India is in a significant push in its long-term imaginative and prescient of supporting home PV producers with its production-linked incentive (PLI) scheme to construct enormous capacities throughout the worth chain and the permitted record of fashions and producers ALMM which deters imports of modules. The newest improvement has been Photo voltaic Power Company of India (SECI) releasing the tender for the PLI’s second tranche which goals to assist 65GW of producing capability.
PV Tech Premium caught up with Gyanesh Chaudhary, vice-chairman and managing director at Indian PV module producer Vikram Photo voltaic, which has a 2.5GW annual manufacturing capability, to debate the considering behind the ALMM and PLI schemes and whether or not ingot and wafer manufacturing is lifelike in India.
PV Tech Premium: Is there something you want to have seen modified within the PLI scheme?
Gyanesh Chaudhary: I really feel that the downstream producers had been left slightly excessive and dry within the PLI. One of many largest chunks of the INR195 billion (US$2.6 billion) allotted to PLI has gone into the upstream worth chain for polysilicon and wafers. It’s difficult to see that occur whereas there are enormous demand-supply gaps for cells and modules and never sufficient funding allotted to construct massive capacities when it’s the want of the hour.
Additionally, by way of timelines, polysilicon will take 4 to 5 years to return on-line as a result of it’s nearly like establishing oil refineries. It’s that critical a dedication and India has by no means made a single tonne of polysilicon to this point, however the downstream infrastructure and ecosystem already exists. Possibly not in an enormous scale, but it surely does exist and it’s able to develop.
The second vital level is that the construction of PLI doesn’t contain present producers. It solely talks about greenfield. Whereas producers like us, and so many others who’ve developed know-how practices, sturdy groups and execution functionality over a decade, don’t really feel rewarded within the PLI. We will scale ahead of a brand new entrant contemplating our general dedication to the sector. Nonetheless, the PLI is a robust software from the federal government to manage funding in home manufacturing.
The three winners in first spherical had been Adani, Reliance and Shirdi Sai. Do you count on these firms to dominate once more within the second spherical?
There’s a dichotomy as a result of within the first PLI tranche there was a 4GW cap on how a lot capability you possibly can arrange underneath the scheme. Within the second tranche that received modified to 10GW. So now the identical firms that gained within the first spherical can apply for an extra 6GW. Now you possibly can learn between the traces as to what has occurred right here. However having mentioned that, I really feel that bigger the chunk in the direction of polysilicon and growing the cap, have each facilitated an oligopolistic surroundings.
Contemplating there are such a lot of firms like us who’re placing pores and skin within the recreation and dealing on the sector day in and time out, it looks like one thing extra ought to have been finished.
Is wafer and ingot manufacturing even attainable in India?
Your apprehension will not be unfounded. India to this point doesn’t make a single wafer. However by way of know-how, the acquisition of this manufacturing course of and the entire ecosystem round that has stabilised considerably during the last two or three years, which provides producers like us the arrogance that we will not simply make investments, but in addition set up and efficiently execute these massive gigawatt-scale initiatives for wafer and cell. India is already doing modules so there isn’t a problem there.
Sure, additional upstream manufacturing is a time-consuming course of and the ecosystem is much less advanced, contemplating that is going to be a brand new import substitution course of. However producers like us who’ve been round for 17 years are pretty assured of the in-house functionality in addition to tapping into international expertise to make sure success of those traces.
What are your ideas on the ALMM coverage that stops non-Indian producers from promoting modules in India?
The frequent information is that ALMM is constructed to discourage non-Indian product. I feel it’s the opposite method round. it’s to advertise producers and merchandise that may maintain their floor.
The federal government took a cue from the wind business, the place they’ve non-tariff boundaries in opposition to materials coming in that doesn’t embody dedicated assist from the suppliers. We’ve usually seen that the present overseas importers don’t decide to that. This implies the venture IRR takes a really huge hit and builders are left slightly bit out within the chilly with respect to how they’re going to satisfy their technology deadlines. This results in losses then and the returns are already fairly skinny, so ALMM was constructed to offer some surety.
What in regards to the affect on builders seeking to set up initiatives as shortly and on the lowest price attainable?
As for builders, any supply of any mandate is a painful course of. So, if we are saying that one is successful over the opposite, I feel that will be unjustified. The builders have equal duty and possession on the best way they’ve bid for initiatives and the way they win and with what price facets they’re contemplating.
Having mentioned that, due to the risky nature of the photo voltaic business, the availability chain volatility from COVID-19 didn’t assist. We had about 40% enhance in commodity pricing, which was all including as much as general price will increase. The builders had beforehand bid at PPA charges, which couldn’t commensurate this worth rise. So, we’re in a state of affairs the place the longer term appears extraordinarily vivid, however the present interval is unquestionably a problem, which we might want to see by means of. We can even have to stroll the trail hand in hand with the builders and make it possible for we make it sustainable.
India is sitting on 59-60GW of cumulative renewable power capability so wants to put in 50GW of technology capability yearly to attain its 2030 renewable power goal of 500GW, which is a humongous job contemplating we’ve not crossed 10-15GW a 12 months in any situation to this point. All of this results in very critical dedication from the federal government to encourage the personal sector. Now all we’d like is massive swimming pools of capital to construct this chance right into a actuality.