The 100-nations Solar Alliance launched by the Indian Prime Minister, Mr Narendra Modi, and French President, Francois Hollande, has the potential to kick start the much touted era of green and low carbon economy.
Most of the member nations fall within the two tropics (Tropic of Cancer and Tropic of Capricorn) and as such receive abundant sunshine (in access of 300 days of uninterrupted solar irradiation). These nations which include sub Saharan and Saharan countries can become the new hot spots for 21st century clean energy.
Solar power technology is versatile in a sense that it can be utilised to generate huge amounts of electricity and process heat and also compressed in bite size to build torches and lamps. This versatility offers a chance for many poor nations which are part of the alliance to embrace the technology for the purpose of energy access to its poorest sections of the society.
More than 100 nations offer huge market for solar manufacturers, battery developers, LED bulbs producers etc. It will unlock a market that would rival any in the energy space. Just how big the solar market will be can be gauged from the fact that just one country – India – alone offers a multi-billion dollar market.
India has been among the few countries working towards mainstreaming solar power in their energy mix. In 2009, just after the failure of Copenhagen Summit, policy planners unveiled an ambitious plan to install 20000 MW of grid connected solar power by 2022. Christened Jawaharlal Nehru National Solar Mission (JNNSM) it was one of the biggest project of its time.
However, that plan dwarfed in front of the revised ambition articulated by the new National Democratic Alliance (NDA) Government at the Centre. Now it wants to install 100 GW (gigawatt) of solar power by the end of the 2022. It means that India needs to install 95000 MW in a span of just 7 years.
Each MW of solar installation costs Rs 7 to 8 crore. It means installing 95000 MW will need an investment of more than Rs 6650000000000 or close to a trillion dollar. Similarly, LED bulbs, batteries, new sockets, fittings, wires, transformers and trained maintenance staff will all create a huge opportunity for employment and economic development.
While this is the sunny side of the story, let’s also take stock of the odds stacked against the sunrise opportunity. Most of the nations in the alliance are either developing or desperately poor. All they have is sunshine. What they lack are funds, trained manpower, access to technology and a deep appreciation among its ruling elite as well as policy planners about the advances made in the renewable energy space.
They are also woefully unaware about the various new business models that have emerged to harness the technology at a local level as well as its strength in meeting greater demands for higher load.
It means that the alliance will have to work on many fronts right from the start. Policy planners will have to be convinced. Developed nations who hold all the aces in terms of technology and finances will have to be engaged and cajoled in sharing technology and coughing up some money. Receiver nations will have to use that money and technology judiciously. They will have to promote home grown research and create a policy and regulatory framework which understands that the technology is still a work in progress and will keep updating and hence making the benchmarks created today irrelevant within a short span of time. Space will have to be created for constant reviews and up-gradation. Also funds will have to be generated within the country to meet the challenges of constant up-gradation and maintenance.
Enthusiasts say that cost of solar power is already coming down so this is the right time to move towards solar. They cite the example of India where the Power Purchase Agreements signed between the solar power producers and the power utility firms have seen a constant decline in per unit of power — From a high of Rs 17 per unit just seven years ago to Rs 4.2 per unit today.
However, this is a case of competitive bidding and does not necessarily reflect the true cost of production in the market. It is yet to be seen whether the producers will be able to sustain and generate quality power over a long period of time or not.
Also a part of declining cost of solar power can be attributed to very high inventory piled up in China, Germany and the US. During the first few years of JNNSM the cost declined as Independent Power Producers (IPPs) bought cheap thin film technology as well as solar panels from China and Germany. These two countries were more than willing to offload their piled up inventory as economic slowdown of 2008 had depressed the demands in both the countries for solar panels.
Now when the markets in 100 nations will open up it will lead to shortage and prices will escalate. It can be rightly argued that due to economies of scale the prices will not hit the roof but some kind of course correction is in store.
However, this is just a small challenge. The bigger problems lie in execution and maintenance of the new power system.
The Alliance secretariat that would be headquartered in Gurgaon, India, will have to work with all the participant nations in evolving a consensus on the quality of equipment that needs to be installed in the first place. Secondly they will have to take a call about which technology to pursue and which one to reject while negotiating technology transfer.
For example in the case of pager technology – it was introduced in India in 1995 when it was almost on the verge of being discarded in the West. Two years later mobiles came in and the entire infrastructure used for pagers was rendered useless. Many people lost their jobs and the equipments were reduced to junk.
The policy planners will have to be careful in weeding out such technologies to save their precious finances.
Massive efforts will also be needed to train our workforce. South Africa and an Indian Province Chhattisgarh have instituted right to skill development. It is a good beginning which should be replicated elsewhere and under this initiative people, especially, in rural areas should be trained to maintain and fix any problems that the solar plant will face.
The Solar Alliance nations will also have to pool in their own intellectual, scientific and corporate resources to slowly but steadily move away from borrowed technologies and financial models.
The national governments will have to take their own provincial governments and urban and rural local governing bodies into confidence and move forward. If they can achieve the goals mentioned above, Solar Alliance will become the trigger to usher in the age of sustainable development.
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