New Delhi: India will provide upfront capex-based support for wafer, ingot and polysilicon manufacturing under a new scheme, instead of sales-based incentives as offered under the ongoing production-linked incentive (PLI) scheme for modules and cells, according to Santosh Kumar Sarangi, secretary in the ministry of new and renewable energy (MNRE). The ministry is developing financial-support schemes for agri-photovoltaics, floating solar and bioenergy, Sarangi said in an interview.
To address 43 GW of unsigned power agreements, representing a ₹2.1 trillion investment, implementation agencies such as Solar Energy Corp of India (SECI) are negotiating project cancellations for unviable sites and securing state commitments for others. While India currently targets 50 GW of annual green energy additions to reach 500 GW by 2030, Sarangi noted that long-term net-zero emission goals may require a ramp-up to 80 GW annually. To support this, SECI is working on shorter bilateral contracts for industrial units and a contract for difference model for open-market sales. Edited excerpts:
With renewable energy capacity addition gaining momentum, what’s the next major objective for India's energy transition journey and the ministry of new and renewable energy (MNRE)?
Sustaining the momentum which we have already achieved is going to be the next big thing for us. In the current year, we have achieved nearly 48 to 50 gigawatts of RE installation, which is one of the highest in the last couple of years. So, sustaining this and even bettering this will be one of our objectives, because if you look at Niti Aayog's recent net-zero projection for 2070, they are suggesting by that by that time, we need to have about 6,000 GW of variable RE, that is wind and solar, to achieve net zero [emissions].
Even in a current policy scenario, it’s about 4,000 GW of addition, which they have envisaged. So that would require us to add anywhere between 60 to 80 GW of RE installation in future. So, the momentum which we have achieved is pretty good. But it needs to be sustained and even bettered. For the 2030 target, an addition of about 40 to 45 GW for the next couple of years should see us through for our 500 GW ambition. But beyond that, we might have to ramp up our installations.
The ministry has been working on an incentive scheme for domestic manufacturing of ingots, wafers and polysilicon. What would be the modalities of the scheme?
In the PLI, while sufficient module and cell capacity has come up, sufficient ingot, wafer and polysilicon capacity didn't come up. So, we are doing an assessment of what is the kind of capex subsidy which will incentivize firms to come up with polysilicon, ingot and wafer manufacturing.
Accordingly, we are designing a scheme, which will be more in the nature of a capex support and not a sales-linked support. PLI is generally sales-linked. But here, if somebody is actually putting in an investment, then we support them immediately upfront.
The ministry has been working on the schemes for floating solar, agri-photovoltaic projects and bioenergy installations. What incentives will be offered to these sectors?
Until we get final approval, I will not be able to tell you about the incentive because that's still not finalized by the ministry of finance. But what we are trying to suggest is that we should discover a tariff rate (for floating solar) which is sellable to the discoms. So, we are adding a battery storage component into floating solar and ensuring that it is available at a tariff which is attractive for the discoms to purchase. So, to that extent, giving a VGF (viability gap funding) for floating solar is being planned.
Further, these are early days for agri-photovoltaics. Installing solar panels on rooftops is a fairly simple process, but in agri-photovoltaics, there are a lot more things. Here, you can't really expect the same scale of the solar rooftop scheme. It will be of a much lower scale, but still, it would be one of the largest in the world as and when it rolls out. Compared to any other country, probably this will be the largest intervention for agri-photovoltaics.
It will also be a VGF because the capital cost increases fairly because of the stilted structure, because these are at a certain height. So, there will be a capital subsidy kind of a thing which will provide that incentive to the farmers to go for agri-photovoltaics.
The bioenergy (scheme) will go to the DoE (department of expenditure) for approval.
What is the status of unsigned power purchase agreements?
Our efforts are still on with the state governments, and we are persuading them to go for power sale agreements (PSAs). On this, both the ministry of power and the MNRE are trying to work. The Bureau of Energy Efficiency has issued notices to many states which have actually defaulted on their renewable consumption obligations. And we are also following up with those states to ensure that they are able to fulfill consumption obligations by going for these PSAs.
There has been some interest by some states. Our renewable energy implementing agencies like SECI, NHPC and SJVN are negotiating with them, and in a few cases, they are likely to sign off on those power purchase agreements.
They have also done a few exercises, where in certain cases, the discovered rates were very high and were unlikely to be sold. So, in those kinds of cases, we have asked them to discuss with the developers. And wherever it is required, they might cancel that. But that will take some time because that will involve a bit of consultation between the developers and the implementing agencies.
How does the government plan to resolve the persistent issue of curtailment generation, when output from renewable sources is deliberately reduced to prevent oversupply?
There is a constant discussion between the MNRE and the ministry of power where all the stakeholders, including Power Grid Corp of India, are present. They have committed that one or two major lines that are pending will be commissioned by March 2026. So that would reduce curtailment to a very low extent after that. So, they are working on those three-four lines, which will ensure that substantial power from Kutch in Gujarat and the Jaisalmer-Barmer belt of Rajasthan are up and ready by the end of March 2026.
In the next one year, curtailment will not happen because of transmission infrastructure. Curtailment might happen because of surplus generation. So, we have already advised the developers to add battery capacity in case they have put up a surplus facility.
For example, if a developer has signed a PPA for 100 MW then, generally that developer puts in slightly additional capacity to ensure that they don't default, but that additional capacity at times can cause problems, especially during the peak solar hours in the summer months. So, if they are able to put in a battery energy storage system, then their problem gets solved. And there is no requirement of a curtailment. So that advice has been given to the generators.