Indian Prime Minister Mr. Narendra Modi is all set to do business this week in the US, and renewable energy is really big on his agenda. As per news coming in from several sources, Mr. Modi will seek assistance of the United States to set up 100 GW each of solar and wind power over the next 10 years. Under the current Indian scenario, the cost of setting up a MW of either solar or wind power is about $1.1 million (for multi-MW grid scale installations, solar rooftop would cost more). If you do the math, that’s a proposal of over $220 billion!
Logo of the “Make in India” program with a backdrop of solar panels (Source)
Just to put these numbers in perspective (200 GW), India currently has a total installed power generation capacity of about 250 GW. However due to issues of fuel availability, supply chain and sub optimal capacity utilisation, only about 55% of this capacity is actually utilised. Hence the race to shift to solar and wind. It is expected that Indian public sector units — the thermal power major NTPC and coal producer CIL — will take the lead in implementing this initiative on account of their deep cash reserves. To take this forward, a working group composed of Indian and US stakeholders is likely to be announced during the visit.
Not wanting to disturb the growth trajectory of solar power, the Indian government had decided about a month back to do away with solar dumping duties against a host of countries, including the US. There have been reports however that the government is now working on a plan to support the local solar manufacturers through projects initiated by defence sector and government agencies, something which is allowed under WTO rules.
Just before his visit, Mr. Modi unveiled a program in India which goes by the name of “Make in India.” The program envisages creation of a friendly investment climate to promote investments in 25 important sectors, including renewable energy. India is keen to convince US companies to set up manufacturing hubs for renewable energy at home. In the run up to his visit, Mr. Modi has been successful in getting commitments from China and Japan to invest in the Indian renewable energy. It seems the US has bigger action waiting to happen.
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