40% of country’s installed power generation capacity will be from renewable sources
India has made a pledge that by 2030, 40% of the country’s installed power generation capacity shall be from clean energy sources. In 2015, it was decided that by 2022, India will install 175 GW of renewable energy capacity. This includes 100 GW from solar energy, 60 GW from wind energy, 10 GW from biomass, and the remaining 5 GW from small hydropower. Later, in 2019, Prime Minister Narendra Modi stated that India’s renewable energy capacity would be increased to much beyond 175 GW and eventually to 450 GW.
Nearly one-fourth of power generated in India is through renewable sources
As of March 2020, India stood among the top 5 countries in the world in terms of renewable energy capacity. India ranked fifth in solar power, 4 in wind power, and 4 in total renewable power installed capacity. Including the hydropower capacity, India ranked 3 globally in renewable power capacity. Over the years, it is observed that the share of renewable energy to total installed power capacity has increased from about 10.6% in March 2011 to 23.6% in May 2020. However, Thermal energy (Coal) continues to be the primary energy source in the country.
The main renewable sources of energy in India are solar power, wind power, bioenergy, and small hydro energy sectors. In this story, we look at the different schemes being implemented to promote solar power in India, and its current status. In the subsequent story, we will be looking at the schemes surrounding other renewable and clean energy sources and their status of implementation.
The data for the story has been collated from a recent parliamentary standing committee report on “Action Plan for Achievement of 175 Gigawatt (GW) Renewable Energy Target”, tabled in March 2021.
National Solar Mission was launched in 2010 to promote solar power usage
The National Solar Mission (NSM) was launched in 2010 with the target to deploy 20,000 MW of grid-connected solar power by 2022 to reduce the cost of solar power generation in India through long term policy, large scale deployment goals, aggressive research and development, and domestic production of raw materials, components, and products to achieve grid parity by 2022. Later, the target was revised to 1,00,000 MW by 2022. However, against the target of 100 GW of solar energy, as of June 2020, a total of 35.12 GW of solar power capacity had been installed in India and solar power projects of 31.48 GW were under various stages of implementation. No annual targets were set. The annual additional solar energy installation capacity is given in the chart below. The highest capacity addition was in 2017-18 with a 9.3 GW capacity addition.
Fund utilization is still not 100%
In spite of the allocation made every year, only about 84 to 90% of the funds have been utilized in the last four years. The low fund utilization is cited to have arisen from the funds reserved for the North-East States that are not fully utilized because of poor potential in these areas, the rough terrain, and a poor number of proposals from state governments for setting up grid-connected solar power projects.
What are the various projects under NSM?
The Ministry of New and Renewable Energy (MNRE) has rolled out the following schemes under NSM for achieving the target in solar energy:
Solar Park is a large chunk of land developed with all necessary infrastructure and clearances for setting up solar projects. Solar parks usually have a capacity of 500 MW. Smaller parks (up to 20 MW) are also given approval in States where there is a shortage of non-agricultural land. Approximately 4 to 5 acres of land is required every MW for setting up solar parks, acquiring of which is a challenge.
As of June 2020, a total of 39 approved solar parks of an aggregate capacity of 22,879 MW were being set up in 17 States. These parks are at different stages of development. The infrastructure in about 8 of these states which have an aggregate capacity of 6580 MW is fully developed while 4 other parks which have an aggregate capacity of 1365 MW are partially developed.
The committee observed that 11 solar parks with an aggregate capacity of 17,121 MW have not even got the approval of the Ministry although these Solar parks have to be developed and projects to be commissioned by 2022. The committee recommended that the approval process should be made faster and called for exploring the possibility of utilizing surplus land available with various public sector undertakings like in the case of Kochi Airport.
Only 9 CPSUs had participated in the 1000 MW CPSUs Scheme. The scheme also envisages the use of domestically manufactured cells and modules. VGF is provided to cover the difference in cost between domestically produced and imported solar PV cells and modules. A VGF of Rs. 795 crores have been released to Solar Energy Corporation of India (SECI) for disbursal to the 9 CPSUs and in phase-II about Rs. 319 crores have been released for disbursal to 7 participating CPSUs. Another VGF Scheme for setting up 5000 MW of Grid-Connected Solar PV Power Projects through SECI, which has a separate component of 1000 MW for N-E states is also being implemented.
The committee opined that the target under the scheme must be enhanced and more CPSUs and government organizations must be encouraged to participate in the scheme.
The scheme has been set up for achieving a cumulative capacity of 40,000 MW from Rooftop Solar (RTS) Projects by the year 2022 and is implemented through DISCOMs. However, only 1948 MW of solar power roof-top could be installed in more than five years (2015 to 2020). Again, in February 2019, the programme was approved with a target for achieving a cumulative capacity of 40,000 MW from Rooftop Solar (RTS) Projects by the year 2022. However, against the annual target of 3000 MW, only 472 MW could only be achieved during 2019-20. The target is higher for subsequent years that is 6000 MW for 2020-21, 12000 MW for 2021-22, and 17000 MW for 2022-23. Assistance has been increased from 30% to 40%.
The committee stated that the targets are unrealistic and recommended spreading awareness about the scheme and also introduce a Single Window Clearance System to assist and provide hassle-free service to customers that would make subsidy disbursement transparent and quick.
Further, the ministry is recommended to consider income criteria for providing subsidies. It recommended the installation of rooftop plants in all government buildings. The Ministry was also asked to ensure proper implementation of Net/Gross Metering arrangements through consultations with all stakeholders so that both DISCOMs and consumers get a fair deal.
The scheme was launched with the objective of installation of an additional off-grid solar capacity of 118 MWp by 2020 through 3,00,000 solar streetlights: 25,00,000 solar study lamps and 100 MWp of off-grid solar power plants. However, the sanctioned and installed figures are as follows:
The progress under this scheme has been very slow and the pandemic has further affected the scheme. The committee suggested that solar study lamps should be provided to students in LWE affected districts, remote areas, and NE states for free and service centres should be set up in districts for timely maintenance. Ministry was also asked to encourage solar application installation in highways, railway stations, irrigation canals, etc.
The scheme to support farmers to set up small solar power projects and solar pumps for irrigation purposes was launched in 2019 with the aim to add a solar capacity of 25,750 MW by 2022. There are three components under the scheme. However, it was observed that participation of states was low under this scheme. Annual targets were also absent which made it difficult to monitor the progress of the scheme. The committee also suggested that all states and UTs implement the scheme vigorously and called for the formulation of a mechanism to ensure power produced by the farmers is bought by DISCOMs and they make timely payments to farmers.