The wind energy sector has, as expected, turned in a very poor performance for the year 2018-19, with fresh installations of a paltry 1,481 MW.
When the industry recorded a high of 5,400 MW in 2016-17, it was expected to scale further heights in the coming years, but expectations have been badly belied.
Why it happened so, is a question that has been addressed in these columns many times. But to recap, it was due to the single-minded pursuit by the government of lower prices for the wind power sold to electricity distribution companies (discoms).
Go to the website of the Ministry of New and Renewable Energy (MNRE) and you’ll find the proud proclamation that the tariffs were driven to a record low of ₹2.44. The Ministry mindlessly introduced a cap — ₹2.83 a kWhr — above which energy companies could not quote in the tariff-based competitive bids that have become the norm. Then tenders have been cancelled because the tenderer — the government — didn’t like the tariffs it got.
Little wonder, therefore, that the latest round of auctions for 1,200 MW of capacity has attracted poor response. All bids by wind energy companies totalled to about half the tendered capacity. Add to this, the Gujarat government baulking on land allotment — because it wanted the lands for wind plants that will supply energy to it rather than to the Central government — and you have a cocktail of toxic policies, as reflected in the poor performance in 2018-19.
Tulsi Tanti, a doyen of the wind industry and the Chairman of the Indian Wind Turbine Manufacturers Association, doesn’t mince words. “We have suffered in the last two years,” he says.
Now, the highest negative impact of the over-focus on low tariff has been on the one crucial aspect of the economy, viz., jobs. The wind energy sector has always prided itself over two delectable positives — creation of rural jobs and production of power with zero use of water. Wind projects come up in far-flung areas, typically surrounded by villages. You don’t see any windmills in cities, do you?
In a June 2017 report, the Delhi-based think tank, Council on Energy, Environment and Water (CEEW), estimated that one MW of wind power creates 1.27 job-years of employment. Of this, 1.21 are in operations and maintenance (0.5) and construction and pre-commissioning (0.6). These are jobs that occur where it matters much, viz., rural areas.
But the impact is felt elsewhere too. As many as 4,000 small and medium-sized companies make components for wind turbines. Tanti says they employ about 2 million people and these jobs are imperilled. One MW of wind capacity results in 20 jobs, direct and indirect. Most of the on-site positions can be filled with local hands. If the emphasis is so heavily on low tariffs, turbine manufacturers like Suzlon, Gamesa and GE will still survive, perhaps by buying components from China, but these 4,000-odd MSMEs will go out of business.
Solar too in the blues
If this is the scene in wind, things aren’t much better in solar. In this segment of renewable energy, almost all of the equipment is imported, mostly from China. There is very little solar manufacturing and so not too many jobs at stake anyway, on the manufacturing side.
However, on the erection and commissioning side, falling installations mean jobs not created. This is particularly true of rooftop solar, the highest employment generator. CEEW estimates that each MW of rooftop capacity can create 24.72 job-years. (Ground-mounted solar plants produce 3.45 job-years per MW.)
Rooftop solar is the weakest performing segment in the renewable energy industry, with installations of just around 2.5 GW, way below the target of 40 GW to be achieved by 2022. In all, the renewable energy target of 175 GW by 2022 was estimated to generate 3,00,000 jobs. To reach the target, India must build around 100 GW of wind, solar, biomass and small hydro projects in the next three years.
Regardless of government’s optimism, it is difficult to see the target achieved. This in turn means job opportunities lost. They wouldn’t have been, if only the government had not been so fixated on low tariffs and made rooftop solar easier by allowing plant owners to sell their surplus energy to the grid.
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