Minerals in Our Solar Future

Business Standard     13th July 2020     Save    
QEP Pocket Notes

Context: If India walks the talk toward greater self-sufficiency in the renewable energy industry, it could slow the march of China to global dominance in the full spectrum of the solar energy industry.

Challenges from China in the solar energy sector:

  • Dominance of Chinese manufacturing: The global solar industry including Indian imports are heavily dependent on Chinese manufacturing.
  • India was the largest market for Chinese solar PV modules until the safeguard duties kicked in last year.
  • China’s solar industry is already producing equipment for 90GW capacity annually (compared to the global capacity of 120GW).
  • China launched the International Alliance for Renewable Energy, as part of the Belt and Road Initiative, to boost new export markets.
  • Costly alternatives: Alternative suppliers in the US, EU and Korea have higher prices, and it will take time for domestic manufacturers to scale up from the present 3 GW solar cell capacity
  • The largest producer of raw materials: Demand for minerals like cadmium, selenium, tellurium, germanium and indium (“minor minerals”) has increased.
  • They are essential for durability, enhanced electrical conductivity and for better light absorption and conversion to electricity.
  • China today produces over 60% of the world’s tellurium; it is the largest producer of cadmium, gallium, germanium, and among the largest in selenium.
  • India imports most of its requirements from China, Korea, Japan and Belgium.
  • Lessons from China: 
  • Quick approvals, incentives and low costs have been driving the Chinese solar manufacturing industry.
  • It created a huge domestic market and made technology transfer a condition for foreign companies’ access to it.
  • The Made in China 2025 plan intends to carry this forward with technological dominance and complete self-sufficiency.

Way Forward: As India is one of the largest markets for the solar sector, it should incorporate the following in its solar manufacturing strategy.

  • Strive towards greater self-sufficiency: Greater self-reliance would hurt the Chinese solar manufacturers as still $1.3 billion of Indian market is supports it.
  • Grabbing the opportunity with Make in India: Over the next decade, about 70% of the global growth of solar energy is likely to be in India, China, and the US.
  • Make in India should incentivize and forge technological alliances with companies from Japan, South Korea, the US and Europe.
  • To generate employment, which is a missed opportunity in case of continued reliance on imports.
  • The World Bank projects 500% growth in global demand for minerals from renewables by 2050.
  • Incentivize mining of minor minerals: Since minor minerals are not viable for stand-alone mining and processing, through tax measures and royalty waivers.
  • Strengthen technological capabilities: Public Sector Units and private companies engaged in mining, smelting, and processing of minerals capable of extracting critical minerals as byproducts of refining or from waste storage.
QEP Pocket Notes