After the recent WTO ruling against India on the issue of local content of solar panels, India must revise its renewable energy strategy in favour of wind power. Instead of imported solar panels, India’s renewable capacities can use locally-manufactured windmills.
By Amit Bhandari and Kunal Kulkarni*
Following the adverse February 24th ruling on the issue of sourcing local content in solar panels at the World Trade Organization (WTO), India must rethink its renewable energy strategy in a manner that plays better to its strengths. Now that India is unable to set local content requirements for solar panels from the government-funded National Solar Mission , it is time to shift from the current national strategy of relying primarily on solar power to meet clean energy targets, to focus on wind energy, which has a similar potential and already has local manufacturing and knowhow.
Given the current realities of the Indian power sector, this can be an excellent opportunity. Here’s why.
First, the technology of solar power continues to evolve rapidly, with improvements in costs and efficiency. For instance, just one firm—China’s Trina Solar, a top global manufacturer—has set nine world records in solar cell efficiency and power output during 2011—14. This means anyone buying and licensing such cutting-edge technology will find it outdated in a few years. Trina Solar can survive because it is an innovator, and has, so far, applied for 980 patents, of which 575 have been granted. Indian companies in this field are not innovators like Trinar, so will have to keep spending on new technology, which in turn, continue to be outdated.
Secondly, there is the issue of finance. Indian solar panel manufacturers such as Moser Baer and Indosolar are both making losses. Private power generation companies like Adani Power, Reliance Power, GVK, GMR, and Lanco are all highly leveraged and burdened with ongoing projects. None of these companies can undertake large-scale capital expenditure.
India has set a target of 175 gigawatts (GW) renewable energy capacity by 2022. The bulk of this capacity, 100GW, is supposed to come from solar power, with other sources, primarily wind energy, playing a secondary role. This must change in favour of wind energy.
India already has an advantage in windpower which accounts for 65% of the renewable energy capacity in the country. India’s wind energy has recently been revised upwards, to 300GW
High capacity turbines, their blades and other components are all manufactured in India by a number of Indian and foreign manufacturers. Innovation is also taking place in Indian labs. For instance, Suzlon, one of the global leaders in wind energy, has recently tested a 2.1 megawatt (MW) wind turbine atop a 120m high tower. This is cutting-edge technology : windmill blades more than 50m long but light enough to catch the breeze, and 40-storey towers that can take on the multi-ton weight of the turbines and blades. Suzlon has over 350MW in domestic orders for these turbines, indicating some progress already.
Wind has one more advantage over solar power, and that is of land use. Solar farms require 2 hectares (ha) of land for every megawatt of capacity, i.e., 100GW of proposed solar capacity will occupy 200,000ha of land. As solar panels completely cover the ground, this land is thus rendered useless for either agriculture or wildlife. Windmills, on the other hand, occupy only a part of the land while the remaining land can continue to be used for other purposes.
In the run-up to the December 2015 Paris climate talks, India announced an ambitious plan for renewable energy. One of the expectations from the talks was that the developed world will share clean technologies, making it cheaper for the developing world to make the transition to clean energy. That has not happened. The WTO ruling on local sourcing also means India will find it difficult to use its large market size to build a local manufacturing base.
Given these realities, the Ministry of New and Renewable Energy must make haste to revise the commitments made in Paris in favour of wind energy, and linking it to the Make in India programme. That will create high-tech manufacturing jobs and innovation in one of the very few industries where India has an existing global advantage.
About the authors:
*Amit Bhandari is Fellow, Energy & Environment Studies, Gateway House.
*Kunal Kulkarni is a Senior Researcher at Gateway House.
This feature was written for Gateway House: Indian Council on Global Relations.
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