India must end dependence on imports of all equipment: PM Modi

Prime Minister Narendra Modi on Friday said India needs to end its dependence on imports of all equipment, including solar panels.

Inaugurating the 750 megawatt (MW) solar project at Rewa in Madhya Pradesh, Modi said India won’t be able to fully use its solar power potential if the country doesn’t develop better solar panels, batteries and storage manufacturing capacity.

So far, the demand for solar components is largely met through imports from China that are cheaper than those produced in India or imported from other countries. India imported $2.16 billion worth of solar photovoltaic cells, panels, and modules in 2018-19.

India is accelerating plans to cut its reliance on China for power equipment amid simmering border tensions that had escalated to a deadly clash last month, claiming the lives of 20 Indian soldiers. Modi also expects the move to create more jobs as India recovers from the covid-related lockdown.

Modi said several steps are being taken to increase domestic manufacturing, and it has been decided that government’s departments and institutions will only buy locally manufactured solar cells and modules.

As part of the plan to cut imports from China, the government is planning to enforce a list of approved manufacturers for government-supported schemes in the clean energy sector, including projects from where electricity distribution companies procure electricity for supply to their consumers, and wants states to follow suit.

The surge in imports led the Modi administration in its previous term to impose a safeguard duty from 30 July 2018 on solar cells and modules imported from China and Malaysia that ended in July. Post that, a basic customs duty (BCD) on all imported solar cells, modules and inverters was imposed to discourage cheap imports from China flooding the market.

India plans to impose more tariff and non-tariff barriers to check imports from China as part of its economic strategy amid tensions along the India-China border.

Modi said that for an Atma Nirbhar Bharat, self-reliance on electricity is very important.

India is evolving a strategy of not using Chinese equipment and technology in the power sector, and subsidizing finance for promoting local power equipment usage and ent usage and prior-permission requirements for imports from countries with which it has a conflict. The plan also involves procuring equipment and material locally and increase domestic capacity.

India is among the top five countries in terms of solar power generation, Modi said and added that solar power is “sure, pure and secure”.

India has become one of the top renewable energy producers globally, with an ambitious capacity expansion plan to achieve 175GW by 2022 and 500GW by 2030, as part of its climate commitments.

Modi also spoke about India being the most attractive market for clean energy and being viewed as a model for transition towards clean energy.

India’s solar power tariffs hit a record low of ₹2.36 per unit during a bid conducted by state run Solar Energy Corp. of India Ltd (SECI) last week. The auctions were dominated by foreign firms with the lowest bid placed by Spain’s Solarpack Corporación Tecnológica SA, followed by Italy’s Enel Group, Canada’s AMP Solar Group, France’s Eden Renewables and Ib Vogt Singapore Pte Ltd placing the second lowest tariff bid of ₹2.37 per kilowatt-hour (kWh). UK’s CDC Group-backed Ayana Renewable Power and Goldman Sachs-backed ReNew Power placed the third lowest bid of ₹2.38 per unit each. The previously recorded lowest solar bid was of ₹2.44 per unit in May 2017.

“Today, Rewa has actually written history,” Modi said.

Spread over 1,590 acres, the Rewa solar park settled the debate on competitive tariffs from green energy sources in India by landing a then record low-winning bid of ₹2.97 per unit in the country through intelligent risk distribution. By breaking the electricity grid parity barrier in February 2017, the project established that solar energy is no longer a green fad but a game changer in India’s energy mix.

Modi also spoke about India’ global electricity grid plan— ‘One Sun One World One Grid’—- that seeks to transfer solar power generated in one region to feed electricity demands of others and India’s aim of becoming an electricity exporter.