India Pursues Ambitious Solar Goals Despite Pandemic’s Impact
The post India Pursues Ambitious Solar Goals Despite Pandemic's Impact appeared first on POWER Magazine.
India has one of the world's most aggressive solar development targets. The country's leaders have said they want to install 450 GW of renewable power generation capacity by 2030, a figure that would amount to about 55% of the total electricity capacity the country has estimated it will need by the end of the decade.
Government data showed India had just more than 94 GW of renewable generation capacity installed as of the end of March 2021, about 25% of the country's total capacity. A recent report from Mercom India, part of Mercom Capital Group, said that at the end of March 2021 cumulative solar installations accounted for 41 GW of generation capacity, with 35.5 GW from large-scale projects, and the rest from rooftop solar. The group said India's large-scale solar project development pipeline stands at 53.6 GW, and there also were 24.1 GW of projects tendered and pending auction at the end of the first quarter this year. The group said solar installations accounted for 33% of all power capacity added in the first three months of this year, and said renewables as a whole, including wind and hydro, made up close to 50% of capacity additions in the quarter.
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1. This SB Energy India solar farm is among the company's 5 GW of renewable energy assets in India. Adani Green Energy, part of the Adani Group, in May announced it was buying SB Energy India in a $3.5 billion deal. Courtesy: SB Energy |
Investors have taken notice. Adani Green Energy, part of the Adani Group that is India's largest developer of solar power-and also among the biggest in the world-in May announced it was buying SB Energy India from Japan's SoftBank Group and India's Bharti Group in a $3.5 billion deal. Adani said the purchase is India's largest transaction of renewable energy to date. SB Energy India has about 5 GW of renewable energy assets in India, with most of that solar power (Figure 1). Adani has its own suitors; earlier this year, France's Total SE said it would buy a 20% stake in Adani Green Energy for $2.5 billion.
Gautam Adani, chairman of Adani Group, in a statement said, This acquisition is another step towards the vision we stated in January 2020, wherein we laid out our plans to become the world's largest solar player by 2025 and thereafter the world's largest renewable company by 2030. India, without any doubt, has been one of the few nations that has accelerated its global commitment towards climate change and we intend to do our part to execute on the promises made. The renewable energy platform that we are building will lay the foundation for attracting several other global industries that are increasingly looking to reduce their carbon footprint [as well as lay the foundation for opening up adjacent platforms that include hydrogen and storage]. We are well on our way to achieve our stated solar portfolio targets four years before the deadline we set for ourselves. The quality of assets that SoftBank and the Bharti Group have built are excellent and I compliment their efforts to support India's renewable energy transition. We are proud to take their legacy forward."
Vikram Solar, one of the country's leading module manufacturers, along with providing engineering and construction services for both utility-scale and residential installations, in May said it had completed an 85-MW solar plant project commissioned for National Thermal Power Corp. Ltd. (NTPC) at Bilhaur, Kanpur, Uttar Pradesh. The new installation, when combined with a recently commissioned 140-MW project for NTPC at the same location, is now the largest solar farm in a single location in Uttar Pradesh.
It was an honor for us to partner with NTPC for this prestigious project," said Saibaba Vutukuri, CEO of Vikram Solar. This project presented the opportunity to increase our contribution to India's solar mission and we are proud to be chosen by NTPC to make such an effort. NTPC is one of our oldest clients and we have been partnering in several of their solar projects. We are proud to say that we have a portfolio of commissioned and under-construction projects totaling ~708 MW with NTPC, as it identifies our commitment and focuses on customer-centricity. We are hopeful of a continued journey with NTPC towards realizing the company's green energy goals."
The country's rural areas also are getting new opportunities to use solar power. Pramod Sawant, the chief minister of Goa, has inaugurated a solar photovoltaic-based electrification program to deliver power to residents of the rural areas of the state. The initiative is led by Convergence Energy Services Ltd. (CESL) and Goa Energy Development Agency (GEDA). CESL is a subsidiary of the state-owned Energy Efficiency Services Limited.
The project aims to electrify remote areas in the smallest state of the country through renewable energy where grid connectivity is not feasible. This project is CESL's first off-grid electricity program; the group will install and maintain solar PV systems for five years under the state government's Remote Village Electrification program.
Said Sawant: We will achieve 100% electrification for all homes in Goa, that too with clean energy. We have made policy decisions for Goa to transition to a green state in a fast and concerted way. I congratulate GEDA and CESL for their good work."
Mercom India in its recent report said the country added 2.05 GW of solar power capacity in the first three months of this year, and said solar accounted for about 10.7% of the country's total installed power generation capacity as of the end of March. The group in its Q1 2021 India Solar Market Update," published in late May, reported that solar installations were up 88% year-over-year, compared to the 1,090 MW added in the first quarter of 2020. The group said the addition of solar generation capacity in the January-March 2021 period was the highest in a quarter since the third quarter of 2019. Mercom reported that large-scale solar projects represented 1,749 MW of installed capacity in Q1, with rooftop installations accounting for 307 MW. The group in its report said much of the increase in first-quarter projects came as developers completed their delayed installations from last year. Commercial and industrial electricity customers also were installing rooftop solar, taking advantage of cost savings during challenging market conditions," the report said.
There may be a bump in the road, though, due to COVID-19. Bridge to India, a renewable energy consultancy, in its recent India Solar Compass Q1 2021" report, said it expects the country will add 1.35 GW of utility-scale solar in the April-June period, down 43% from its initial estimate for 2.35 GW. The group said installations will likely recover in Q3, with capacity additions expected to reach 2.47 GW.
With the second wave of the pandemic hitting the country, the industry is battling solar component price increases and volatility. Even more concerning is the uncertainty in procurement as shortages are widespread. Policy restrictions and duties have added to the rising costs and unpredictability," said Raj Prabhu, CEO of Mercom Capital Group. Mercom expects India will add about 7 GW of new solar power capacity this year, what it called a medium case" scenario as project timelines continue to be extended due to the pandemic.
The report said the second wave of COVID-19, and its variants, which brought lockdowns to many regions of the country beginning in late April, will again bring construction delays due to labor issues and disruptions to equipment supply chains. Mercom's researchers in a news release noted, The average selling prices of solar modules have risen sharply along with other components, including iron, copper, aluminum, and steel. Freight charges are high all over the world, and the dearth of shipping containers is widespread. The shortage and availability of solar glass and backsheets continue to be a challenge."
Said Prabhu: Due to the targeted lockdowns, this time around, disruptions and labor issues are not as widespread as last year. However, most of the lockdowns are in important solar states like Rajasthan, Maharashtra, and Uttar Pradesh which will significantly impact installation totals this year." Mercom said that Rajasthan and Uttar Pradesh were the top states for solar installations in the first quarter of 2021.
Mercom noted that the surge in demand for rooftop solar came primarily from industries looking to reduce operating expenses as the pandemic brought financial challenges. Prabhu, though, said supply chain disruptions-along with higher prices for solar modules-continue to impact the pace of construction. The solar industry is grappling with how to move forward amid so much uncertainty," Prabhu said. Bidding for auctions in the future will be extremely challenging, and developers must give themselves a lot of room to factor in the risks and price volatility. This is the first time we have seen module prices rise four quarters in a row since the last 5-6 years. Bidding low in anticipation that module prices will perpetually fall is an extremely risky strategy in today's market."
-Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).
The post India Pursues Ambitious Solar Goals Despite Pandemic's Impact appeared first on POWER Magazine.