Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy, was on a tour of Australia last week hard-selling investment opportunities in India to hard-nosed Australian investors. After four days of non-stop dawn-to-dusk meetings across Brisbane, Canberra and Sydney, Goyal was still fresh and energetic when BusinessLine caught up with him in Sydney on the sidelines of a round-table on Australia’s experience with rolling out smart meters. India is close to implementing smart meters, Goyal said, and at prices that will not pinch the pockets of consumers. This will be combined with the roll-out of 40,000 MW of roof-top solar power across the country, helping consumers benefit from net metering. Goyal is confident that the recent low tariff bids for solar power are realistic and achievable. Excerpts:

You’ve said that smart meters are the way to go. Why not incentivise consumers to install smart meters by supplying them at subsidised prices or allowing them to set off the cost in their user charges?

I would rather aim at a faster rollout on the back of lower costs than bank on subsidy. Your idea of using the LED model, for example, because we can take a small amount upfront and let them pay over a longer period through savings is very good and I’ll explore it when I go back (to India). My own intention is that in the next 5-6 years, India should be 100 per cent smart. We should look at a smart meter in every home and every installation because it helps you ultimately control consumption with time-of-day metering and helps consumers plan their expenditure on power.

But don’t you think we have to start looking at it holistically from the production of smart meters in India, which will make them affordable…

That is exactly what we’re trying to do. In Japan, I engaged with smart meter companies, in Australia we’re meeting them... the idea is to understand best-of-class technologies, use the best ideas that we can get from different companies around the world, plan our own specifications in a manner that they are effective and efficient and not wasteful. It need not have features that are not relevant in the Indian context. For instance, I need net metering in the cities but I don’t need it in small homes. I may not need net metering in multi-storey buildings in Mumbai, where we may not have enough space to put up roof-top solar installations.

Given the finances of the SEBs, how can they afford to finance the rollout of smart meters?

We’re supporting that largely through Integrated Power Development Scheme and Deendayal Upadhyay Gram Jyoti Yojana. Smart meter rollout is an integral part of both these central government supported programmes.

So when do you hope to commence the rollout?

I’ve had a few rounds of discussions with smart meter manufacturers in India. The Central Electricity Authority and BIS are working together to further improve the existing specifications and I think they’re at a stage where we can soon start looking at the procurement of smart meters at competitive prices that will attract international manufacturers to come and make in India.

You were just mentioning roof-top solar in the context of net metering. Why not make roof-top solar mandatory for multi-storied buildings while giving them plan approval?

I don’t believe in anything compulsory. I believe that we should encourage things voluntarily and make it so attractive that people like to do it.

Ok, let me rephrase my question. Why not incentivise domestic consumers to take the roof-top route?

See, the sad part is that India has always been a subsidy and incentives-focussed country. We’re trying to change that mindset to make it attractive and economically viable for people to get into modern technology. For instance, the LED project used to be subsidy-driven earlier but what did India achieve? Barely 0.1 per cent of the world market. The entire Indian market was measly and therefore very expensive. For my own home I had to buy LEDs paying ₹700-800 a bulb not so long ago. Today, because of the massive rollout and with technological innovations and transparent procurement through e-bidding, we’ve been able to bring down the price to barely 20 per cent of the original price. So, effectively people have got an 80 per cent subsidy through cost savings!

So, what would be comparative model for roof-top solar?

We’re looking at a fairly large-scale rollout of 40,000 MW of rooftop solar and I’m confident that with this large scale, costs will also come down. And as we roll out smart meters alongside, allowing time-of-day metering and net metering, the attractiveness of rooftop solar will be high, particularly for high consumption consumers such as industrial establishments and businesses whose tariffs are also higher. Domestic consumers may take some time given that their tariffs are still quite low.

You are bullish on renewables but somehow the enthusiasm has not rubbed off on wind power, which still appears hobbled in the country with just about 2,500 MW of installed capacity set to be added this year. Why?

Wind has a very peculiar feature of coming at very odd hours of the day and sometimes for lack of quality forecasting, it tends to make the grid unstable. It makes the grid operators uneasy and the utilities end up paying large amount of penalties for making the grid unstable. I’ve been talking to the wind industry and working with them to try and bring better quality of forecasting and scheduling of wind energy into the system. We’re looking also at ways in which to allow existing windmills to upgrade to much larger capacities so that land does not become a challenge. After all, there are only certain areas where wind energy is viable. Instead of a 200 kW unit, if we can go 80-100-120 m high in the same area and do a 2 MW or 5 MW windmill, the same land resource and same infrastructure can be used more efficiently. So, we’re working on smarter ways to keep the costs low, not focus on subsidies but bring in technology to improve the grid management.

But don’t you think that the model you followed in solar — of tariff-based competitive bidding — can be applied in wind as well?

We would certainly love to do that in the days to come. But what we need to understand is that in solar it has worked wherever there are large, utility scale plants of say, 50-100 MW at a time. Wind is still at a very small scale. And it has challenges of transmission into the grid and of scheduling and forecasting. So, we need to first figure out if we can do utility-scale wind farms and then go in for the bidding process. At an appropriate time, I’m certainly going to look at that also. But as of now, since it is a very dissipated industry farmed out into small generators across the country, it may not be possible to deploy the same bidding strategy as for solar.

Getting back to solar, there are apprehensions that the rock-bottom tariffs being bid now could, in the long run, mess up the entire solar industry…

Well, you much appreciate that I’m not bidding. These are smart businessmen who are bidding. And these days, it is not one or two bids but 18-20 bids in that range. So, it is not as if there’s something wrong in the process or in the pricing. Everyone has welcomed the competitiveness and equal opportunity nature of the process. People have also welcomed the pricing in the sense that it’s a fair opportunity price. It also depends on who the bidder is. Now, in the case of ₹4.34/unit, it was NTPC. So counter-party risk is at the barest minimum. Land and transmission was provided in the solar park. We also have higher radiation in that State. So it will change from bid to bid. I can assure you that all of them have reassured the government that they’re committed to implementing all these projects. What I’ve found is that those who criticise the price come and bid in the next round at that price! I think such arguments are just a ploy for pushing prices up, but we’ll not fall for that.

What about transmission which continues to be a bottleneck?

Not at all. Today we have enough transmission capacity across the country to make it one-nation-one grid. On December 29, it became one-price too. You could get power anywhere across the country at the same price. In January, it happened on three days. The Southern states, which were the most affected, used to earlier pay ₹15-18 a unit but now the prices have drastically dropped. Transmission to the southern grid has expanded by 71 per cent in the last 18 months alone. In the next two years, I’m hoping to expand another 80 per cent. So effectively, this government would have tripled the transmission to south India in its first 3 ½ years and by 2019-20, I hope to increase that to 6 times what it was when we came into power.

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