Accompanied by blaring music, delegates took their seats for the opening ceremony of the 12th REI, currently taking place in Greater Noida, just outside of Delhi. After performing a lamp lighting ceremony – aptly signifying the movement from darkness to enlightenment – the speakers took to the stage, to stand for the national anthem, and receive large bouquets of flowers.
This pomp and ceremony, along with the never ending music – a live band accompanies the speaker system in the hallways – mirrors India’s ambitions to become the biggest renewable energy market globally, a goal outlined earlier this year in Germany at Intersolar Europe.
Manu Srivastava IAS, Principal Secretary, Govt of MP, Dpt of the Ministry of New and Renewable Energy (MNRE) spoke of how renewables are a key focus for the Indian Government, with a more holistic approach being adopted this year, to include such things as e-mobility, storage and data analytics. By May 2018, he said, renewables covered 33% of the country’s energy capacity.
Yogesh Mudras, Managing Director, UBM India said that India added more renewable power generation capacity than conventional in 2017. Furthermore, half of the world’s 10 largest solar parks under construction are located in the country. “All this is acting as a huge pull for international investors and equipment suppliers,” he said.
However, he added, “Along with the positives … plenty of challenges are also making their presence felt in the clean energy industry. Fierce competition, slowdown in new tender issuance resulting in all-time tariff lows, increase in costs with a corresponding increase in module prices, GST rollout, anti-dumping duties on raw materials that are making many of the recently auctioned projects unviable, are some of the issues we get to hear about.”
Justin Wu, head of Asia Pacific at Bloomberg NEF, went on to share three figures, which he said signify where India currently is in the energy transition:
- 66% – the share of solar and wind in India’s electricity generation mix by 2050. This will be one of the highest in the world, he said, and above China and the U.S. This figure, he continued, signifies both the long-term growth potential of renewables in India, and the ambition of the country to build out much more capacity;
- 71% – the penetration of air conditioners in businesses and households by 2050, up from 5% currently. This may sound strange, but Wu argued that air conditioners offer a big opportunity to help integrate increasing amounts of renewables into the grid; their advantage being that they tend to consume a lot of energy at peak times of the day – read noon and early afternoon – at the same time as solar energy reaches peak generation. This is a unique feature for India, and one it can capitalize on; and
- 2,000 – the number of electric vehicles (EVs) sold in India in 2017, out of around one million globally. This is not a big number, said Wu, but EVs are becoming more cost competitive, and will comprise around a third of Indian car sales by 2040. This will impact on infrastructure, fuel and electricity. What happens in India, he continues, will be significant for how other, developing countries, evolve in this area.
Make in India
In a session on the country’s Make in India policy, Bridge to India’s managing director, Vinay Rustagi, moderator of a panel which comprised representatives from Sungrow, Adani, GTAT, Tata, JinkoSolar and Cleantech Solar, said that manufacturing has still not taken off in the Indian solar sector, despite the introduction of a number of government policies over the years.
Before he passed the microphone to the panelists, he said that, according to Bridge to India research, over 80% of the economic value and job creation in the solar industry is located in the downstream sector, dealing with issues like design and installation, etc.
He posed the questions: What will it take to successfully establish a manufacturing industry in India?; and Is manufacturing even necessary for the country to achieve its goals? Overall, the consensus was that there is a lack of certainty in the market, a lot of which was created by the toing and froing over the safeguard duties.
Rakesh Tiwary, CFO at Adani, a Gujarat-based renewable firm, which has 1.2 GW of operational module and cell capacity at its Mundra Solar PV Ltd (MSPVL) factory, said that establishing manufacturing leads to the development of skills and jobs; and that currently 80% of capital expenditure is flowing out of India, due to a lack of a domestic landscape.
U.S. equipment maker, GT Advanced Technologies went on to say that the government should be focused on policies to boost manufacturing. The spokesperson said there is a need for both scale, and technology, in order to be cost effective.
Donal Leo, Managing Director, Asia South & Country Manager, India for JinkoSolar said the company is looking to the Indian market, which is attractive as it has no trade barriers with the U.S., for instance. However, it takes time to set up a manufacturing facility, and for long term development, stable policies need to be in place. He added that JinkoSolar wants to stay in the Indian market in the long term, and is keen to work with the government and IPPs to address the uncertainty.
Talking from a client perspective, Jerome Baco, COO, Cleantech Solar, which develops and sells energy to corporate clients, said the most important equipment needed to deploy capacity currently has to be imported – there is no other choice. He would prefer to buy local, as importing comes with a number of risks, like fluctuating foreign exchange rates, complex shipping and logistics, and regulatory risks, such as tariffs. Uncertainty is freezing the market, he said.
Sunil Badesra, head business dept. at Sungrow (India) Private Limited, which set up a 3 GW inverter fab in July, added that infrastructure is a challenge, as is finding a suitable location. However, India is a good base to not only serve the domestic market, but also to export to others, like the Middle East and the United States.
The latter will now be particularly pertinent in light of President Trump’s newly announced 25% inverter tariffs. However, for Sungrow, it will take time before it can export to the United States, as Badesra told pv magazine in an interview afterwards. Indeed, he said the company still needs to apply for the required certification. As such, it would only be able to export there around mid- to end-of next year.
Currently Sungrow is focused on strengthening initial production of string inverters. These are much easier to manufacture than central inverters, said Badesra, meaning any issues can be ironed out before they focus on ramping up production. The aim is to start producing central inverters in around half a year.
He said Sungrow plans to offer a complete turnkey solution to the Indian market, in the shape of a MW-sized inverter and transformer packaged together. However they still need to find the right partner for the transformers. “Getting containers in India is a challenge,” he said.
Speaking to pv magazine in the morning, Mayank Mishra, regional sales director for Huawei Telecommunications India Co. Pvt. Ltd said the Chinese company is currently evaluating manufacturing opportunities in India. He points to the fact that Huawei already has a manufacturing facility for communication technology equipment in Chennai and, as such, it would only take around six months for it to add an inverter line.
However, he said Huawei is a US$92 billion company, and when it decides to invest in a new venture, it will do so at a large level, and this decision takes time.
He added that the Indian market has slowed down this year, with inverter orders dropping from around 2 GW in 2017, to orders signed this year for just over 1 GW, because of the uncertainty created by the lead up to the imposition of the safeguard duty. 2019 is looking better, he said, with 1 GW of orders already secured. He could not say what figures were like for the U.S. market however.
REI is open until Thursday, September 20. During this time, over 1,000 delegates from 45 countries are expected to attend the exhibition’s more than 750 exhibitors, and 37 conference sessions.
Watch out for more coverage this week from REI 2018, including reports from our two events, the Quality Roundtable, held today in front of a packed audience, and the Future PV Roundtable, scheduled for tomorrow at 11 am.
The article was amended on 23.9.2018 to correct the statement that 315 GW of renewable capacity had been installed in India by May 2018.