The launch of a new global multilateral body, the International Solar Alliance (ISA), is surely a major achievement for the Indian government. The fact that it already has 61 member States, of whom 32 have ratified the initiative, surely gives this organisation the necessary strength to focus global attention on the issue of greater investments in the solar power sector. The author traces the organisation’s roots and provides a glimpse into its objectives.
INTERNATIONAL SOLAR ALLIANCE (ISA): INDIA’S RADIANT MULTILATERALISM
On March 11, 2018 India led the world into a new era of a mutually beneficial multilateral effort so necessary for the survival of the humanity. The occasion was the inauguration ceremony of the International Solar Alliance (ISA) at New Delhi by Prime Minister Narendra Modi and French President Emmanuel Macon. In attendance, were over 20 other Heads of States and Governments.
ISA is perhaps the first major multilateral initiative by India since the Non-Alignment Movement of 1950s. It’s an endeavor with a difference and has become a North-South collaborative paradigm in the wake of adverse climate change. Even with the Climate Change Treaty itself under threat and President Trump announcing the withdrawal of USA, one of the major polluters, USA did become a part of the International Solar alliance and lauded the efforts of the Indian leadership.
Although India had launched its Solar Mission in 2010 it was only on November 30, 2015 that India and France embarked on the ISA initiative with the Paris Declaration that inter- alia resolved: ‘Recognising that sustainable development, universal energy access and energy security are critical to the shared prosperity of our planet, we do hereby declare our intention to support India’s proposal to launch an International Solar Alliance as a common platform for cooperation among solar resource rich countries lying fully or partially between the Tropics of Cancer and Capricorn’.
ISA has the distinction of having 121 sun-rich members of whom more than sixty-one have already signed and 32 have even ratified it. Australia, Bangladesh, Cuba, France, Ghana, India, Papua New Guinea, Sudan, Sri Lanka, Togo, the United Arab Emirates and Venezuela are among those that have ratified the agreement. The ISA was accorded the status of a multilateral treaty by the UN and came into force on 6th December last year. The treaty recognises the challenge we face globally and the need for member countries to act in a coordinated manner so that the financing requirements, technology transfer and capacity building flow unencumbered and affordable solar energy reaches all. With the establishment of its headquarters in Gurgaon, India, the projects will hopefully move with the requisite speed to achieve the desired objectives
In order to ensure clean and affordable energy for all, the ISA will need an estimated US $1000 bn until 2030 to reduce the cost of finance and relevant technologies. President Macron announced a provision of an additional Euro 700 mn for financing the objectives of the alliance. India has also allocated nearly US$ 2bn for funding solar projects from its Africa Fund for development. Already several projects have been cleared or are in the pipeline.
PM Modi, in his address recalled an age old Indian conviction, “Vedas reflects the sun as the soul of the world, it has been considered as a life nurturer. Today, for combating climate change, we need to look at this ancient idea to find a way”.
The PM also felt that the way forward to harness renewable energy included making solar technology affordable to all nations, raising the share of electricity generated from photovoltaic cells in the energy mix, framing regulations and standards, consultancy support for bankable solar projects and creating a network of centres for excellence, he underlined.
As a demonstration of India’s commitment to ISA, Modi said 500 training slots will be created for member countries and a solar technology mission will be started to lead R&D in the sector. The world has to find a way that might salvage humanity from its self-destructive course. Energy is the basic ingredient for any sustainable development. India has been seeking to find convergence among nations for sustainable growth. It has also tried to protect the interests of the developing world in the arduous Climate Change negotiations or for that matter in GATT/WTO deliberations.
Prime Minister Modi in his inaugural address also announced India’s commitment to extend nearly US$ 1.4 billion worth of lines of credit which will cover 27 projects in 15 countries. This initiative has been widely welcomed by the International Solar Alliance Founding States and the beneficiary countries. This is indeed one of the largest commitments to financing solar energy projects around the world. The projects in these 15 countries will include setting up of solar PV power plants, mini-grid and off-grid usage, irrigation, rural electrification, street lighting, solar power for urban infrastructure including for health, hospitals, colleges, schools, government establishments, low income families etc. No wonder the Governor General of Australia lauded ISA as India’s gift to the world. And French President Macron summed it up as, “Mr Prime Minister you … dream and we did it”.
India not only preached but set an example in harnessing the solar energy and has been diversifying its own energy sources from fossil fuels. It is increasing the share of renewal energy significantly and plans to produce 175 GW of which 100 GW will be from the solar energy by 2022.
Already, in 2017 India had crossed 20 GW of solar energy which is the highest growth, almost 140%, in this sector. Renewable energy capacity in India increased from 39 GW to 63 GW during the last two years. In order to effectively use energy saving devices and to supplement solar energy generation, India has distributed 28 crore LED bulbs in the last three years which have helped save USD 2 billion and 4 GW of electricity, according to PM Modi.
An Indian Union territory Diu became the first state to be fully solar powered with over 100% solar power generation. However, there are certain limitations and constraints that need to be overcome by a dynamic policy framework which should address the legitimate interests of manufacturers, producers and consumers.
As a result of competition, higher production and low input costs the solar energy price has dipped to a fairly low level in comparison to power from other traditional sources. The manufacturers and producers are concerned due to recent imposition of 5% tax apart from enhanced duties on imported photovoltaic cells and panels. In addition cost competitiveness & high transmission and distribution losses, focus of manufacture of PV cells to export markets rather than local, availability of land, complex subsidy structure, storage batteries, multiple government agencies, financing, technologies, low expenditure on R&D etc., pose significant constraints on achieving solar power generation on the desired scale.
A case in point is an invention of a SOLAR TREE by one of the labs of Council of Scientific and Industrial Research which is far more efficient and requires less space due to its vertical design like a tree. But the technology has still not been commercialised for some reason. Such gaps and issues need to be dealt with on priority.
It would be useful to ensure strategic collaborations with Lithium rich nations like Chile, Bolivia, Argentina and Australia etc., for storage battery requirements in the future. In addition, at this stage it will be relevant to take into account possible financing risks and fund availability especially the Solar NPAs in due course which also may have socio-political repercussions in future.
India is also faced with external constraints and disputes from solar panel producing countries. In 2013, and recently yet again, USA complained to the WTO that India’s solar programme created an unfair advantage and barriers against the import of US made solar panels through domestic content requirement in violation of its treaty obligations under global trading rules. WTO had given US a favourable ruling. It is another matter that under President Trump, USA has adopted one of the most stringent and protectionist trading regimes. However, since we do and will have to depend on FDI and latest technologies to achieve economies of scales our “Make in India” and consequently our solar programme will have to align with the reality of international trade and investment to stay attractive and competitive.
Challenges are many and may even seem daunting and insurmountable but perhaps the Indian trained Solar workers conveyed our resolve in their soulful rendition, “We shall overcome”.
International Solar Alliance under Indian leadership and commitment has arrived for the good of humanity and is here to stay.
Amb. Anil Trigunayat (Retd)
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of BharatShakti.in)