Covid-19 has disrupted global solar chains and put many under-construction solar power projects on hold worldwide. With infections rising daily, the situation is far from over even though economies are slowly opening up. The International Solar Alliance (ISA) has been making efforts to solarise primary health centers in member countries as its response to the Covid-19 crisis. With 86 signatories as of today, ISA will soon open its membership to all UN countries. In an interview with REGlobal, Upendra Tripathy, director general, ISA, spoke about the key programs that ISA is working on, its role in the future, and the impact of Covid-19 on global solar power development. Excerpts…
What has been the impact of Covid on project development, new tenders and investments across the ISA member countries?
Since the onset of the Covid-19 outbreak, mixed reports have emerged about its impact on the global solar market. While solar manufacturing operations are now beginning to return to normal in China, questions remain about the impact on demand. Moreover, plans to commission new solar projects will be delayed this year. Deadlines have been relaxed for projects that are still in the construction phase, as developers in some countries have reported that PV development got impacted due to constraints in labour movement or labour shortages. Movements in the foreign-exchange market triggered by the Covid-19 outbreak will also affect all segments of the market.
In your perspective, how does the role of solar power become more important in the post Covid scenario?
Even though this pandemic will undoubtedly influence the market, and the 100 per cent clean energy goals of many countries in the immediate future, demand for solar is still up. Investors and banks still see solar power as AAA investment. Moreover, clean energy goals are still in place. Covid-19 does not change the inevitable that more companies, more countries, and more consumers support renewable energy as a primary source of new energy generation.
What is your opinion on the role of decentralised solar power especially for areas with low grid penetration?
Several hundred million people in the world are at risk of being without access to electricity by 2030 despite the ongoing work aimed at achieving the United Nations’ Sustainable Development Goal 7—sustainable energy for all. Decentralised solar energy systems provide direct benefits to local communities because they provide obvious economic and social benefits to their owners, for example they can sell the excess power back to the grid and therefore alleviate their electricity bills. Over the past few years, off-grid solar companies have been gaining momentum, providing safe, clean, and affordable energy solutions to tens of millions of people across the continent and preventing millions of tons of greenhouse gas emissions and indoor pollution caused by combustible fuels for lighting and cooking.
Some executives are concerned about the consequences of the Covid-19 crisis, warning that the sector is facing an unprecedented threat that could destroy companies and harm millions. I believe that every crisis brings with it countless opportunities. The current one is no different, and it presents great potential for the solar industry. If we focus on opportunities and the potential to innovate and influence, the entire sector will prosper and impact the lives of people even more than it did before. Therefore, there is an urgent need to intensify efforts to improve solar power delivery models and integrate them fully in energy sector strategies.
“We are now facilitating two Freedom solar parks – 500 MW in Mali and 218 MW in Togo (West Africa), with NTPC acting as consultant to member countries and arranging grid connectivity, low cost loans and securing 25-year PPAs on a transparent and competitive basis. Ten other countries have been identified to set up such parks.”
What is the current ISA membership and what are the targets for this year?
The ISA secretariat got legal personality on June 6, 2018, after ISA and India signed the host country agreement, the basis for establishment of headquarters of a treaty-based intergovernmental body. We have 86 signatory countries: 42 are from Africa, 20 from Asia-Pacific, 3 European and 21 from Latin America. Membership will be soon open to all UN member countries situated even outside the Tropics. We are waiting for US, China and Germany to become members. We need ratification by three more countries to bring the first amendment into force.
What are the key ongoing ISA programmes? What has been the progress under these?
We are assisting member nations and solar business community in many ways. One is bringing in corporates and other organisations as networking partners in a public-private partnership. We have a network of 48 partners, including private corporate partners such as SoftBank (Japan), CLP (Hong Kong) and India-based public corporate partners like IREDA, SECI, NTPC, PGCIL, REC, CIL, PFC, ITPO, SBI, NHPC, and EESL. We have partners in UN bodies like the UNDP, UNIDO, and UNEP, etc. and multilateral development banks such as the World Bank and the Asian Development Bank (ADB) as powerful partners.
ISA is running programmes in agriculture, rooftops, mini-grids, storage, electric vehicles, solar parks, solar cooling and heating (proposed), to create demand, capacity and ecosystems in member countries. We have aggregated demand for 270,000 solar pumps, 10,000 MW solar mini-grids and 1,000 MW solar rooftops worth $5 billion in the initial phase. Price has been explored for 272,000 diesel-to-solar pumps from 22 member countries (with the expertise of EESL) and five companies (four from India) have been empaneled to interact with member countries. Global tendering and mass procurement will bring down costs to a great extent for ISA member countries. Plans for the year include demand aggregation for 47-million solar home systems, 250-million LED bulbs, 50,000 primary health centers (PHCs), five-million solar cook stoves, 10,000 solar-powered HFC-free cold storage, 10,000 MW of solar parks and five-million solar powered street lights.
We are now facilitating two “Freedom solar parks” – 500 MW in Mali and 218 MW in Togo (West Africa), with NTPC acting as consultant to member countries and arranging grid connectivity, low cost loans and securing 25-year power purchase agreements (PPAs) on a transparent and competitive basis. Ten other countries have been identified to set up such parks. Under the STAR-C programme for capacity building, we have 213 “master trainers” trained with the assistance of Ministry of External Affairs. With IIT Delhi, we are starting an international MBA programme in solar energy next year.
How has the perception of financial institutions about solar power systems changed after Covid?
Renewable energy has so far been the energy source most resilient to lockdown measures. The longer-term prospects and economic rationale for renewable energy remain strong as costs continue to decline and the long-term price predictability over project lifetimes stands clear in comparison to conventional energy sources.
As a result, there is a growing consensus that a greater investment in clean energy will contribute to global recovery from the Covid-19 crisis and make economies more resilient against future shocks.
“Going forward, solar parks are going to be designed for 24X7 power supply with other renewable energy resources and energy storage as well for a stable power supply”
How is energy storage segment shaping up globally? Is ISA working on promoting solar-based storage as well?
Energy storage will assume a more important role in the future with increasing solar penetration due to four simple facts. Firstly, solar power is available in freely and abundantly and can be easily stored. Energy storage is also required to store the excess solar power that is not being used. Further, it will be needed when solar power cannot be transmitted due to grid constraints. Finally, it can be used to store and reuse solar power to produce green hydrogen. The cost of energy storage is going to be a key factor determining solar power uptake in the future. As it is, energy storage costs have already started declining and a further drop is expected in the near future. Moreover, going forward, solar parks are going to be designed for 24X7 power supply with other renewable energy resources and energy storage as well for a stable power supply.
At ISA, we are working with our member countries to develop a sort of energy storage policy. We want to aggregate energy storage demand and create a big market to drive down costs. This applies to electric vehicles as well.
How is the role of ISA likely to evolve in the coming years?
We are really looking forward to and working towards these two key initiatives among many others:
World Solar Bank: A World Solar Bank can reduce the cost of blended capital and make funds more accessible to island countries (SIDS) and least developed countries (LDCs). Even with a paid-up capital of $2 billion, it can nudge $50 billion per annum via co-financing at 20 per cent. All member countries and industries can benefit from a financial institution focused on solar energy. ISA will also facilitate the One Sun, One World and One Grid global project once India brings out a complete vision document for which work has commenced.
ISA CARE: As a response to Covid-19 crisis, ISA has launched ISA-CARE to solarise primary health centers in member countries, which require cold storage facilities for vaccines and medicines. We plan to launch a project, during our World Solar Technology Summit this year, polarisation of hospitals in 46 SIDS/LDC member countries. ISA wants to have all unelectrified Primary Health Centers and hospitals solarised in every district of our member countries.