Policies and People | As COP 27 begins, the Asian solar sector shines bright
India, China, Japan, South Korea and Vietnam are among the top 10 countries with the highest solar capacity in 2021. A decade ago, only two Asian countries made it to the list.
In Fossil Free, chairman and managing director of ReNew Power Sumant Sinha points out that the world has seen three energy transitions. The first two coincided with the industrial revolutions, which used abundant coal-fired power and the internal combustion engine (ICE), leading to a rapid increase in wealth and prosperity. But it also left deep footprints on the world: The climate crisis and environmental pollution. However, Sinha writes, the world can achieve a third energy transition, characterised by green, renewable energy.
But to succeed, this transition must be led by Asia, which houses two-thirds of the global population, is responsible for half of the global GDP, and has growing energy needs. More particularly, India and China must lead this transition.
The good news is that this is happening.
According to a new report released by the energy think tank Ember, the Centre for Research on Energy and Clean Air, and the Institute for Energy Economics and Financial Analysis on Thursday, solar power is already contributing to meeting electricity demand in Asia and enhancing energy security. It found that five of the top 10 economies with solar capacity are now within Asia, including China, Japan, India, South Korea, and Vietnam.
After analysing the growth of solar power over the last decade, the researchers found seven Asian countries, including China, India, Japan, South Korea, Vietnam, the Philippines, and Thailand, avoided potential fossil fuel costs of approximately $34 billion from January to June 2022, which is equivalent to 9% of total fossil fuel costs during this period.
“Asian countries have shown that rapid solar deployment is possible, setting a remarkable example and providing valuable lessons learned for their peers in the region. As the prices of solar and storage plummet, and the potential cost savings have started to materialise, solar dominance in Asia now looks to come much sooner than previously expected,” said Ember’s Asia electricity analyst, Achmed Shahram Edianto.
Meeting the current targets for solar capacity in 2030 could enable the seven countries to avoid at least $44 billion in fuel costs — $10 billion more than the first half of this year. But realising these goals, the researchers said, will require grid stabilisation, innovative policy reforms to unlock investments and collaboration with the private sector.
The India story
In 2010, India ranked 21st in the world for solar capacity; India is now ranked 5th. However, the country has established a good track record on solar capacity additions and is well positioned to sprint towards its target of 280 GW by 2030, a six-fold increase on current levels. If achieved, this would make India home to one of the world’s largest solar fleets by the end of the decade.
In India, solar generation avoided $4.2 billion in fuel costs in the year's first half. It also avoided the need for 19.4 million tonnes of coal that would have further stressed an already strained domestic supply.
Solar power is now the cheapest power source in the country. India’s large solar players, such as Adani, the National Thermal Power Corporation (NTPC) and ReNew, have found ample space to invest in solar projects across Rajasthan, Karnataka and Andhra Pradesh. Overall, India’s solar capacity should come within 2 GW of its 60 GW utility-scale solar target by the end of 2022.
Remove the roadblocks
However, India looks set to miss its distributed and rooftop solar target for 2022, by up to 25 GW, or 63%.
The country’s efforts to encourage large-scale solar projects have included feed-in-tariff programmes, improved land availability, streamlined grid access and access to standardised 25-year power purchase agreements (PPAs).
By contrast, the report indicates that India’s rooftop and distributed solar investment have been inhibited by national and subnational policy conflicts, inconsistent net metering options and a lack of financing.
In recent years, India’s solar power push has improved its energy security and positioned its power sector well to embark on a solar revolution.
Moreover, India seems to be very bullish on solar power growth in the next 10 years too, as evident from the new draft National Electricity Plan. So, it’s looking very likely that the 2020s is when solar power is going to finally ramp up in India and begin India’s coal phasedown journey, says Aditya Lolla, Senior Electricity Policy Analyst, EMBER.
Accelerating energy transition
The report shows that better financing can accelerate the energy transition. And at COP27, this is a crucial issue.
In the run-up to COP27, International Solar Alliance (ISA) co-President and Union minister for power and new & renewable energy RK Singh said that the Alliance would raise the issue of climate finance for energy transition and energy access in developing countries.
He added that the money is needed for more than just capital investment. “Capital investment will come but what will be necessary is to put in place funds for insurance and payment security. So, ISA will be floating two funds, one for payment security which is a must for generating private investments in our projects. The second is a fund for project insurance”.
Climate action is often perceived as a cost or a trade-off with other priorities. However, it must be seen as an opportunity for businesses, countries and individuals to build a more sustainable and habitable world. The developed world must realise this and participate wholeheartedly in this renewable energy journey to ensure equitable and clean growth of all regions.
The views expressed are personal