India must strengthen grid infrastructure to support its “strong push” towards renewable energy especially solar, said the head of the International Renewable Energy Agency (IRENA).
“The main constrain in India right now is the grid,” said IRENA Director-General Adnan Z Amin. “There is a huge upsurge in investment,” he said of the renewable projects being implemented in the country. India has set a target of 175 GW of renewable energy, including 100 GW of solar, to be installed by 2022.
Investment is not a constrained while a lot of companies are re-tooling their production capabilities, he noted. “I think renewable energy has a huge future in India and it is moving really very fast,” Adnan told reporters after deliverying a keynote address at the campaign launch of Singapore International Energy Week to be held from Oct 29-Nov 2, 2018.
He also recommended that the government should try to create an investment climate where the cost of finance comes down. “One of the other problems in addition to grid…is that there is a lot of risks priced into cost of capital that makes it more expensive than other places,” he pointed out, listing out currency and policy risks among others.
Adnan calls for a clear long-term reliable policy framework and hedge mechanism to attract investors. Given long-term reliable policy framework, investors would come to the table for renewable projects, he added. He also appreciated success of mini-grids and stand alone solar installations as part of the rural electrification in the country.