There is a list of 300-odd projects on the table from 35 countries for the officers of the International Solar Alliance (ISA) to wade through on a warm May afternoon. “It should take us about three hours at least,” says Upendra Tripathy, the interim Director General of the energy organisation with its headquarters at Gurugram, Haryana, as he disappears into the meeting.
Each country has proposed a raft of solar projects on their soil, to be set up under the aegis of the ISA. Niger, for instance, has endearingly demanded what it calls “electrification kits” for lighting up entire towns and villages. Others like Gabon are more specific: they want support to set up mini-grids. As individual items, they are small but when combined they are hard bargaining chips. They are essential for ISA to manage to gain legitimacy in the world of energy politics.
Meanwhile, and not unexpectedly, there are problems galore. Those problems are not about the feasibility of setting up the myriad projects or keeping them viable. Even as Tripathy holds a video conference with officials from the host countries about the nitty-gritty of the projects, the same week visiting US Energy Secretary Rick Perry told his Indian counterparts that his country is not ready to join the alliance yet.
His refusal is surprising. In the world of energy, the USA and India operate in different leagues altogether. USA has massive proven reserves of all fossil fuel. India only of coal. So, ISA should have appeared as an amusing diversion for Washington DC. Instead, the US administration first resolutely pushed to downgrade it as a civil society movement and once it saw that that was impossible, prevailed upon the members of the alliance to keep the entry free. The US insistence has compromised the financial viability of the organisation that moved into its formal headquarters only in March this year. The India government ratified the proposal in April.
Yet energy equations across the world are messy. As the world’s second largest importer of oil, India needs US support to nudge the Organisation of Petroleum Exporting Countries (OPEC) to keep prices reasonable, a prospect that has become more critical since the Trump administration scrapped the Iran nuclear deal. US naval cover in the Indian Ocean also helps India secure its coal imports line running even as China builds up its presence in the waters.
One of the reasons the US administration is leery of ISA is its potential to stamp down on the revived sales of American oil, gas and coal to the rest of the world. India has bought temporary peace by contracting large supplies of all the three, a move that Perry conspicuously appreciated.
There is also the history of experiences with the OPEC. Relations with the 14-member oil exporting group of nations over the decades has been searing for the USA and it does not exactly relish the prospect of contending with another energy grouping. Yet the organisation is central not only to India’s ambition to get its energy security right, it is also important to sew up friends with a common economic charter in an increasingly divisive world. Key friends are few in number yet.
Getting more significant allies could be tricky. ISA’s mandate was initially to bring together those countries whose geographies are located around the two Tropical Circles. France and Germany do not fall in those latitudes, but India is keen to change the rules to bring them in. One of the first non-tropical countries to sign up as member was France, looking to sell its Rafale fighters to India. India is keen to make Germany do so too. And to make the other countries support this change of goal post, they must discover value in the alliance.
What does ISA do for India? As of now, very little. Unlike oil, solar flares fall all over the earth and take much less to harness, nor do they offer an export market. Yet by creating this alliance, India expects to take pole position in the harnessing of this energy source to burnish its credentials for other world bodies too. One of those is a permanent seat in the security council of the United Nations. It isn’t surprising that China has not shown any interest in joining the Alliance, although it is a major exporter of solar panels and related equipment.
The past few years of this decade has seen a profusion of groups with economic themes popping up or reviving of old connections. The most prominent of those is China’s Belt and Road Initiative, the others being Transcontinental Pacific Partnership and the Regional Comprehensive Economic Partnership. India does not lead any of these, not even the BRICS Bank or the Asian Infrastructure Investment Bank (AIIB).
Yet to make its voice sound credible, India needs a forum of its own. The ISA might do so. It aims to pool in finance mechanism for the promotion of solar energy in member countries often through crowd-funding and technology transfer. The scale of these operations are puny as of now, but they show New Delhi has some ambitions and is building up staying power along with it.
Some of the reasons for the level of interest abroad about ISA is the pace at which India is trying to ramp up energy production within the country. On April 28, it announced all villages of India have been electrified and it expects to reach connection to all homes by the end of this year. Energy think tank Council for Energy, Environment and Water notes that India’s electricity demand is expected to triple to 2499 terawatt hours (TWh) by 2030 from 2012 levels. “The competitiveness of renewable generation vis-à-vis conventional generation means that the deployment of the former is a must to cater to India’s untapped demand for electricity,” its reports says.
Those investments also mean corresponding orders for the solar equipment manufacturers (mostly foreign ones). Despite the steep imposition of duties on Chinese and Malaysian imports, domestic manufacturers do not expect to supply more than 10 per cent of India’s demand for solar equipment. Through the ISA, India is already guiding the flow of investments to member countries. It is in the interest to the global manufacturers to make their national governments sign on as members of ISA to keep their order books filled. If in the process India can push up its heft in global alignments, these companies would not be annoyed.
