India Innovating With Solar PV, Poised to Become Global Solar Leader Says World Bank

Dec 30th, 2013 | By | Category: News, Solar Energy

20131228-india-solar-canalsIndia still has 300 million people without access to energy and produces 70 per cent of electricity from coal fired power. A new report by the World Bank – Paving the Way for a Transformational Future: Lessons from JNNSM Phase 1 – highlights that India is poised to play a major global role in development of solar power. The country has excellent solar insolation to maximise solar generation and it is an industrial low cost destination for solar manufacture.

India made a voluntary commitment at the Copenhagen climate talks in 2009 to reduce the emissions per unit of its GDP by 20-25 percent by 2020 over 2005 levels. India is currently the world’s seventh largest emitter of global warming pollution and fifth largest for emissions from fossil fuel combustion.

The report outlines:

As one of the eight missions under India’s National Action Plan for Climate Change (NAPCC), the Jawaharlal Nehru National Solar Mission (JNNSM) was launched in January 2010 with the aim of accelerating India’s march toward grid parity in solar power. JNNSM envisages the achievement of grid parity through long-term and predictable policy, large-scale deployment, aggressive Research and Development (R&D), and domestic production of critical materials, components, and products along the value chain. Considering that India is blessed with immense solar potential, JNNSM can serve as a crucial element of India’s response to the challenges of energy security and climate change.

Already the solar mission, over a span of three years, has boosted total installed capacity of solar power from around 30 MW to more than 2,000 MW. JNNSM has contributed around 500 MW of that, with State funded projects also contributing.

An overall objective of JNNSM’s is to position India as a major power in solar manufacturing and R&D. It has a target of 20 gigawatt (GW) installed capacity by 2022, but hopes to also drive local solar manufacturing and development capacity.

Starting from a negligible base, the total grid-connected solar photovoltaic (PV) capacity base of the country had reached 2,079 megawatt (MW) by the end of September 2013 and the majority of Concentrating Solar Power (CSP) additions (around 500 MW) are also likely to happen by 2014.

But the initial development and roll out has come with several challenges and bottlenecks identified. This includes lack of funding by the Commercial banking sector. Perhaps the commercial banks are still too caught up ith financing coal plants.

There is also inadequate solar infrastructure; lack of raw materials for several solar PV manufacturers; and an underdeveloped supply chain leading to high inventory costs.

“Building on the success of Phase 1, the program now needs to focus on promoting financing of solar projects by commercial banks, developing shared infrastructure facilities such as solar parks and identifying comparative advantage of Indian manufacturing across the supply chain”, said Ashish Khanna, lead energy specialist and one of the authors of the report in a World Bank media release.

While both solar PV and Concentrating Solar Thermal (CSP) projects were funded, CSP projects entail more difficult and expensive manufacturing issues. “Solar thermal with less than 2.5 GW of installations globally is, however, far from commercially viable compared with solar PV with over 100 GW of installed capacity globally.” says the report.

The report compares Solar PV and Solar thermal technologies:

Solar thermal has suffered globally through comparison with solar PV, the latter experiencing exponential growth between 2004 and 2009 due to the demand from rooftop solar programs in Japan and Germany, followed by a dramatic decline in prices thereafter. Since 2009, solar PV has seen a consistent decline in polysilicon and module prices due to substantial over-capacities across the manufacturing value chain and the emergence of large-scale, integrated and low-cost suppliers in China.Solar thermal, on the other hand, has not reached a level where scale and competition can affect price reductions. CSP technologies are, at best, at the initial stages of commercialization with the dominance of a few suppliers who also own significant parts of the supply chain, restraining competition.

At the moment CSP technology being developed and used in the USA and Spain is essentially public funded through financial subsidies, with more development required for commercialisation.

The report recommends publicly developed infrastructure such as solar parks to help increase efficiency and lower costs. A Solar park in Charanka (Patan district) in Gujarat is today the largest solar park in Asia.

One of the implications for India developing it’s solar industry for grid transmission and stand alone use, is that it provides energy resilience and an opportunity to reduce coal use. Solar manufacturing could provide thousands of jobs with good possibilities for global export.

Like in China, the health impacts of coal use and air pollution are a growing concern. A recent Greenpeace study – Coal Kills: An Assessment of Death and Disease caused by India’s Dirtiest Energy Source (PDF) – found that “in 2011-2012, emissions from Indian coal plants resulted in 80,000 to 115,000 premature deaths and more than 20 million asthma cases fromexposure to total PM10 pollution”.

Coal produces 70 per cent of India’s electricity and with energy demand remaining strong, the movement away from coal use will be slow. Solar Innovation will assist this transition.

Over time this may result in reduced demand for imported coal which would add to the risk of stranded assets with Australia’s coal expansion.

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