n March 11, the sun will shine a little brighter when Prime Minister Narendra Modi and French President Emmanuel Macron, along with two dozen heads of states and governments, attend the inaugural conference of the International Solar Alliance (ISA). Modi has played a prime role in not only conceptualising but also rapidly bringing to fruition the ISA, an alliance of 121 countries among solar resource-rich countries lying fully or partially between the tropics of Cancer and Capricorn.
That solar energy holds the key to solving not only the world’s energy crisis but also the threat of global warming has long been known. The key constraints were the costs (electricity for each unit from coal till recently was cheaper than solar), technology (how does one ensure 24 X 7 supply of solar energy after sundown?), finance (who is willing to fund both the development and execution of commercial solar power plants?) and of course capacity (what’s the kind of demand for solar energy and the ability to scale up to meet large community needs as coal or gas based power plants do?).
It was at the 2015 Paris climate change summit that Modi came up with the bright idea of bringing together an alliance of solar resource-rich countries in a bid to solve all the four constraints that had restricted solar energy to being a fringe player in the giant energy supply market. By bringing together 121 countries — in a Solar Common Market of sorts — it would provide the economy of scale that would attract industry. And by pledging to mobilise investments of $1,000 billion by 2030 through joint efforts, including innovative policies and projects, the ISA would reduce the cost of finance and make solar energy as competitive as other forms of energy.
France was a willing co-sponsor, and Modi and the then French president Francois Hollande jointly launched the ISA at the Paris summit. At the summit, the Indian prime minister pointed out, “With solar technology evolving, costs coming down and grid connectivity improving, the dream of universal access to clean energy is becoming more real. This will be the foundation of the new economy of the new century.” India then put money where its mouth was. At the Paris summit, Modi pledged that India would draw 40 per cent of its electricity from renewables by 2030. Electricity from solar was to meet 60 per cent of that target. India also committed to expand its solar energy capacity by a factor of 10: from 10,000 MW to 100,000 MW by the year 2022.
The Indian government is also spending $30 million in building the headquarters of the ISA in Gurugram, Haryana. And last month, with 26 member countries ratifying the framework agreement of the ISA, it became the first treaty-based UN organisation to have its headquarters in India. Meanwhile, interest in ISA has zoomed and another 52 countries have signed the framework agreement. Even countries like Germany and Italy, which do not lie between the tropics where sunshine is available for around 300 days, are keen to become members. At the inaugural conference, members plan to discuss the main aim of the ISA, which is making “solar energy safe, convenient, affordable, equitable and sustainable”-each of these conditions has to be carefully planned and executed.
The crux of the alliance will be its ability to generate $1 trillion by 2030 to support solar energy research, projects and programmes. The World Bank has signed an agreement with ISA to mobilise these funds. But it is easier penned than achieved. The ISA has also approached large banks apart from pension and insurance funds across the world to try and persuade them to outline a credit map for industry for the next five years. It is also trying to create a $300 billion risk mitigation fund to create a sustainable finance architecture for solar projects. Another proposal is for governments of member countries to float green bonds. Meanwhile, funds have begun to pick up pace-close to $150 billion for the solar sector was raised in 2016 alone. Upendra Tripathy, ISA’s interim director general, says, “The ultimate idea, given the size of funding we are seeking, is to set up a World Solar Bank.”
Meanwhile, the Paris-based International Energy Agency (IEA) has indicated that global solar trends have turned positive. In 2016, for the first time, net capacity of solar added was larger than any other fuel, including coal. Photovoltaics (PV) are now expected to lead capacity expansion in the global power mix in all the IEA five-year forecasts. And the agency estimates that if climate change goals set by the Paris summit are to be met, solar PV capacity has to become the world’s largest installed capacity by 2040, accounting for 25 per cent of the total energy consumed. IEA executive director Dr Fatih Birol points out, “Since 2010, costs of new solar PV have fallen by 70 per cent, while wind costs have dropped by 25 per cent and battery costs by 40 per cent.” He believes these trends signal a coming of the new age of renewables.
However, what will determine ISA’s success, as Dr P.C. Maithani, an advisor in the ministry for new and renewable energy, points out, is “the ISA’s ability to reduce costs by aggregating the demand for products by member nations and creating economies of scale”. Solar-powered agricultural pumps are one such effort. Twenty-one countries have shown interest. The ISA hopes to pump up the demand to half a million such sets and then go for global tenders to manufacture them as was done to bring down the costs of LED bulbs.
Also, instead of expecting the farmer to install such pumps, the ISA is exploring inviting entrepreneurs in all these countries to run such pumps and provide services to the farmers, thus providing additional employment and making these projects bankable. Maithani is also confident that disruptive technology, including breakthroughs in storage capacity for solar and linking up to the grid supply, will be game-changers. Tripathy, too, is optimistic: “We are at a juncture where technology is moving very fast and economies of scale are bringing down costs-we should expedite the ongoing solar revolution by advancing all our targets.”
Meanwhile, the ISA is coming out with other innovative ideas to create a global movement for solar power. One of them, Tripathy says, is to set up an “Infopedia” of all the R&D in solar taking place in the 121 member countries. Information on quality standards and best practices, for example, would also be disseminated. Meanwhile, the ISA is setting up a Solar Applications Technology Resource Centre apart from creating 10 centres of excellence across the world. India will get one of them. These centres will be designed to create a network for all the 121 countries to participate and reap the benefits of shared research.
While lauding “the fantastic start” ISA has made so far, Erik Solheim, executive director, United Nations Environment Programme, cautions, “The key to make ISA even more successful is to focus on finance, because the technology needed is already there. And the way to do it is to basically bring in private sector finances and find guarantees to mitigate the risks.” So it is not just the sun, but also money that will be needed to make the solar world go around.