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Solar India: why climate finance is so important

Anna Da Costa

14th December, 2009

As negotiators haggle in Copenhagen over the levels of financial assistance to be provided to less-industrialised nations, Anna Da Costa highlights the difference this money could make

After months of speculation marked by rumors, leaks, and high-level approvals, India formally launched its national solar mission, known as 'Solar India', in late November.

The policy confirms India's much-touted plans to install 20,000 megawatts (MW) of solar power over the next 12 years - a 6,666-fold leap from the current 3 MW of installed capacity, and the equivalent of 13 percent of India's total installed power generation capacity.

The supply would be met with solar thermal technologies that convert the sun's light to heat, as well as solar photovoltaic (PV) systems that convert sunlight to electricity, for use in both grid-connected and off-grid applications such as solar water heaters and solar lanterns.

Speaking at the launch of Solar India in Delhi, India's Minister of New and Renewable Energy, Dr. Farooq Abdullah, described the mission as a 'historic and transformational initiative'.

The big scale-up

Solar India's primary aim is to create an 'enabling policy environment' for rapid diffusion of solar technology across the country. According to the final policy document, the mission hopes to 'attract industry and project developers to invest in research, domestic manufacturing, and development of solar power generation and thus create the critical mass for a domestic solar industry'.

Such a scale-up would involve the use of wide-ranging mechanisms, such as 'Renewable Purchase Obligations' that would require power providers in each state to purchase a certain share of their electricity supply from solar energy.

Other expected measures include time-bound subsidies, which would provide a fixed, 'attractive', and 'predictable' tariff for solar energy; research and development to support new innovations and partnerships; and capacity building that would aim to 'develop and strengthen Indian skills and enhance indigenous content', Abdullah said.

The mission also hopes to bring down the cost of solar energy to be on par with 'conventional' grid power by 2022 and with coal-based thermal power, currently the cheapest energy source, by 2030 - enabling a rapid scale-up of solar technologies.

International support

The mission states that although India aims to install 3,000 MW of solar by 2017, this capacity could reach 10,000 MW or more by that date with the support of 'enhanced and enabled' international financing and technology.

'If funds are made available, in the form of either grants or low cost loans, the costs of generation would be reduced,' an official with the Ministry of New and Renewable Energy said, speaking anonymously. 'It would definitely enable us to expand solar capacity faster.'

India has been highly vocal about the need for international support to enhance its climate change efforts.

Indian Prime Minister Manmohan Singh clarified recently that India has 'not made [the solar plan's] implementation conditional upon obtaining international support'. However, 'we can certainly do more if there is a supportive global regime,' he noted at last weekend's Commonwealth Summit in Trinidad and Tobago.

The solar mission's expected cost has not been made publicly available. A draft version leaked earlier this year included an estimate of $20 billion.

Siddharth Pathak, a climate and energy campaigner with Greenpeace India, is concerned that this financial omission may hinder the flow of international support for the mission during and beyond the United Nations climate summit this December.

'If India wanted to do the mission in part with international finance, they should [have] clearly earmark[ed] what India is willing to do on its own, and what is India asking to be internationally financed,' Pathak said. 'If India is installing through its own money - say, 10 gigawatts by 2013 - then the international community, by fulfilling its obligations under the negotiations, should ensure that they provide the finance [and technology] so that India can do 20 gigawatts by 2013,' he said.

Pathak also observed that the absence of a specific estimate for avoided carbon emissions as a result of the solar mission's implementation weakened what could have been a 'brilliant' document.

Deals abroad

Outside of the global climate change negotiations, India has been increasingly strengthening its bilateral relationships with other large nations in the area of climate-related support.

India and China recently established an agreement 'to strengthen their exchange of views and cooperation on mitigation policies, programs, projects, technology development and demonstration relating to greenhouse gas emission reduction', including renewable energy.

And at the European Union-India Summit in early November, delegates called for 'early implementation of...cooperation [efforts] in solar energy' between the EU and India to be developed 'expediously'.

Peter Luff, CEO of Action for a Global Climate Community, a group seeking to enhance the EU-India dialogue on climate, observed that the solar mission's call for greater international collaboration on technology, research, and finance could be met through 'enhanced cooperation between the EU and India that could attract the necessary level of private finance,' as well as through 'joint research and development leading to programmatic cooperation'.

India's Ministry of New and Renewable Energy is also implementing bilateral solar projects with Japan and Australia under the Asia-Pacific Partnership Programme. Meanwhile, the establishment of the US-India green partnership last week confirmed that collaboration on solar energy would be a significant dimension of that effort.

Anna da Costa is a Worldwatch research fellow based in New Delhi, India. This article is part of a series on India's climate and energy policies around the Copenhagen climate conference and supported by the Heinrich Boell Foundation, Washington D.C.

This article is an edited version of one that first appeared on Eye on Earth, Worldwatch Institute's online news service, on December 1st, 2009. For permission to reprint Eye on Earth content, please contact Juli Diamond at jdiamond@worldwatch.org.

 

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