Opinions

Solar Energy Market: Paradigm Shift in India’s Power sector

- Gautam Das, CEO and Co-founder, Oorjan

Solar’sTime Economy and the environment have to go hand in hand for sustainable growth. We have paid the price for economic growth at the cost of environmental damages. Fossil fuels, like petroleum and coal, are highly polluting and depleting at an alarming rate. Global warming and escalating pollution levels have endangered our future. Climate change and natural calamities are becoming new normal! This is the time to act before it escalates and impacts our future further.

Solution comes from renewable energy and solar energy is one of the most viable sources of energy. However, the solar energy ecosystem in India is new and evolving fast and still there is a long way to go. All partners like Discoms, solar power producers, financiers and consumers need to be part of the opportunity to make it grow fast. There have been significant improvements in efficiency and commercials of solar energy technology over recent years. The cost of production or procurement of solar energy is as low as Rs 2.5/ unit for ground mount solar. For rooftop, the consumer may enjoy a healthy return on investment as high as 40% depending on the existing tariff category. Adoption of solar is both commercially viable and environmentally responsible. It fetches healthy returns for the investor and/ or consumers, and adoption of solar energy should be facilitated by the government and authorities.

The Discom Challenge Discoms, in spite of having near monopolies over power procurement and supply for years, are financially weak and feel threatened by new energy sources primarily Solar. Financial health of these discoms are poor not because of solar or renewable energy but primarily for – 1) large capital investment in power generating infrastructure and maintenance with unviable economics, 2) subsidy burden to supply power to priority sector or segment at lower unit rate, 3) managing suboptimal utilization (scheduling) of generating facility vis-a-vis demand, 4) operational inefficiencies – to mention a few reasons. Discoms should not feel that solar will make their financial health poorer because solar is not the cause of their troubles in the first place. In fact, Discom should try to procure more power from solar IPP (Independent Power Producers) to reduce the average power procurement cost and avoid direct capital investment in generating facilities. Power sourcing at lower cost from IPPs would improve Discoms’ financial health and burden of higher capital investment in power producing facilities. So, collaboration between IPPs and Discom is a better way to move forward and co-exist.

Transmission is easier With today’s advancement in technology, the procurement and transmission of renewable energy is anyway efficient. In the longer term, the distributed solar generation will increase operating efficiencies of the energy market as the procurement and supply can be better managed in smaller circles and transmission loss can be optimised. Discom at best may charge a reasonable fee (say less than Rs 1 / unit) for exported units in case of rooftop projects to move forward rather than opposing net-metering.

Achieving Solar’s Potential India has been highly dependent on import of crude oil and has a high current deficit. Adoption of solar energy will improve the trade deficit, create new jobs and also boost the made in India mission. However, the new businesses (solar) are facing a few challenges like lack of uniform and predictable policies. Net-metering policies and timeline, and open access charges are unpredictable if not unfair today! We would appeal to the governments and/or nodal energies to make it pro-consumers and new businesses.

Solar energy has the potential to fuel the economy to a new height while protecting the environment, and we must adopt it. Power sector is witnessing a shift where dominance of discoms will go away, and collaboration amongst all partners like power producers, discom, financiers, consumers and co-existence will be the mantra to move forward. It’s just a matter of time and the earlier the better.

As Renewable Firms Prepare For Appeal, Its ‘Progress’ Vs Species For the Great Indian Bustard

It has become clear in recent weeks that the relevant solar developers and their associations will shortly file a review petition in the Supreme Court, for an order on April 19, where the court declared that power lines in the area considered native for the Great Indian Bustard (GIB), must be built underground, to prevent deaths of the bird from overhead powerlines. The other bird involved here, the lesser florican also faces extinction.

For Solar developers that hoped to develop projects in the region, spread across Rajasthan and up to Gujarat, the order came as a rude shock, as underground power lines for the projects planned in the area would take up costs by upto Rs 30,000 crores by some estimates. And places almost 20 GW of solar and wind projects at risk. Developers involved range from Adani Green Energy, ReNew Power, Acme Solar and O2 Power to many more who hoped to build in the area. For the Ministry of New and renewable Energy (MNRE), usually supportive of developers, the issue is a piquant one, as it had also supported the move in an earlier order in Feb 2019.

The power line issue came up due to the GIB’s unique traits. Ata height of 1 metre, and weighing upto 18 Kgs for adults, GIB’s can fly, but do so without the agility of smaller birds, and combined with poor frontal vision, that makes them at higher risk of hitting aerial objects, or in this case, power lines or wind energy blades. Both usually turn out fatal for the bird.

With the species on the verge of extinction (numbers are claimed to be under 50 now), the SC was constrained

to order drastic measures, and hence the move to shift power lines underground by a three judge bench of SS Bobde, AS Bopanna, and V Ramasubramanian. The order also mandated diverters for existing lines, with a committee to decide on the feasibility of the underground option for all upcoming lines. The committee itself is a three member body consisting of a member each from the MNRE, The Corbett Foundation, and the Wildlife Institute of India.

The court judgement went in to great detail to lay down ground rules for what have been described as priority and potential areas in the region for the bird’s habitat. While priority areas require fencing to protect the bird eggs (it lays them on the ground) from predators, the potential areas is where the court has decreed underground lines as priority. Technical objections have been brushed aside, with the example of the 10 km underground power lines by GETCO for the safety of Greater Flamingos in the Khadir Region of Kutch.

So what is the probable way out here? It is obvious that an extended legal tussle will do as much damage, considering the time it would take developers to apply for and get compensation by citing a ‘change in law’ event. Price increases of upto 20 percent have been estimated, should developers need to build transmission underground where feasible.

As seen by the court’s approach to existing overhead lines, where ‘diverters’ have been mandated, it is obvious that the court is actually quite willing to be ‘pragmatic’ about the issue, having touched upon financing the whole exercise of fencing too, from the Compensatory Afforestation Fund Management and Planning Authority (CAMPA), which has enough funds.

However, the fact remains that to many people, the poor bird will be seen as a cost to pay for progress, and in this case, green energy, that makes it a stronger case in their view. Plus, they will contend that this will hardly close the chapter for good, as not only is survival of the GIB species susceptible to many other risks, other development pressures like more roads, railways etc will not abate in the near future.

Countering that is a view that the whole approach of viewing grasslands as ‘wastelands’ effectively, that do not need to be seen from the prism of environmental impact is incorrect, as these arid and semi-arid grasslands do support a wide variety of unique flora and fauna. That is an issue where even the court has been consistent with previous court attitudes, which frankly do not quite appear to be as convincing on the weight of scientific evidence.

The GIB species, on a per member basis, has probably become one of the most prized species in the country. There is a strong case for a much better funded, targeted conservation effort here.

One hopes that a quick solution, which requires all stakeholders to cooperate, will involve ‘abatement’ of some costs at state and central government level, matched by slight increases allowed to developers (bids have been amongst the lowest for projects in this region) , and yes, use of the CAMPA funds as they were meant to be. It is no one’s case that with extreme climate events increasing in intensity, underground infrastructure is not necessarily simply a more expensive option. It can also be more resilient, and in doing so, preserving a prized bird species that has been under assault for centuries should be considered a bonus. With the advent of the novel Coronavirus, the Indian economy is witnessing a major slowdown. While the nation is fighting the virus with all its might, businesses across sectors are reeling under the tremendous pressure of sustaining themselves. The ground reality of the Indian solar sector is no different. Even though the country has the potential to disrupt global frontiers in the long run, prompt measures need to be taken to provide immediate respite to the presently crippled domestic solar manufacturing sector.

While we appreciate the Government’s measures to aid the homegrown solar module manufacturers with various favorable policies and schemes like Atmanirbhar Bharat, PLI Scheme and the introduction of Basic Customs Duty, we believe that the Government needs to urgently ramp up domestic production of raw materials to enable us to increase manufacturing capacities. Additionally, we also need to invest in R&D to introduce innovations that will help us increase output without impacting manufacturing costs. Presently, the country lacks a holistic manufacturing ecosystem to produce raw materials at competitive prices locally. Uncertainty may even discourage domestic players from purchasing Solar modules from Indian manufacturers ahead of the expiry of Safeguard Duties in July 2021. As the BCD comes into effect in April 2022, with no duty barriers on imports for 9 months, India will become a dumping ground for solar modules. Moreover, it is imperative to protect the present interest of the domestic manufacturers and infuse confidence among them.

While we are positive about the government’s support to the sector, transparency and clarification on existing policies will go a long way in bringing the manufacturers at ease.

Furthermore, while the recently announced PLI Scheme guidelines aims to uplift the sector by boosting manufacturing of high efficiency PV modules locally and generate employment, but the allocated amount of funds is inadequate. To completely discourage dependency on imported modules, more funds need to be sanctioned, which will allow the manufacturers to set up local units and achieve economies of scale thereby helping the country fulfill its ambitious target of 175 GW by 2022.

The solar sector is recouping from the headwinds caused due to the second wave and requires immediate measures to bounce back to business. At the grass root level, we are in dire need of policies that are reassuring and corrective. If reforms are not implemented, it will lead to a shutdown of units in India and risk 300,000 jobs. The solar sector implores the government to stimulate the sector on its path to progress by first paying heed to our struggle to survive.

Is India on a delusional path to progress?

-Dr. Hitesh Doshi, Chairman and Managing Director, Waaree Group

How The Pandemic Hastened Move To Last-Mile Delivery Through EV In India

Akash Gupta

Co-Founder & CEO of Zypp Electric

Introduction

The sudden and rapid increase in the demand for e-commerce in recent years has been a catalyst for the surge in last-mile services countrywide. The surge in COVID19 cases all across the world and growth in the numbers of online shopping has pushed the importance of last-mile to the forefront of the overall supply chain process. Among all the industries of the country which were impacted by the pandemic, e-commerce and last-mile delivery showed the most resilience and recovered strongly in no time. With the surge in online shopping, last-mile delivery firms have adapted to this ‘new normal’.

The Covid Effect

The two-wheeler and three-wheeler segments continue to dominate the Indian electric vehicle (EV) industry. Even after the Covid-19, the EV market will recover swiftly. In the EV segment, E-rickshaws, e-autos and e-two wheelers are the most promising segments for electrification in India and are expected to account for over four million units by 2025.

Pressure to do more for the environment, higher taxes on fossil fuels, digitally connected EV’s and a much better power grid has meant that the conditions for shifting to EV’s have coalesced for Ecommerce firms. The shift to electric

mobility and last-mile delivery through EV has become necessary now. Market and governments both have succeeded in demonstrating that electric vehicles could deliver the practicality, sustainability, safety, and affordability characteristics expected from them. Mobile internet, automation, the internet of things (IoT), cloud computing, advanced analytics, renewable energy are some areas of innovation and technology have been adopted to bring about changes in ways of traditional systems of functioning especially this time when the whole world is suffering from the pandemic.

EV Last-mile delivery market During Covid-19 Pandemic

Last mile delivery consists of almost twofifths of the total logistics costs and this ensures the leading players will have to come up with newer innovative solutions. Adoption and Implementation of many modern technologies in last-mile delivery has been accelerated during the pandemic and it will continue to do so in the aftermath creating a competitive advantage among key players in the industry. Government bodies have also helped to adopt the EV last mile delivery during this time . India emergence as one of the the fastest growing economies in the world, where last-mile delivery of goods and services have played a crucial role in unlocking the growth potential, where we can expect a steady rise in consumer spending in the post-COVID-19 world.

Last mile delivery companies have to take major steps in this direction to fast-track EV adoption for last-mile delivery with EV fleets. During the pandemic as well as after the pandemic, to build an EV-led last-mile delivery ecosystem will have to face many challenges like high cost, range anxiety and scarcity of charging stations that need to be addressed first. During this time, improvement in the infrastructure has also pushed to witness faster adoption and deployment of EVs for last-mile delivery. And the situation will continue to improve even in a post-pandemic world.

One of the key enablers for growth in the market during Covid-19 has been the supply chain infrastructure built by last-mile delivery players and third-party new-age logistics players (3PL). The customers from tier-2+ cities and urban towns have been able to place orders online due to the growing impact of these players. Even before the pandemic, India was the fastestgrowing last-mile delivery market and COVID-19 furthered the trend. It has disrupted the market and today, even after cities opened up, a large number of consumers are not going back to the old normal. Enterprise-focused EV last-mile delivery services have emerged to serve this market. COVID-19 acted as a catalyst for contactless, unattended and autonomous delivery technologies, these factors also helped in the surge in the demand for EV last-mile delivery. Increased EV penetration occurred due to regulation and reduced battery costs, producing a positive total cost of usage (TCU). EV last Mile delivery in the post pandemic World

The COVID-19 impact in this scenario also includes the emergence of new hybrid business models. In today’s world, customers usually prefer to have control over deliveries in the last-mile delivery. This trend has strengthened during the pandemic. Now, last-mile delivery is no longer about offering tracking details. Customers now want facilities to interact with the service providers so that they can go for lastminute changes.