Indian renewables leaders split over need for regulation

As India is set to become the world’s largest carbon emitter within the next seven years, energy leaders at the 13th Renewable Energy India (REI) conference this week were insistent on the need for sustainable growth. Industry heads also called for a robust renewables ecosystem, with recycling as an essential cog in the wheel, as well as better technology, enabling policies and regulation.

Moderating an energy leaders session at New Delhi’s India Expo Mart, Somesh Kumar – partner and head of power and utilities at Ernst & Young – began with a look at India’s renewable energy (RE) trajectory.

‘The market has to take over’

Recent growth in India has been achieved thanks to a supportive environment for green power, said Kumar, who contrasted those successes with a country now marred by protectionist tariffs, failed attempts to establish domestic solar manufacturing, uncertainty over electricity transmission charges, and a lack of coordination between federal and state governments.

Santosh Khatesal, managing director of EPC service provider Enerparc Energy, said the renewables sector had outgrown policy support. “Policies create [a supportive] ecosystem and ramp up everything,” he said. “But external injection of policy becomes redundant when a sector attains maturity. Policy is an enabler but ultimately the market has to take over. India’s RE sector is ripe for private consumption.”

Anuvrat Joshi, head of business development for PV developer Cleantech Solar agreed. “Regulations and regulators are not what makes a market big,” said Joshi. “The financial health of discoms [power distribution companies] is grave and open access [for corporate customers] is gaining traction. Currently, nearly 20% of power is open access and [systems] need to [be] better operationalized.”

Look to China

Daniel Liu, South Asia managing director for JinkoSolar, complained about the lack of a comprehensive renewables policy in India. Pointing to China, Liu said the world’s solar superpower has stepped beyond incentives and subsidies for specific projects to support infrastructure that creates an environment for growth.

“In China, highways are higher, electricity cheaper and water supply more stable,” Liu said. “In India, safeguard duty was a huge dampener. Add to it the reality that manufacturing-linked tenders find no takers and are being cancelled. Because of [the] lack of [a] value chain and ecosystem, profit in manufacturing is too small to lure an investor.”

Arvind Reddy, CEO of Innolia Energy, offered a defense of Indian policymakers. The California-based manufacturer has invested $30 million in a battery manufacturing unit in India.

“Ease of Doing Business has been a great enabler and subsidies to EV [electric vehicle] manufacturers has really given the market a boost,” said Reddy. “Presently there is a huge demand for batteries but one needs to look at the longevity of demand. Predictability of demand will come from a longer roadmap.”

While energy leaders discussed policy, regulation and how private enterprise can drive the market, the attendees were more interested in hearing what will happen to end-of-life renewable energy systems. With no renewables recycling or disposal policies in place in India, the audience wanted to know if clean energy will become the new plastic – the next environmental disaster.

“In the beginning, selling silicon waste was very lucrative,” said Cleantech’s Joshi. “Roughly $400 a kilogram, which has now gone down to $20. But conscientious developers are taking steps towards the issue which, if not handled well, will turn into an environmental nightmare.”

Reddy pointed to the possibility of reusing batteries in the secondary and tertiary markets.