One of the biggest talking points of the India-France Business Summit in January 2016 was the inauguration of the International Solar Alliance (ISA). The ISA will operate from Gurgaon and will serve “as a common platform for cooperation among solar resource rich countries lying fully or practically between the Tropics of Cancer and Capricorn”. France’s President Francois Hollande, who inaugurated the ISA headquarters, has pledged EUR 300 million to develop solar energy in the next five years (though he hasn’t specified how the production will be achieved or sustained). The Indian Government will provide $30 million to form a secretariat for the Alliance and will also support it for five years.
What is truly fantastic from an Indian perspective is that taking the lead in this project will see the Secretariat of the ISA in Gurgaon. This could position India as an energy leader of sun-rich developing countries – which is a good position to be in. It showcases India as a strong contender internationally and could generate job opportunities of a global nature, something that has been missing in the country. Almost all think-tanks and research and policy institutes in India analyse Indian policy or global trends affecting Indian policy. For better or for worse, our expertise has been inward looking. The ISA could be the beginning of more macro-level analysis and discussions of international energy markets.
From an Indian standpoint, for the ISA to achieve its maximum potential, two things must occur simultaneously. Firstly, the ISA’s mandate should be concretely and pointedly different from other energy agencies (such as the International Renewable Energy Agency – IRENA – in the UAE). This was already stipulated at the ISA inauguration. However, the ISA has a vision of making efforts to “provide a platform for sharing experiences from similar countries” and IRENA wants to “develop new synergies, facilitate dialogue and share best-practice”. These statements are generic, similar and have been over-repetitive in international structures.
To break down the working paper of the ISA, the Alliance wants to create a forum where an exchange of experiences can occur to deploy solar energy, while agreeing that access to energy technology and finance are the biggest obstacles in achieving energy security. It is recommended that the real effort should be to minimise administrative procedures that drain out funds. The ISA should be mindful of not forgetting its ultimate objective i.e. increasing solar energy generation among countries abundant in sunshine but cash poor. In several international processes, the ultimate objective lies neglected because funds have been utilised in finding consensus in conferences. India could potentially change that by making all ISA programmes pointed and crisp such as the idea of linking France’s funds with PM Modi’s Smart Cities Programme to increase solar energy in public lighting in the proposed smart cities. It will be interesting to see whether the BJP government will be able to implement it.
Secondly, India should have a clear vision of its internal energy policy. The country has committed operational solar power capacity of 100 GW by March 2022. The current installed capacity is just over 5 GW. Successful models of a clean energy system must move away from fossil fuels (no matter how slowly) towards renewables. In fact, once subsidies are slowly removed from fossil fuels, that revenue should be used to subsidise renewable energy in a fashion similar to a feed-in-tariff. The feed-in-tariff should also be eventually removed once solar prices become competitive enough, failing which the tariff becomes counter-productive and a fiscal burden.
Surprisingly, at the same time that President Hollande and PM Modi were inaugurating the ISA headquarters, there were news reports (here and here) about the Indian government asking Coal India to meet a target of 550 million tonnes in 2016. Understandably, India wants to reduce its coal imports by harnessing the vast coal reserves that already exist. However, this also sends out a signal that we ourselves don’t believe in our renewable energy target or that renewable energy could be a panacea to the lack of energy. There seems to be reluctance in commencing the process to reduce the number of coal-fired power plants. While knee-jerk policies to affect coal production or usage must not be advocated, increasing coal production and usage is completely contrary to the objective of arresting greenhouse gases.
Further, India does not yet have policies that attempt shutting down of defunct coal-fired power plants. Using taxpayer subsidies to keep these plants functioning is a huge step back in the vision of India as a sustainable energy leader. Meanwhile Coal India has been trying to increase the production and sale of coal and has been falling short of mandated targets, which is an increasing cause of concern for the Indian government. It would be helpful to understand how the government is planning to tax and fund coal generation and solar energy production and how these two seemingly incongruent policy objectives would interact. A detailed paper addressing these concerns would be very welcome to understand where India stands in the global energy sphere.
Ipshita Chaturvedi is an alumna of the West Bengal National University of Juridical Sciences and the University of Melbourne. She works for a think-tank in Mumbai.