The country has one of the world’s biggest solar sectors, but now faces the risk of a bubble. The bidding for the contract to build a huge solar farm in the north of India was remarkable for a number of reasons. Nearly two dozen developers took part, indicating the extent of the competition. The auction, in May, lasted a gruelling 30 hours. And the final result left some in the industry open-mouthed. The winning bid for the 500-megawatt Bhadla solar park in Rajasthan was one of the lowest prices for solar power ever seen anywhere in the world. The companies – Acme Solar, an Indian developer, and SBG Cleantech, a joint venture whose shareholders include SoftBank of Japan – said they would build the project for a guaranteed price of just Rs2.44 ($0.04) for every unit of electricity they eventually sold. It was not quite a world record: even lo wer prices have been achieved in the Middle East and South America. But the result confirmed India’s place at the centre of a global renewables revolution that is driving down the cost of green energy and which represents one of the biggest threats to fossil fuels. Until recently, India’s environmental record has attracted headlines of a different kind. While the government was once accused by some countries of undermining international climate change talks, New Delhi has become one of the world’s most polluted cities. But for many in the Indian energy industry, the Bhadla auction confirmed that the country is undergoing a generational shift from coal-fuelled power to solar and wind. Given that India is already the world’s third-biggest carbon emitter and plans to electrify even its most remote villages within two years, a rapid expansion in the country’s renewables sector would prove a huge boost for attempts to keep global temperature rises below 2C – the target set by the 2015 Paris climate accords.
FT 1st Nov 2017 read more »