Policies Affecting the Stakeholders

Indian Government

Photo by Cytonn Photography on Unsplash

One of the most sustainable forms of energy developed in the history of human evolution undoubtedly are Solar Energy. In the Indian context, we have been harnessing the power of the sun ever since the early 1970s and since then steps are being taken towards building a tenable base in the form of renewable energy, with the support of the government. It has proved itself to be one of the fastest developing industries with a leap of 53% increase in solar installed capacity- from 17 GW as of Q3 CY 2017 to 26GW at the end of Q3 CY 2018. As of 31^st October 2019, it has reached a milepost of 31.696 GW of installed capacity. [1] 

In this context, it must be noted that the Indian government had an initial target of 20GW capacity by 2022, which has been achieved four years ahead of its schedule and as a result the target has been raised to 100GW of solar capacity (including 40GW of rooftop solar. 60 GW of overall solar) by 2022, with a target investment of US$ 100 billion. In 2018, the late Minister of External Affairs, Sushma Swaraj issued a statement as an introduction to IEF dialogue in the 16^th IEF Ministerial Forum. She mentioned that “India has taken a lead in International Solar Alliance with 60 solar rich countries”. [2] 

The Solar Energy Corporation of India (SECI) has also started tendering projects outside the JNNSM Batch program. It has initiated the Inter-State Transmission System (ISTS) scheme, wherein projects are planned for connection with the ISTS grid directly. Under this, SECI has already allocated 5 GW and has another 2.4 GW in the tendering phase. It has also tendered close to 2.7 GW and allocated ~3 GW under other schemes till July 2019. With propulsion from the central government, states are taking active steps towards achieving aggressive targets by 2022. A total of 9.5 GW is under construction based on already allocated schemes and another 4.2 GW is in the tendering phase based on released tenders under various state policies. The CPSU program under JNNSM has been extended to 12GW in February 2019 and the government is encouraging cash-rich PSUs to set up renewable energy projects. NTPC has already commissioned a total of over 870MW of capacities, allocated 2.9GW and tendered a further 2.2GW under various schemes. The Indian Railways has committed itself to 5GW of solar power by 2025. [3] 

World’s largest solar park named ‘Shakti Sthala’ was launched in Karnataka in March 2018 with an investment of Rs 16,500 crore (US$ 2.55 billion). However, growth in rooftop solar capacity needs to be supported by improvement in the discoms infrastructure, a continuation of net metering regulations/benefits and other regulatory incentives. In fact, in a report issued by Deloitte Touche Tohmatsu India, LLP ( stated that much high power-consuming SMEs (Small and Medium Enterprises) were hesitant about installing rooftop solar panels because of the perceived performance risks. [4] 

Another challenge that lies ahead is that the land price is costly for acquisition in India. The amount of land required for utility-scale solar power plants is about 1 km² (250 acres) for every 40–60 MW generated. A solution to this could be to utilize the water-surface area on canals, lakes, reservoirs, farm ponds and the sea for large solar-power plants. Due to the better cooling of the solar panels and the sun tracking system, the output of solar panels is enhanced substantially. These water bodies could also provide water to clean the solar panels.

It is expected that by the end of 2040, approximately 49% of the total electricity will be generated by renewable energy and an estimated 66% of the solar energy cost (as compared to current costs) will be clipped with the introduction of more efficient batteries for storing electricity. Use of sustainable forms of energy as a replacement to coal will save India Rs 54,000 crore (US$ 8.43 billion) annually. [5]

References:

[1] IBEF, Knowledge Centre., “Solar Energy Generation in India: Lighting Lives”, January 17, 2019. Blog.

[2] Deloitte., “The Evolving Energy Landscape in India; Opportunities for Investments”, April 2018. Print.

[3] CRISIL., “Sector Report: Solar Energy”, September 01, 2019. Report.

[4] Deloitte., “Energising MSMEs with Rooftop Solar”. Analysis.

[5] IBEF., “Renewable Energy Industry in India”, September 2019. Blog.

French Government

Photo by Cytonn Photography on Unsplash

What are the milestones of the fostering of the solar industry by the government in France?

2000

Support takes the form of obligation for electricity suppliers to purchase these energies. The additional costs of the tariff are reimbursed to the electricity supplier through a tax on electricity bills known as the contribution to the public electricity service.

2010

Announcement of a 12% reduction in photovoltaic electricity feed-in tariffs by electricity suppliers

A report by the Inspectorate General of Finance argues that photovoltaics, due to low national production, contributes 2% to France's trade deficit ('800 million in 2009)70, which is a source of a "major financial risk" for consumers.

Politicians are protesting against the import of large quantities of low-cost Chinese photovoltaic panels into France.

2013

Minister of Ecology and Energy announced the doubling of the objectives set for 2013 in terms of installed photovoltaic MW.

2015

The reform of the French aid system has been incorporated into the law on energy transition for green growth. It maintains the historical system of support for the sector.

2018

The Minister of Ecological and Solidarity Transition presents a "mobilization plan to accelerate the deployment of solar energy". The army is committed to making more than 2,000 hectares of land available before 2025 to develop photovoltaic projects.

Fostering of self-consumption; The Ministry's plan promises increased financial support for solar water heaters, and a simplification of the urban planning code to facilitate photovoltaic shades on parking lots or solar greenhouses.

How did policies affect the stakeholders once the industry was commercialized?

Two historical stakeholders have worked together make this new renewable energy attractive: The CRE and EDF.

-   The CRE « Commission de Régulation de l’Energie », created in France in 2000, is a committee whose role is to regulate the energy production sector. Every public offer will be presented to them and if different companies or customers have a litigation they can ask for advice and expertise before going to court.

-   EDF, a state-owned company, had a position of monopoly in the production of electricity.

For political reasons, the French energy market has undergone a wave of privatization and these two players have had to give way to new entrants from the private sector attracted by the subsidies discussed in the second part of this article.

Today 128 companies are registered as solar energy produces. You can find very big companies like EDF, Vinci Energies or Bouygues energy and services that are real industrial French champions, but also very small companies. In 2018 more than half of the companies have installed less than one MW powerplants.

Thus, thanks to this new order many companies were able to enter the solar industry. Subsidies are organized in a way that the final customer doesn’t have to pay a higher price to have clean energy. The commercialization of solar energy

What incentives has the government offered to manufacturers and suppliers? Did it benefit the sector?

To foster the solar industry very strong incentives have been granted to French companies. The government guarantees that electricity produced with solar energy will be bought at a higher price (121,5 euros per MWH). Compared to nuclear energy which is sold 49,5 euro per MWH or the grid or gas at 70-100 euros per MWh, this price is very attractive for the producers. On the other hand, technological innovations make it even cheaper to invest in infrastructure.

The government also gives direct subsidies to small and young solar companies to help them in the early years of their creation for them to be able beneficial financially from scratch.

Besides companies that will install solar panels on their rooftops or integrate some form of solar production in their real estate constructions will have a reduction of tax payments. In 2018 the state distributed 1.2 billion euros of tax credits to companies that had solar programs.

All these policies benefited the sector and are in line with the environmental policies and objectives set in France.