India To Propose Global Collaboration In Solar Power R&D To Cut Costs

January 25th, 2015 by Smiti

In an attempt to boost its image as a global leader in the solar power market, India is planning to propose a collaboration among nations to promote research and development with an aim to reduce costs.

The Indian Prime Minister, Narendra Modi, has floated this idea among his council on climate change. According to the information provided by the ministry for environment and forests following the council’s first-ever meeting, the Prime Minister proposed the countries with high solar energy resource should come together to form an international group and accelerate R&D efforts.

The timing of this proposal and the idea itself is very interesting.

Solar photovoltaic (PV) modules prices have fallen significantly over the last few years. This has also led to a mind-boggling decline in solar power generation costs. The tariff bid placed by Saudi Arabia’s ACWA Power for a 100 MW solar PV project is a clear example to the extent to which the cost of generation has fallen. The successful bid of $59 per MWh is the lowest ever anywhere in the world.

This bid is only slightly above what several Indian project developers have quoted for project auctions under the National Solar Mission as well as several state-level auctions. With auctions for several gigawatts of capacity planned in the short- to medium-term it is highly likely that Indian developers would set a new record for the lowest-ever PV bid.

The solar PV tariffs in India have fallen from around $280 per MWh to around $80 MWh over the five years. So one would wonder what is the need of this collaborative effort to further reduce the costs?

The answer may lay in the fact that India plans to have an installed solar power capacity of 100 GW by 2022. In order to add about 97 GW capacity over the next 6-7 years India would require about $80 billion dollars. Naturally, most of this capital would have to come from international sources. One would assume that it would be easier to get access to such large amounts of investments as a lobby rather than going at it alone. If such a collaboration among nations is undertaken India would be the largest market alongside China, which also has a target of 100 GW by 2020.

The other interesting aspect is the timing of the proposal. 2015 is the year the world is expected to agree on a new climate change treaty. The new treaty is expected to be negotiated and approved in Paris during the climate change conference planned for December.

During the meeting of the council on climate change the attending members also agreed that India would not be proposing any absolute targets to reduce greenhouse gas emissions. Instead the government has been asked to quantify the emission reduction achieved through the existing capacity and capacity yet to be commissioned.

Several developing countries are expected to take the same approach as they look to defect any pressure from the developed countries to take up mandatory emission reduction targets. India would like to push its position more effectively through a coalition of countries. Such a collaboration on solar energy is also important to India as it now stands isolated amongst the BASIC group of countries.

The Indian Prime Minister is known for his out-the-box approach towards solving big problems. The proposal for an international solar energy collaboration, with a possible alternative agenda, may very well be the latest example of his witty approach towards issues of national interest.

Image Credit: Narendra Modi via Flickr









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