Page 9 - AsiaElec Week 16

AsiaElec RENEWABLES AsiaElec
India aims for post-COVID-19 green boost
INDIA
INDIA aims to boost its solar and wind man- ufacturing capacity in a bid to become a major global green energy hub and to win market share from China.
Its key strategy is to persuade international manufacturers to invest in India, rather than elsewhere, as the government looks ahead to how to stimulate economic recovery after the current coronavirus (COVID-19) lockdown.
Indian New and Renewable Energy (MNRE) Secretary Anand Kumar has been talking to potential investors, while the energy ministry said its trade commissioners were looking to drum up inward investment from the US and other countries.
“In a time when many companies are plan- ning to shift their manufacturing base from China, it is [an] opportune time for India to bring policy changes for facilitating and catalys- ing manufacturing,” the statement said.
India currently imports 85% of its solar cells and modules from China. The ministry said in its statement that it was targeting investment in the manufacturing of “silicon ingots & wafers, solar cells & modules, wind equipment and ancillary items like back sheet, glass, steel frames, inverters, batteries, etc.”
This dependency on imports means that up to 3GW of Indian solar projects could be at risk
in 2020, as they are unable to access Chinese solar components.
The Asian Development Bank (ADB) recently said that India had the capacity to develop up to 15GW per year of solar manufac- turing capacity.
The MNRE has also asked state and port authorities to set aside land for new factories of renewable equipment, from solar cells and mod- ules to silicon ingots and wafers, steel frames, inverters and batteries.
The states of Madhya Pradesh and Odisha and port authorities in the southern city of Tho- othukudi have already expressed their “keen interest” in promoting new manufacturing plants.
Meanwhile, the MNRE has confirmed that all renewable energy projects could declare force majeure for the duration of the lockdown.
On March 20, the ministry said projects delayed by supply chain disruption caused by the spread of COVID-19 in China or any other country would be able to declare force majeure, and not be liable for any contractual penalties.
Furthermore, the MNRD said that post lock- down, all projects would have their completion times extended by the equivalent of the period of the COVID-19 lockdown plus an additional 30 days.™
150GW of green capacity at risk in Asia
ASIA
UP to 150GW of future wind and solar capacity in the Asia-Pacific region could be at risk over the next five years because of the current coro- navirus (COVID-19) crisis.
The rest of 2020 will be crucial in determining if the renewable industry can recover from the current economic slump, Wood Mackenzie said in a note.
“The extent of the coronavirus impact on Asia-Pacific markets is key to the future growth of the renewables sector. Over the last five years (2015–2019), the Asia-Pacific region accounted for over three-quarters of global power demand growth, while leading the world in wind and solar capacity installations,” said Wood Macken- zie research director Alex Whitworth.
An extended crisis would mean tougher access to funding for developers, higher cost of capital and renewed competition from lower fos- sil fuel prices.
In terms of power demand, a two or three- month disruption to power demand, followed by a strong recovery, would result in 380 TWh of demand being lost.
However, if the crisis continues and demand remains low, causing a major recession, then 1,000 TWh of demand could be lost by 2023. This is equivalent to about two years of growth in the region, Whitworth said.
“The impact on wind and solar installations in 2020 can be offset by stronger growth and sup- port policies in 2021. But if the situation worsens, renewables projects in Developing Asia could be heavily impacted by increased financing costs, as well as forex risk due to high capex share of costs. A 10% increase in weighted average cost of capital could lead to an 8% increase in levelised cost of electricity (LCOE) in renewables,” he said.
Looking ahead, Whitworth was pessimistic that renewables would remain a central focus of government attempting to deal with economic recession, especially in Asia’s less developed economies.
“In an extended recession scenario, we expect governments to become overwhelmed with more pressing economic priorities, making it difficult to support the renewables sector with stimulus measures,” he warned.™
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