India is harnessing renewable energy through the world's biggest solar farm. Here's how it happened.
- India is home to the world's largest solar farm.
- Financing for the project was sparked by G8 countries of the Climate Investment Fund in 2008.
As the world slowly moves toward renewable energy, one of the most complex dimensions of the transition is the obligation imposed upon developing countries, which also suffer some of the worst impacts of climate change. Why should emerging markets sacrifice growth to meet climate targets, when they were not the nations that caused the climate crisis in the first place?
It's a point that India's prime minister, Narendra Modi, raised at the 2021 COP26 summit in Glasgow, Scotland. Modi pledged that India would hit net zero by 2070 — two decades many of the Western countries, and a decade later than China. At last week's COP27 in Sharm El-Sheikh, Egypt, India affirmed that deadline.
Meanwhile, the world's richest countries pledged to contribute to a fund that would help developing countries deal with climate disasters.
There's also good news about climate investment coming out of India. The largest solar farm in the world is located in Rajasthan, in the country's northeast. Since construction began in 2015, Bhadla Solar Park has slowly grown to cover an enormous 5,700-hectare desert site with solar panels. And today it generates enough electricity to power 4.5 million homes.
"There was very little experience in India, and there were no real airtight regulations that had been tested," said Mohua Mukherjee, an economist at the Oxford Institute for Energy Studies, who used to oversee the World Bank's Indian Solar Energy program.
"It was more on a conversational basis with a group of developers who said to the government, well, there's this wasteland lying around that belongs to the government," said Mukerjee. "So if you can declare it a solar park and let us put up our panels, we will sell electricity to you."
The park was built in four phases, with each field of solar panels larger than the last. The buildout happened so quickly thanks to the involvement of the Climate Investment Fund — alongside more general multilateral development banks — which was set up by the G8 countries specifically to cofinance climate-mitigation projects.
"The way that we do that is by providing concessional resources," explained Daniel Morris, the clean energy lead at the fund. "That's finance that's really cheap, basically the cheapest money in the world, either through grants or, more often, heavily subsidized loans.
"With our $200 million we were able to mobilize $112 million in additional cofinancing just on this project, which has resulted in 5.6 million tonnes of CO2 reduced, and it has put 2.7 gigawatts of installed capacity on the ground."
The goal of the fund is to provide finance for technologies that are on the edge of commercial viability, or require funding to reach scale, Morris said. Bhadla, unsurprisingly, was a case of the latter.
"This was about scale," said Morris. "Solar panels were commercially viable in 2013 in a lot of places, it was just that the cost of generation was not competitive in places like India, and in Rajasthan, the way coal was. But now the cost of technology has come down so much that it's incredibly viable."
And the scale is paying off around the world. Today, solar is the cheapest form of energy the world has ever seen, according to the International Renewable Energy Agency, and the price of large-scale solar-panel deployment has fallen 85% in the past decade.
Hiccups and learnings
There is another important lesson from Bhadla that underscores how massive projects require careful logistical planning so the pieces fall into place at the right time.
"Phase one had a number of hiccups, which included the private-sector guys being ready with their panels, having taken loans, paying interest on those loans, and their power having nowhere to go because the evacuation arrangements weren't ready," Mukherjee said of building Bhadla.
"Evacuation" is an energy-industry term of art describing how generational projects need to be connected to a wider grid. And in India, this meant navigating the complex bureaucracy and politics of both the nationwide and regional electric grids.
"Transmission lines take about ten times as long to build as it takes to put up solar panels," Mukherjee said. "The sun was beating down on the panels and electricity was being generated, but it had nowhere to go."
The good news is that these lessons were learned, and later phases took grid connections into consideration. As a result, India now has a fairly thriving solar industry, with the construction of numerous other plants, including the 750-megawatt Rewa plant, in Madhya Pradesh. As a result of the investment and development, India hit its 2022 20-gigawatt solar-installation target in 2018, four years earlier than expected.
"I think it shows that when you make an effort to prioritize scale, things can ramp up very quickly," said Morris. "When you see technology costs dropping, sometimes precipitously like they have with solar panels, then the opportunity to do more just grows and grows."
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