Solar energy for private sector

With India’s energy security based on fossil fuels like oil and coal to generate electricity under stress for the former and under scanner for the latter, the path to green growth in the post-Paris climate change agreement crafted by 192 nations including India is also not presenting an easy option. Given the uncertainty of renewable energy and the high initial cost in generating them from the elements like air, water, or biomass, the road ahead is equally bumpy if there is no forward plan or proper spadework to get the schemes/programmes going sans snags and snafus.

It needs to be noted that our country hosts around 17 per cent of the global population but its energy and electricity consumption is barely five percent of the world’s consumption. Its per capita consumption of energy and electricity is less than one-third of the world’s average though this cannot be used as an alibi for inaction to tap renewable energy and put more faith in fossil fuels which exact considerable health cost to its populace. In order to sustain a plausible robust growth of over eight percent through the next two decades, the country would need to grow its primary energy supply by three to four times and electricity supply by at least five to seven times of its extant consumption.

Given the paucity of fuels to keep the wheels of the economy moving, the nation might need to import over 90 percent of its requirement of oil and over 45 per cent of its requirement of coal. Energy shortages are currently at an average of 8.7 percent with peak deficit at 9 percent. But in the wake of alarms raised by burning fossil fuels that contribute to environmental degradation and sustainability of life in the planet for all, the need to tap non-conventional and renewable sources of energy has been highlighted for quite some time. India has made gratuitous commitments at the United Nations Framework Convention for Climate Change (UNFCCC) to reduce its carbon emissions intensity by 20-25 percent by 2020 in comparison with the 2005 levels. It is also forecast that renewable energy would constitute 15 percent of the energy mix of the country by 2020.

According to the Union Minister of Coal, Power, and Renewable Energy, Piyush Goyal, India might scale up its solar energy capacity four-fold in the final year of the 12th Plan (2016-17). From the existing solar capacity of about 4500 mw, the capacity addition target for the current fiscal (2015-16) is 2000 mw. In the next fiscal,  Goyal said, “We are hoping to add 12,000 mw in solar sector alone. Thus, including other renewable sources, there will be a total capacity addition of about 15,000 mw during the next fiscal”. Although this sounds ambitious, the Minister is quite cocky and convinced that “with the government focusing on speed, skill, and scale rather than subsidies to drive reforms and progress in the energy sector”, private companies and entrepreneurs would avail of the hand-holding approach by the authorities to score scale and path-breaking innovation.

No doubt, the country is fortunate to have been endowed with vast renewable energy potential of 8,89,508 mw. Considering the importance of Renewable Energy (RE) as an alternative to meet the mounting energy demand of India, the Comptroller and Auditor General of India (CAG) undertook a performance audit of this emerging sector for the period 2007-14 and laid its report in Parliament in the winter session. In April 2002, RE-based power generation installed capacity in the country was 3475 mw which was just two per cent of the total installed capacity. As on end-March 2014, it was 31,719 mw which was around 11 per cent of the installed capacity. Grid connected RE installed capacity included solar (2656 mw), wind (21, 137 mw), small hydro (3803 mw) and biomass (4123 mw).  Interestingly, the CAG report noted that 10 States (Andhra Pradesh-before bifurcation- Gujarat, Himachal Pradesh, Jammu and Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and Tamil Nadu) endowed with 78 percent  of the country’s renewable energy potential, varied in terms of potentials exploited.

The performance audit by the CAG revealed that as against the National Action Plan on Climate Change (NAPCC) target of eight and nine per cent for the years 2012-13 and 2013-14, for purchase of electricity generated from RE sources, the national achievement was only 4.28 per cent and 4.51 per cent respectively. Hence, if the 2020 target of RE were to constitute 15 per cent of the energy mix of the country, the Ministry of New and Renewable Energy (MNRE) should follow it up with State Electricity Regulatory Commission (SERC) for the adoption of Renewable Purchase Obligation targets in alignment with NAPCC targets. ON solar energy, the CAG report asked the MNRE to focus on development of solar energy in the states endowed with high solar energy potential. The MNRE should also formulate guidelines for net metering so as to provide an enabling milieu for solar technology penetration at a decentralised level.

On wind power, the CAG performance audit urged the MNRE to work towards the development of adequate transmission and distribution infrastructure, both intra-State and inter-State, to meet the need of large scale evacuation of wind power and grid stabilisation through scientific forecasting techniques. MNRE might also look into the issue of repowering the old wind turbines and craft a policy for optimal utilisation of existing capacities and their enhancement. Adverting to small hydropower projects, the audit detected in Bihar 15 such projects had not been commissioned even after procrastinations ranging from 37 to 88 months and incurring expenditure of a massive Rs 128.19 crore that became infructuous in a State struggling to find resources for physical and social infrastructure creation, maintenance and improvement. Hence, MNRE should focus on reviewing small hydropower projects that are held up or are under-performing to find a pragmatic solution to the problems plaguing the completion of these projects.

Dwelling at length on off-grid renewable power and solar photovoltaic system in particular, the CAG report found that MNRE did not align its off-grid targets with the Jawaharlal Nehru National Solar Mission (JNNSM) target and only 31 per cent of the JNNSM targets were achieved. Finally, the report faulted MNRE for “lax” monitoring of the projects under the Research, Design, Development and Demonstration Programmes for which it sanctioned 190 projects at a whopping cost of Rs 545.90 crore during the span 2007-08 to2013-14 to various R and D organisations. Of which, 112 projects were completed and 78 projects were under progress through the realisation of deliverable outcomes was not achieved in a majority of projects.  The CAG report on performance audit has not come a moment too soon when India has put greater emphasis on renewable energy, hoping to hand-hold private sector through its MNRE and the various projects and programmes it had been sponsoring over the years as models. Policy analysts contend that MNRE should get its act together to demonstrate better results so that more private entrepreneurs would smell opportunities in the green field to tap literally and figuratively.