India’s Solar Power: Renewable Expansion to Drive Energy Security, Diversification and Supply

11 June 2014 FDI Team

A pillar of new Indian Prime Minister Narendra Modi’s energy policy involves an expansion of solar energy infrastructure. Planned developments should assist India to diversify its energy sources and overcome its energy deficit. A targeted renewable energy sector will also contribute to improved living standards, environmental sustainability and economic growth.

Background

The new Modi-led Bharatiya Janata Party (BJP) Government is pursuing an expansion of India’s solar energy programme. The Economic Times has reported plans for new solar energy plants in the states and regions of Rajasthan, Gujarat, Jammu and Kashmir, and Ladakh. This is based on the new administration’s policy of energy diversification being fundamental to the achievement of energy security and robust economic growth. This situation notwithstanding, India will remain an abundant long-term consumer of coal, guaranteeing a demand for high-quantity Australian coal exports.

Comment

A focus on renewable energy development, particularly solar energy, is a pillar of the new Modi Administration’s policy to provide India with energy security and expand the provision of electricity. While India is the world’s fourth largest energy consumer, primarily derived from coal-powered plants, over 300 million of its rural-based citizens lack a constant supply of electricity. For Modi to build a robust economy and achieve India’s economic goals, overcoming the country’s energy deficit is a necessity.

Narendra Taneja, convener of the BJP’s energy division, stated during Modi’s campaign that ‘We look upon solar [energy] as having the potential to completely transform the way we look at the energy space.’ Modi has personally pledged to provide every Indian household with light-bulbs by 2019, with household solar panels as a primary energy source. The recent decision to construct four solar plants designed to provide 1,000KW each, is both an early example of the new Government working to fulfil its energy mandate and a boost for an expanding clean and renewable energy sector.

The Ministry of New and Renewable Energy administers the Jawaharlal Nehru National Solar Mission. This mission has an ambitious target of supplying 20,000 Megawatts of solar power to the Indian grid by 2022, in addition to the nearly 3,000 MW currently deployed. It is clear that sustained infrastructure investment and capital flow to the renewable sector, will be required to achieve this target.

India must not only increase the number of power generating facilities to support its energy infrastructure, but also modernise its inefficient production and dispersion technology. To overcome high levels of energy wastage will require funding for research, development and incentivised programmes targeted to encourage efficiency improvements in both the renewable and non-renewable energy sectors. As Gujarat’s Chief Minister, Modi was effective at industrialising large-scale solar power programmes – Charanka Village in Gujarat, for instance, is Asia’s largest solar park – but these developments must be replicated at the national level.

The Indian focus on building domestic solar energy programmes is part of a wider energy plan to diversify both the source and type of energy resources available for Indian consumers. Lessons from growing the renewable industry sector can be gleaned from China. Although it is the world’s largest polluter, China has also worked to tackle its own environmental problems with targeted clean energy investments and incentives that far surpass India’s levels. Energy diversification is also important in catering for, and hedging against, uncertain geopolitical eventualities. Growing Asian populations and strategic developments are likely to create future competition for India’s energy sources.

A rigorous focus on renewable energy programmes will by no means result in the decline of India’s traditional coal-supplied energy industry. With a likelihood that almost 500 million Indians will reside in cities by 2020, this burgeoning urbanisation will increase energy demand to meet construction, infrastructure and household requirements. The International Energy Agency, in its latest World Energy Outlook, predicted India would become the world’s biggest coal importer by 2025. For Australia, India’s largest coal source, India’s coal demand is unlikely to diminish and a strong energy trading partnership will remain. India, for its part, should work to limit the environmental and atmospheric degradation that results from coal-based carbon emissions.

A secure and diverse energy supply, with high-level infrastructure and technology investments focused on the solar and renewable sector, is a necessity for Indian development. With a more stable and enhanced supply of energy, productivity improvements , more commercial engagements and thus improved living standards will be possible. India also has an environmental obligation, like the rest of the international community, to build its clean energy infrastructure and counter the damaging effects of climate change. It is a positive development that Modi’s plans for strong renewable energy, energy diversification and growth go hand in hand with global long-term sustainability objectives.

Hugo Seymour
Research Assistant
Indian Ocean Research Programme

Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

Published by Future Directions International Pty Ltd.
80 Birdwood Parade, Dalkeith WA 6009, Australia.