I have been in the field of sustainability long enough to know that the only thing that comes close to a reliable recommendation for all times is – have a healthy dose of scepticism about any policy announcements.
I have been there before in solar and have seen how some things indeed were achieved, but many critical things got lost along the way (as one of friends is wont to saying, operation success but patient died).
I’m seeing a similar half-baked policy making for EVs, accentuated by the ambitious proposal by NITI Aayog that all 2 wheelers below 150 cc be converted to electric vehicles by 2025.
To be fair to the folks manning NITI Aayog, there’s certainly some logic in this. Electric 2 wheelers, while costing more than their conventional cousins, can still just about be made affordable owing to falling battery costs and with a bit of government subsidies (it will be more difficult to do that for cars by 2025). The other challenges of limited range and long battery charging times are less critical for 2 wheelers.
So, in the context of transitioning to electric mobility, two wheelers are the lowest hanging fruits, no doubt about that. But this is where the government’s tryst with logic ends. And brainfade begins when they say all these have to happen by 2025.
I said earlier that I have been in solar power for years, didn’t I? Now, this is what happened in solar: The NDA government came in, and in 2014 upped the National Solar Mission target 5 fold – from the original 20,000 MW by 2022 to 100,000 MW by 2022.
Modi thinks big, we were told. Everyone clapped. But waking up the next day, after the hangover, folks started asking themselves how to get there – how the hell do you build so much solar power capacity in such as short time?
The answer appeared to be simple – get the price of solar power as cheap as possible as quickly as possible. Then everyone will build solar power plants. Applause again.
The plan went into work. The government did everything to get the cost of solar power as low as possible – and it actually succeeded. In 2018, the cost of solar power from large solar power plants is just 25% of what it was in 2012. And by end of 2018, India had over 25.000 MW of solar power capacity – it had already exceeded the original target of 20,000 MW by 2022, and seemed to be on the way to reach the target of 100 GW by 2022.
But, hold on, wait a minute.
Something is just not right about India’s solar power sector.
In 2018, the annual installations was lower than that for 2017, and much lower than the targets (3 GW 2015-16, 5,5 GW in 2016-17, 9.4 GW in 2017-2018 and 6.5 GW in 2018-19).
Half the large tenders issued last 15 months were getting cancelled. Some of the government’s plans to link manufacturing with solar power generation found ZERO takers (it had to be re-tendered two times, and I don’t think anyone is still interested).
India’s solar panel makers are in trouble. India’s solar cell makers are in even deeper trouble – some of the most prominent are not even operating any more. Many solar EPCs are just about scraping by.
So, what exactly happened in the past 6 years, while the government was singing self-praises about its solar success?
It is time for the audience to stop clapping, sit down and listen to someone else for a few minutes – let’s call that someone the Sober Indian Industrialist.
What happened, says the Sober Indian Industrialist, was that the government ran too fast without giving enough time for the entire ecosystem – right from the upstream manufacturing to the downstream power purchasing utilities – to stabilize.
The result: 90% of solar cells and modules used in India are Chinese (you want cheap power, I get cheap solar panels says the Sober fellow), many solar power plants have been poorly constructed and are already under-performing (they are supposed to do well for 25 years – an excellent study of the poor quality of Indian solar power here, done by Berlin PI), many state utilities are not paying tariffs on time (heck, they are not even able to pay their salaries on time).
A poorly developed manufacturing eco-system, poorly performing power plants, poor paymasters.
So, what am I really saying – that we should not be ambitious and should be less aggressive?
No. But, if we are ambitious, we should also be courageous, and take tough decisions. Like ensuring we also subsidize our solar manufacturing sector to get on par with the over-subsidized Chinese solar sector. Like ensuring that corners are not cut in the name of low cost power plants. And ensuring that the state utilities are provided incentives to ensure they do not screw up on payments.
Sure people, these things cost a lot of money. They are unlikely to get you votes. And the Chinese premier is not gonna be happy when he meets his Indian buddy.
But taking tough decisions all along the way is what is called being bold.
Coming back to EVs, the NITI Aayog announcement reminds me of the Indian solar power sector’s journey between 2012 and 2018. It once again smacks of policy arrogance without having the guts to assist the industry along the entire value chain. And not lending an ear to the Indian auto CEOs – who are likely to know a wee bit more about building a sustainable manufacturing ecosystem than NITI Aayog.
Sure, it was JF Kennedy’s bold policy statement in May 1961 (soon after Yuri Gagarin’s space jaunt) that put an American on the moon before end of that decade (Jul 1969).
But then, Kennedy did not have to worry about Chinese companies selling rocket boosters at half the price.
(Update: Aug 1, 2019: The government/NITI Aayog, says this report, is softening its stand).
Read too some analyses from mainstream media on this:
Why India should postpone its electric vehicle plans for 10 years – Economic Times
Categories: Electric Vehicles, Solar Photovoltaic
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