Government May Increase the Duration of Safeguard Duty on Solar Imports_ Panel Discussion

India, a nation comprising of 29 states and seven union territories of varying sizes and populations, cannot surge ahead on its path to a sustainable future unless all states, especially the smaller and less-developed ones, walk in tandem with the rest of the country. While new technology could help all states, it can be more impactful to smaller states and union territories, which have a number of natural limitations (such as land availability) that can only be alleviated with the help of innovations.

Such challenges and the path forward were central to the plenary discussion at the second year of Global REInvest being held in Greater Noida. The session was held in the presence of a few head of states and union territories, in which they discussed the challenges faced as well as measures undertaken to promote the use of renewable resources. Present at the discussion were the Chief Minister of Puducherry, Lieutenant Governor of Andaman and Nicobar, the Minister of Additional Energy from Uttar Pradesh, and the Chief Minister of Himachal Pradesh. The Minister of Power, R.K. Singh, also briefly joined the panel to deliberate with the ministers.

Speaking at the discussion, Puducherry CM V. Narayanasamy stressed the need to develop novel technologies to advance smaller states and union territories such as Puducherry, that must address natural limitations such as limited land availability.

“In a small union territory like Puducherry, where the availability of adequate land mass is a serious issue in the development of renewable energy, new technologies matter more than they do elsewhere”.

Highlighting the need for government’s support to foster the growth of renewables through supportive policies, Narayanasamy added, “There are plenty of innovators in this country, but they would need the support of the government to succeed. Today, innovation should be the government’s primary focus.”

In the discussion that focussed mainly on work done by various state governments to foster solar power, Narayanasamy also asserted the need for government’s subsidies in order to truly promote solar manufacturing in the country. It is established that India still needs to build an expansive base of solar manufacturing, given its high ambition for solar by the year 2022. Presently, the country relies heavily on solar imports from other countries such as  China to augment its solar capacity.

“Since such initiatives require huge investments, subsidies can help these private players establish big manufacturing units in the country,” the Puducherry chief minister added.

Commenting on the significant investments made by foreign players in the country, Narayanasamy also cautioned against the aggressive drive under Foreign Direct Investment (FDI) and NDA government’s flagship Make in India program which may unduly favour high-profile foreign players while undermining domestic manufacturers.

“There should be healthy competition in the sector, wherein the domestic players also get a level-playing field vis a vis their foreign counterparts. This can only happen when they are protected by the government,” commented the CM.

“Take the example of countries like China, Germany or Korea. Mass production is taking place in all these countries whereas in India, we often see individual investors. This needs to change. Industries cannot be set up on a large scale without any support from the government”.

Expressing disappointment over the erratic implementation of government policies, he also urged the government to not only introduce new policies but also implement them seamlessly. “Policies should not just be on paper,” stated Narayanasamy.

Taking a cue from Narayanasamy’s comments on the government support needed to expand the base of solar manufacturing in the country, the Minister of Power, R.K. Singh, talked about the ministry’s recent policy proposal that would exclusively deal with manufacturing in the country.

“We understand the importance of domestic solar manufacturing, since a large chunk of solar components is imported by India. An exclusive policy for solar manufacturing is currently under consideration by the government,” Singh informed the session.

Moreover, Singh talked about the recent solar tender linked with manufacturing component in order to provide an impetus to solar manufacturers in the country. As reported in May 2018SECI had tendered 5 GW of manufacturing capacity to be set up across the country. The manufacturing capacity was to be linked to ISTS-connected solar projects for an aggregate capacity of 10 GW. However, recently, SECI announced that it has reduced the capacity of the manufacturing tender from 5 GW to 3 GW. The minimum capacity developers can bid for manufacturing has also been reduced from 1 GW to 600 MW.

Elaborating further on the need to expand solar manufacturing, Singh also stated that the government is likely to eventually increase the duration of safeguard duty on solar imports.

“Once we have established sufficient manufacturing capacity in the country, we will try to increase the duration of safeguard duty so that there is no dumping of solar components by some countries,” said Singh.

After a lot of  back and forth, the central government recently announced it would levy a 25 percent safeguard duty on solar cell imports from China and Malaysia for the first year, followed by a phased down safeguard duty of 15 percent for the second year.

Devendra Kumar Joshi, the Lieutenant Governor of Andaman and Nicobar Islands, which is another small union territory in the southernmost tip of India, also discussed the limitations faced by the archipelago in expanding its solar base.

Joshi further said, “In a place like Andaman and Nicobar which has an extensive monsoon season, grid fluctuation is a big challenge. While for some time the day might be sunny, it may suddenly turn cloudy, thus making the grid fluctuate. Keeping these things into consideration, smart grid management is the need of the hour along with a mix of renewables and conventional power in the energy mix, and not just concentration on one.”

Joshi also stressed on the need for the government to increase the RPO (renewable purchase obligation) requirement of DISCOMs, which would ensure that every consumer enjoys a wider share of renewable energy.

The speakers also explicitly asserted that the problem of connectivity to the grid should be addressed by the government so that the states can provide solar power at cheaper rates to bulk consumers. The requirement to ramp up the country’s transmission infrastructure in a big way is a grey area since the state government cannot take up such huge infrastructure additions on its own.

Addressing the audience, Brajesh Pathak, the minister of additional energy resources of Uttar Pradesh, said, “If we adopt solar and other forms of clean energy which are cheaper compared to the conventional forms of energy, India will be able to collectively save billions, which in turn will be a boon for the economy”.

The attractiveness of solar power cannot be stressed on enough. Not just the heads of states, but also PM Modi has been aggressively campaigning for the wider adoption of solar power across the country. At the inaugural function of the second edition of Global RE-Invest on October 2, 2018, PM Modi likened solar to oil reserves saying, “What oil wells are today, solar power will be tomorrow”.

Ankita Rajeshwari Ankita is an editor at MercomIndia.com where she writes and edits clean energy news stories and features. With years of experience in the news business, Ankita has a nose for news and an eye for detail. Prior to Mercom, Ankita was associated with The Times of India as a copy editor for the organization’s digital news desk. She holds a Bachelor’s degree in Psychology from Delhi University and a Postgraduate Diploma in journalism. More articles from Ankita Rajeshwari.