A new ‘sun rise’ in the North East

A new ‘sun rise’ in the North East

  • Finance
  • June 6, 2022
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  • 5 minutes read

By Kumar V Pratap

India’s northeastern region (a collection of eight states, constituting 3.8% of the Indian population and 8% of her area) is crucial for achieving the country’s Paris Accord obligations as well as the COP26 Glasgow commitments (India to be carbon neutral by 2070, 50% of electricity capacity from non-fossil fuels and reduction of 1 billion tonnes of cumulative carbon emissions from business-as-usual by 2030). Not many among us would know with just 8% of the area, the North East Region (NER) contributes 24% to the national forest area. In addition, while India has 22% of its total area under forests, this statistic is 65% for NER. So, stretching the argument a bit, what Amazon is to the world, NER is to India.

However, with about two-thirds of its area under forests, there is very little land available for productive economic activities, which results in below average per-capita incomes and widespread poverty in the region. One index to measure this is the low level of per-capita power consumption in the region, which is a third of the national average. Other similar statistics are that NER accounts for only 1.1% of total electricity sales and 1.5% of the installed capacity in the country.

It is nobody’s case to make way for productive economic activities by reducing the forest area in the region. But, low level of power consumption in the region is a binding constraint to the economic prosperity of the region. In this scenario, an attractive option would be to exploit the vast untapped renewable energy (RE) potential of the region. As per ministry of new and renewable energy (MNRE) data, the total RE potential of the region is 129 GW, of which the realized potential is less than 4%.

As against a potential of about 62,300 MW of solar power in NER, the realized potential is only 176 MW (less than 0.3% of potential). Though the solar intensity in the North East is less than in say, Rajasthan, but the high average cost of supply of electricity in the region, would be able to absorb this constraint, to be able to supply RE power in a financially viable manner. As solar power is intermittent, the vast hydro potential of the region would help in providing Round the Clock (RTC) RE power in the region.

Solar power is land-intensive and land is a highly contested resource given the vast forest resource of the NER. However, as per International Renewable Energy Association (IRENA), solar power now accounts for almost a third of global renewable energy capacity, partly because of the many unconventional ways in which solar power can be generated: it is estimated that Germany could house around 20 GW of solar energy on water and this can be replicated in NER given the numerous water bodies in the region—as per World Economic Forum, floating solar power systems are also regarded as sustainable and are quicker to install.

Renew Power has recently won a tender for 400 MW of RTC RE power at a first year tariff of Rs 2.90 per unit of power. As already stated, the high average cost of supply in NER (as high as Rs 7.49 per unit of power in Nagaland in 219-20) leaves enough margin to address the issue of low solar intensity in the region to provide solar power in a financially viable manner. To make the NER the hotspot of solar energy in India, there may be a need to think differently—maybe a solar water park is the answer for putting up solar panels across widespread water bodies in the region. Utilization of more solar power in NER is necessary for the sake of the world, the country and the North Eastern Region.

The author is senior economic adviser, Government of India and former joint secretary (infrastructure policy and finance), Department of Economic Affairs, Ministry of Finance

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