Seeking to China, India to supply land close to main ports for solar energy manufacturing – Livemint
NEW DELHI ::
India plans to offer land near ports for building solar panels to challenge Chinese companies' dominance in one of the world's largest green energy markets, said two people who are aware of the development.
This sweetener follows after imposing tariff and non-tariff barriers to review all imported solar cells, modules, and inverters that make it expensive to source from China. This has created traction for domestic solar cell and module manufacturing, with the strategy of spurring India's attempts to become an integral part of global supply chains as companies seek to relocate production lines from China following the coronavirus pandemic.
With 1.10 hectares of land in 12 major ports, New Delhi expects one port location will make solar panels inexpensive to manufacture and also facilitate export. This is also in line with India's port-driven development strategy to use the country's 7,600 km of coastline.
“The ministries for new and renewable energies (MNRE) as well as shipping and ports are in talks to offer this country for the production of solar systems. The ports were asked for the identified country, "said a senior government official named above, asking for anonymity.
While India is running the world's largest solar energy program, the market for solar components is dominated by Chinese companies. Chinese companies supply around 80% of the solar cells and modules used here because of their competitive prices. India imported solar photovoltaic cells, modules and modules worth $ 2.16 billion in 2018-19.
"We are investigating this with the port authorities and state governments," said the government official quoted above.
India is struggling with high logistics costs of around 13% of the total costs, which makes its exports uncompetitive to China, which has lower logistics costs. This tends to increase the overall cost of the supply chain.
Firms looking to build solar manufacturing in India include Goldman Sachs and the Canada Pension Plan Investment Board, who support ReNew Power and are planning to set up a 2 gigawatt (GW) cell and module manufacturing facility.
India has a domestic solar cell production capacity of only 3 GW. Recently, Adani Green Energy Ltd, with a production capacity of 1.5 GW solar cells and modules, signed a manufacturing solar contract that includes the establishment of 2 GW additional production capacity for solar cells and modules. Reliance Industries Ltd also has clean energy space plans.
Inquiries to spokesmen for ministries for new and renewable energies and shipping on Tuesday evening went unanswered.
Green electricity projects now account for more than a fifth of the electricity generation capacity installed in India. India has 34.6 GW of solar power with the goal of reaching 100 GW of solar capacity by 2022.
It is expected that other manufacturers will settle here. Given the new Indian playbook of not using Chinese devices and technologies in the energy sector, subsidized funding and pre-approval requirements have been put in place for imports from conflicting countries. The union government also plans to enforce a list of approved manufacturers for government-sponsored clean energy programs, including projects where electricity distribution companies procure electricity to power their consumers.
Prime Minister Narendra Modi said the country's goal under the Atma Nirbhar Bharat, or stand-alone India campaign, is to end import dependency on all equipment including solar panels. He has also stated that India can only achieve its full solar energy potential if the country does not develop better production capacities for solar modules, batteries and storage.
In order to set up the much-needed capacity for solar wafers and bars in the country, India is also planning tenders to finance the profitability gap (VGF) to attract domestic manufacturers, Mint previously reported. Wafers and bars are the building blocks of solar cells and modules and are essential to India's clean energy plans. Worldwide, the manufacture of solar wafers and bars is also dominated by China.
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