The Indian government looks hell-bent at promoting the use of solar energy and indigenous manufacturing at the same time, as it is ready with tenders for the addition of 20 GW solar power. The successful bidder has been mandated to have a production facility in order to manufacture almost half of the equipment required in the process.
In what is clearly one of the most ambitious programs undertaken by the Indian government, the generation capacity of 20 GW has been proposed to be added over the next three years. The project aims to ramp up the production of renewable energy to about 225 GW over the next four years.
Sources told TOI that the first tender is ready to be issued and addresses concerns related to domestic manufacturing that resulted in India being pulled up at the WTO after the US lodged a complaint at the multilateral agency. As a result, the tweaked plan does not insist on using locally-manufactured panels and modules for the government programme. Instead, companies with manufacturing facility can use the production base for exports to other countries. The idea is to ensure that the entire production chain is set up in the country as part of the thrust to the Make in India initiative, said a source.
When contacted, new and renewable energy secretary Anand Kumar confirmed plans for addition of 20 GW capacity and said that the government had an ambitious plan that went beyond solar energy to include offshore wind energy. While 32 GW capacity addition is in the pipeline, the ministry of new and renewable energy wants to initiate work on installation of another 40 GW this year.
The local production clause along with the duties on imports, including the recently-imposed safeguard duty to protect local industry, are aimed at creating domestic manufacturing capability in an industry where China is increasingly gaining muscle. The strategy also emanates from the experience in the mobile handset space where India is at best an assembly base for low-end phones with the production chain missing. Large orders are expected to provide the much-needed confidence to global players to invest in a manufacturing base in India.
