As the Director-General of the Abu Dhabi-headquartered International Renewable Energy Agency (IRENA) since its inception in 2011, Adnan Z Amin, is an authority on renewable energy economics. BusinessLine grabbed the Kenyan economist for a chat on the sidelines of the 8th Clean Energy Ministerial, Beijing, that took place on June 8. A keen observer of India’s tryst with renewable energy, Amin makes certain oblique references to the re-opening of power purchase agreements in India after they are signed, and the issue of ‘curtailment’ of green power.Excerpts:
The world seems to be cruising along well in renewable energy. Are there any pitfalls, pain points you see in the path ahead?
I think it is in our hands to provide sustainable infrastructure for renewable energy in a relatively short period of time, but it is not going to be the same everywhere. It is not going to be one market, or one solution for every economy. First of all, resource endowment — where do you have solar, where do you have wind, thermal, hydro, biomass, marine, what technologies are emerging — all these things are determinants of each economy. The costs have come to a point where it is viable to embark upon a fairly ambitious renewable energy future…
But aren’t there question marks on the viability of some renewable energy projects?
Well, the cost equation has changed so much. Why is India so gung-ho on solar? Because solar PV costs have come down by about 80 per cent in the last six years. We just released, earlier this year, a very in-depth analysis of the costs of renewable energy technology going down and we see over the next decade that solar PV will come down by another 60 per cent, minimum.
We are also seeing innovations and if there are a few breakthroughs, prices will come down even further. This means that solar, where there is a good resource, is cost competitive on the grid with any other technology. The issue really is that it is not only technology — it flourishes in a context, and that context is provided by understanding the markets, the policy framework, which incentivises investments in the market.
If you look at where renewables have succeeded, you see very ambitious efforts by governments to creating an enabling framework for investments and an enabling framework for the development of infrastructure that can adapt to the needs of renewables. Renewables are very different from centralised generation — they are flexible, they are modular. Germany, for instance, has today a very sophisticated electricity market because there are 1.7 million electricity producers putting electricity to the grid — households, utilities, all kinds of people.