May 12, 2017 Read More →

A Groundswell Toward Solar

IANS (India Asia News Service):

India’s solar tariffs have fallen 40 per cent in just 16 months, an unprecedented rate way beyond any market forecasts, and its energy transformation will have a ripple effect, as is already seen in the UAE, South Africa, Australia and other countries.

The Indian government’s striking policy shift towards renewable energy sources — away from more expensive and polluting fossil fuels — is a strong global endorsement of the country’s leadership, Tim Buckley, Director at the Cleveland-based Institute for Energy Economics and Financial Analysis (IEEFA), told IANS in an email interview.

Indian solar power tariff hit a new low of Rs 2.62 per unit this week — 12 percent below the previous record just three months ago. Moreover, shifting rapidly towards low-carbon economy is a step towards the 2015 Paris Climate Agreement that aims to cut greenhouse gases from burning fossil fuels.

“It was just 16 months ago that the financial markets were questioning the sustainability of Fortum of Finland’s then record low solar tariff of Rs 4.34 per kilowatt-hour (kWh), itself a 25 percent decline on the previous low set in 2015,” Buckley said.

Tapping renewable energy sources is a great opportunity, said Buckley.

“It’s a source of new, diversified domestic electricity generation and so it improves energy security. The move away from thermal fuel imports improves the balance of payments, helps improve the currency and hence reduces imported inflation generally,” said Buckely, who is with IEEFA’s Energy Finance Studies.

India has also highlighted how deflationary renewables are. “Not only does the tariff drop 10-20 per cent annually, but India’s renewables power purchase agreement are generally zero indexation prices, so they decline in real terms every year over the 25 year life of the contract.”

According to him, renewables in India are seeing a massive scaling up of in-bound investment.

“The global endorsement of major financial institutions like Brookfield, Macquarie Group, Goldman Sachs, Morgan Stanley and SoftBank and major global utilities like ENGIE, Enel, EDF, Fortum et al is clear and very positive. This is funding strong growth in jobs and investment,” Buckley said.

Ripple effect of India’s energy shift visible globally: Expert

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