1. Hits and misses: India’s solar power energy targets

How far has India come with respect to solar power generation and storage? Why do the authors of the report say that India will not meet its 2022 solar goal?

A report prepared by JMK Research and Analytics and the Institute for Energy Economics and Financial Analysis says India will likely miss its 2022 target of installing 100GW of solar power capacity.

The report states that as of April, only about 50% of the 100GW target, consisting of 60GW of utility-scale and 40GW of rooftop solar capacity, has been met. Nearly 19GW of solar capacity is expected to be added in 2022 — 15.8GW from utility-scale and 3.5GW from rooftop solar.

India’s rooftop solar market struggled to grow initially, held back by lack of consumer awareness, inconsistent policy frameworks of the Centre/ State governments and financing. However, thanks to falling technology costs, increasing grid tariffs, rising consumer awareness and the growing need for cutting energy costs, the rooftop solar market is gradually coming up.

The story so far: A report, jointly prepared by two energy-research firms — JMK Research and Analytics and the Institute for Energy Economics and Financial Analysis — says India will likely miss its 2022 target of installing 100 gigawatts (GW) of solar power capacity. This is because of rooftop solar lagging behind, the authors say.

What is India’s solar policy?

Since 2011, India’s solar sector has grown at a compounded annual growth rate (CAGR) of around 59% from 0.5GW in 2011 to 55GW in 2021. The Jawaharlal Nehru National Solar Mission (JNNSM), also known as the National Solar Mission (NSM), which commenced in January 2010, marked the first time the government focussed on promoting and developing solar power in India. Under the scheme, the total installed capacity target was set as 20GW by 2022. In 2015, the target was revised to 100GW and in August 2021, the government set a solar target of 300GW by 2030.

India currently ranks fifth after China, U.S., Japan and Germany in terms of installed solar power capacity. As of December 2021, the cumulative solar installed capacity of India is 55GW, which is roughly half the renewable energy (RE) capacity (excluding large hydro power) and 14% of the overall power generation capacity of India. Within the 55GW, grid-connected utility-scale projects contribute 77% and the rest comes from grid-connected rooftop and off-grid projects.

What does the report say?

As of April, only about 50% of the 100GW target, consisting of 60GW of utility-scale and 40GW of rooftop solar capacity, has been met. Nearly 19 GW of solar capacity is expected to be added in 2022 — 15.8GW from utility-scale and 3.5GW from rooftop solar. Even accounting for this capacity would mean about 27% of India’s 100GW solar target would remain unmet, according to Jyoti Gulia, co-author of the report and Founder, JMK Research. A 25GW shortfall in the 40GW rooftop solar target, is expected compared to 1.8GW in the utility-scale solar target by December 2022. Thus, it is in rooftop solar that the challenges of India’s solar-adoption policy stick out.

What are the reasons for rooftop solar adoption not meeting targets?

In December 2015, the government launched the first phase of the grid-connected rooftop solar programme to incentivise its use in residential, institutional and social areas. The second phase, approved in February 2019, had a target of 40GW of cumulative rooftop solar capacity by 2022, with incentives in the form of central financial assistance (CFA). As of November 2021, of the phase 2 target of 4GW set for the residential sector, only 1.1GW had been installed. The disruption in supply chains due to the pandemic was a key impediment to rooftop solar adoption.

In its early years, India’s rooftop solar market struggled to grow, held back by lack of consumer awareness, inconsistent policy frameworks of the Centre/ State governments and financing. Recently, however, there has been a sharp rise in rooftop solar installations thanks to falling technology costs, increasing grid tariffs, rising consumer awareness and the growing need for cutting energy costs. These factors are expected to persist giving a much-needed boost to this segment, the report notes. Going ahead, rooftop solar adoption is expected to proportionally increase as land and grid-connectivity for utility solar projects are expected to be hard to come by. Factors impeding rooftop-solar installation include pandemic-induced supply chain disruption to policy restrictions, regulatory roadblocks; limits to net-metering (or paying users who give back surplus electricity to the grid); taxes on imported cells and modules, unsigned power supply agreements (PSAs) and banking restrictions; financing issues plus delays in or rejection of open access approval grants; and the unpredictability of future open access charges, the report notes.

How critical is solar power to India’s commitment to mitigate climate change?

Solar power is a major prong of India’s commitment to address global warming according to the terms of the Paris Agreement, as well as achieving net zero, or no net carbon emissions, by 2070.

Prime Minister Modi at the United Nations Conference of Parties meeting in Glasgow, in November 2021, said India would be reaching a non-fossil fuel energy capacity of 500 GW by 2030 and meet half its energy requirements via renewable energy by 2030.

To boost the renewable energy installation drive in the long term, the Centre in 2020 set a target of 450GW of RE-based installed capacity to be achieved by 2030, within which the target for solar was 300GW.

Given the challenge of integrating variable renewable energy into the grid, most of the RE capacity installed in the latter half of this decade is likely to be based on wind solar hybrid (WSH), RE-plus-storage and round-the-clock RE projects rather than traditional solar/wind projects, according to the report. On the current trajectory, the report finds, India’s solar target of 300GW by 2030 will be off the mark by about 86GW, or nearly a third.

The authors in fact speculate that that the government, in the short-term, will aggressively push for expediting solar capacity addition to achieve the 100GW target by 2022 by re-allocating some of the unmet rooftop targets to utility-scale projects.

2. Alarm bells over Nepal’s dwindling forex reserves

What has led to loss of remittances? What are the external factors pushing Nepal towards double digit inflation?

According to an April 12 report on the ‘Current Macro Economic and Financial Situation’ by Nepal Rastra Bank, the country’s forex reserves have plummeted by 18.5% to $9.58 billion in March from $11.75 billion in July 2021. Decline in foreign remittances are the main reason for the shortfall in forex reserves.

There is huge inflationary pressure on the Nepal economy due to the fall in global tourist flow and the energy crisis caused by Russia’s invasion of Ukraine.

For the upcoming elections, the Election Commission of Nepal will require at least 10 billion Nepali rupees which will mean diversion of a large amount of resources for the democratic process.

The story so far: In an unusual development, the government of Prime Minister Sher Bahadur Deuba sacked the head of its central bank, Maha Prasad Adhikari, last Friday accusing him of leaking sensitive information and for failing to perform his duties. The decision, which violates the autonomy of Nepal Rastra Bank, was taken in the backdrop of tense relations between Finance Minister Janardhan Sharma and Mr. Adhikari over how to address Nepal’s crisis of falling forex reserves. According to an April 12 report on the ‘Current Macro Economic and Financial Situation’ by Nepal Rastra Bank, the country’s forex reserves have plummeted by 18.5% to $9.58 billion in March from $11.75 billion in July 2021. The current forex reserves are enough to pay the government’s import bills only for the next seven months or so, say experts.

Why have Nepal’s forex reserves fallen?

Nepal’s economy is highly dependent on imports as the country buys a range of merchandise goods apart from fuel. The prevailing weak economic indicators mean that Nepal is spending from its forex reserves faster than it can save. Renowned Nepalese economist Bishwambhar Pyakurel, former head of the Department of Economics of Tribhuvan University in Kathmandu, contends that Nepal will soon have double-digit inflation. “If current trends continue then double-digit inflation will hit us by June/July,” said Dr. Pyakurel. According to the Nepal Rastra Bank, the current rate of inflation is 7.14%.

How bad is the situation?

Nepal’s forex reserves situation appears healthy as of now as the country, unlike Sri Lanka, is not burdened by external debt. There are, however, concerns that the lower middle income economy is being battered repeatedly by external factors and that may precipitate a crisis sometime soon. Nepal which is blessed with one of the finest tourism sectors in South Asia, because of the Himalayan mountain range, suffered during the COVID-19 pandemic as global tourist flow fell. This was followed by the global energy crisis caused by Russia’s invasion of Ukraine. This has put extraordinary inflationary pressure on the economy. Dr. Pyakurel says all economic indicators are declining and the real shortfall in forex reserves is because of the decline in foreign remittances which suffered during the pandemic when the Nepalese work force abroad suffered job losses. The situation has not stabilised and Nepal’s forex reserves continue to slide. Dr. Pyakurel points out that it’s not time to panic but warns, “We have enough forex for buying merchandise just over seven months. This does not look good as we also have a balance of trade crisis with major partners.”

Can the energy scene in Nepal escalate economic woes?

Nepal’s primary supplier of energy is Indian Oil Corporation (IOC). Nepal Oil Corporation (NOC) pays IOC in two instalments every month, on the 8th and the 23rd. The NOC has been in crisis for months as high global prices depleted the company’s savings, prompting it to approach the government for a lifeline. The Government of Nepal has agreed to provide NOC the necessary amount to continue supplies from IOC. There were concerns in Kathmandu about the payment due on April 23, but for the time being sufficient funds have been allocated to NOC to pay IOC for the next instalment. However, NOC’s financial status makes it unattractive for banks and as a result the public sector company does not enjoy confidence in the market. Dr. Pyakurel, however, says there is a need to protect NOC from the effects of the current energy crisis in the world which has erupted after the Ukraine crisis. Nepal’s history shows that any uncertainty regarding fuel can trigger serious internal problems as was visible during the 2015-16 blockade when disruption of fuel supply from India caused distress in Nepal.

Will the economic situation have an impact on upcoming elections?

Nepal will hold local level polls on May 13 which will be followed by general elections towards the end of the year. The election process requires considerable financial allocation and Nepal has received support in the past for elections from international donors like the USAID. These donors help in carrying out pre-election staff training and logistics that are part of any democratic process. But there are uncertainties about such international support because of the difficulties that most of the traditional partners are facing. Dr. Pyakurel said the Election Commission of Nepal will require at least 10 billion Nepali rupees for the election process and that will mean diversion of a large amount of resources for the democratic process.

Where do the political parties stand?

Nepal’s political process will begin from May when the Nepali Congress will be challenged by the Communist Party of Nepal (UML). The political dynamics are partly responsible for the friction between finance minister Janardhan Sharma and the suspended Rastra Bank chief appointed by the previous government of Prime Minister K.P. Sharma Oli, who was in power till July 2021. Mr. Sharma, a former Maoist commander, belongs to the Pushpa Kamal Dahal ‘Prachanda’–led Maoist Centre of the ruling alliance. Dr. Pyakurel points out that the political bickering may have been a contributory factor to the worsening economic situation.

3. Nod to extend Gram Swaraj scheme

Programme aims at improving governance of Panchayati Raj institutions

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal to continue the Rashtriya Gram Swaraj Abhiyan (RGSA), a scheme for improving the governance capabilities of Panchayati Raj institutions, till 2025-26.

The CCEA, at a meeting chaired by Prime Minister Narendra Modi, approved the extension of the scheme that ended on March 31 at a total financial outlay of ₹5,911 crore, of which ₹3,700 crore would be the Centre’s share and ₹2,211 crore the share of States.

“The approved scheme of RGSA will help more than 2.78 lakh rural local bodies… to develop governance capabilities to deliver on SDGs [Sustainable Development Goals] through inclusive local governance with a focus on optimum utilisation of available resources,” a government statement said.

The statement said the scheme would work towards “poverty-free and enhanced livelihood in villages; healthy villages, child-friendly villages; water-sufficient villages; clean and green villages; self-sufficient infrastructure in villages; socially-secure villages; villages with good governance and engendered development in villages.”

The government said panchayats would be strengthened and a spirit of healthy competition inculcated. No permanent posts would be created under the scheme but “need-based contractual human resources may be provisioned for overseeing the implementation of the scheme and providing technical support to States/UTs”.

While announcing the decision to extend the scheme that started in 2018-2019, Information and Broadcasting Minister Anurag Thakur said the government’s focus had been the development of rural areas which, he said, had been neglected after Partition.

4. SC refuses to take up plea for uniform code for religious institutions

Petitioner had sought axing of the Waqf Act

The Supreme Court on Wednesday refused to entertain a petition to direct the enactment of a “uniform code” for trusts, charitable institutions and religious endowments across all faiths, and axe a “special” law governing waqfs and waqf properties.

A Bench led by Justice D.Y. Chandrachud said the petitioner, advocate Aswini Kumar Upadhyay, could not file an “abstract” petition demanding the nixing of the Waqf Act of 1995, claiming the law granted special favours to Muslims and discriminated against Hindus and followers of other faiths.

“If you are aggrieved by the law, you can challenge its validity. But you cannot challenge a law in the abstract… Has your property been appropriated because of this law [Waqf Act]… What is your problem?” Justice Chandrachud asked Mr. Upadhyay.

The petitioner claimed that the “interest of Hindus, Jains, Buddhists, Sikhs and other non-Islamic religious communities is involved in the matter and the public in general is suffering due to conferment of unbridled powers to waqf Boards and granting special status to waqf properties and thus others are being discriminated before law and denied equal protection of law”.

“But how are you aggrieved by the law. Were you evicted from your property? Was your trust property wound up?” Justice Surya Kant, on the Bench, asked Mr. Upadhyay.

Justice Chandrachud said the court could not issue a mandamus to Parliament to enact a “uniform law”. “We have to be very careful while entertaining a PIL challenging a law enacted by the legislature… If the PIL is on environment or education, etc. we can entertain it,” Justice Chandrachud said.

Mr. Upadhyay urged the court to let him read out a two-page note summarising his petition but the Bench said it had already read the petition. The court asked Mr. Upadhyay to give a straight answer to its two questions: one, how can a court issue a mandamus to the legislature or Parliament to enact a particular law and, two, why should the court entertain an abstract petition which does not show any particular case of infraction caused by the Waqf Act.

Mr. Upadhyay immediately sought the court’s permission to withdraw. He said he should be given liberty to approach the High Court.

The Bench allowed him to withdraw and seek whatever “remedies available in law”.

“No opinions have been expressed by this court,” Justice Chandrachud observed.

5. Finland to decide on NATO membership ‘within weeks’

Rattled by Russia’s invasion of Ukraine, Finland’s Prime Minister said on Wednesday the Nordic nation would decide whether to apply for NATO membership “within weeks”, despite the risk of infuriating Moscow.

Helsinki’s Parliament will next week open a debate about joining the Western alliance after the Ukraine war sparked a dramatic U-turn in public and political opinion in Finland and neighbouring Sweden over long-held policies of military non-alignment.

Attempting to join NATO would almost certainly be seen as a provocation by Moscow, for whom NATO’s expansion on its borders has been a prime security grievance.

But Prime Minister Sanna Marin said Finland would now decide quickly on whether to apply for membership of the North Atlantic Treaty Organization.

“I think it will happen quite fast. Within weeks, not within months,” Ms. Marin told a Stockholm press conference with Swedish Prime Minister Magdalena Andersson.

Sweden is also discussing NATO membership following Russia’s February 24 invasion.