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Achieving 100 GW power by 2019 is a big challenge for Modi

By TN Ninan
Last updated on: November 03, 2014 17:08 IST

What the Modi government proposes is a five-fold multiplication of an already ambitious target, along with a crunching of the time schedule, notes TN Ninan.

Image: Prime Minister Narendra Modi has aggressive plans to enhance India's power generation capacity. Photograph: Reuters

Among the dozens of announcements made by the Modi government in the less than six months that it has had, the most ambitious - indeed, the most audacious - is the plan to install 100,000 Mw (or 100 Gw) of solar power generating capacity.

Audacious because of two things.

First, the country has only 2.6 Gw of solar capacity installed as of now, and the plan has been to take it up to 20 Gw by 2020 (revised later to 2022).

That was considered ambitious till now because of the nearly eight-fold jump. Second, the proposed 100 Gw target is for five years, that is, by 2019.

In other words, what the Modi government proposes is a five-fold multiplication of an already ambitious target, along with a crunching of the time schedule.

Such a scale change has never been attempted in India, in any field. We need to see the numbers in context. A hundred Gw of solar power capacity over five years is the equivalent of about 30 Gw of coal-thermal capacity, because of the lower capacity utilisation delivered by solar (there is no sun at night, or in most of the monsoon months, and the winter sun is weak).

Meanwhile, the total installed capacity for power generation is already 240 Gw; this is growing at 20 Gw annually, with only a marginal share for solar.

Even the new solar plan will not, therefore, bring about a significant change in the country's energy mix, till many years have passed.

Nevertheless, it is the boldest gambit yet for reducing the dependence on power based on imported fuels (coal and gas).

There will be technical challenges (to bring down the cost per unit of power), policy and production challenges (to produce the equipment at home rather than order them all from the Chinese and Americans, who are clamouring against protectionism); and, of course, financial challenges.

The investment required for the 20 Gw plan was put at $19 billion (Rs 1,15,000 crore).

A pro rata expansion of that number for 100 Gw means investing that much every year.

Finally, there is the challenge of land - a solar power programme on this scale means covering thousands of sq km with solar power equipment. Land on that scale may be available in only two or three states (principally Gujarat and Rajasthan), both of which also get plenty of sun and are at a distance from coal pitheads.

The opportunities are equally outsize. A massive solar programme could give birth to new businesses, with assured demand - the annual spend will be bigger than the defence acquisitions budget, over which so many companies are salivating.

If the cost of solar power drops to normal grid levels by 2017 (as is expected), and there is further improvement in the capacity utilisation factor (a 50 per cent improvement is feasible), the pay-offs would be substantial - especially in remote areas where it is expensive to reach grid power.

Finally, the country would have taken a leap in the direction of a low-carbon growth strategy - and a chance to earn brownie points in the climate change negotiations.

The change being planned by the Modi government is very Chinese in scale and scope. Naturally, the key question concerns Chinese-style execution.

Moving at great speed on multiple fronts is not something the government is known for, and this will be a test of whether Mr Modi can transform government functioning.

Involving the private sector will be crucial - for building the equipment as well as setting up the utilities and running them. But even India's best-run companies will find it a challenge to scale up so fast.

In setting such a bold target, Mr Modi is, therefore, challenging the entire system. One wonders what scale change will be attempted after this one. Wind power?

TN Ninan
Source: source