International Solar Alliance Cell and World Bank Signs Declaration for Promoting Solar Energy

• In a significant push for solar power, the World Bank has signed an agreement with the International Solar Alliance (ISA) to mobilize $1 trillion in investments by 2030. This agreement establishes the World Bank group as a financial partner for the alliance.
• Major areas identified for working jointly include: a) Developing a roadmap to mobilize financing; b) Developing financing instruments including credit enhancement, reduce hedging costs/currency risk, bond raising in locally denominated currencies etc. which support solar energy development and deployment; c) Supporting ISA's plans for solar energy through technical assistance and knowledge transfer; d) Working on mobilization of concessional financing through existing or, if needed, new trust funds ; e) Supporting RE-INVEST events. In addition, both sides decided to work in other areas and themes as jointly decided.

About Solar Alliance

• India’s prime minister has launched an international solar alliance of over 120 countries with the French president, François Hollande, at the Paris COP 21 climate summit.
• The Alliance is likely to boost the absorption and deployment of solar power, which has already seen exponential expansion in the last five years — between 2010 and 2014, the installed capacity of solar energy across the world has grown from 23 GW to about 180 GW.
• It is an invitation to 121 countries lying between the Tropic of Cancer and the Tropic of Capricorn, which get the most solar insolation, to make collaborative efforts to harness solar energy to generate electricity. Most of these countries are in Asia, Africa and South America, and many of them are power deficient.
• By coming together to install solar power plants, these countries can drive up the demand for solar technologies manifold, in the process forcing down prices even more. Currently, the growth of solar installed capacity has been coming from very few countries.
• This alliance can bing standardization to manufacturing processes and solar technologies. If every country starts using similar products and processes, costs of manufacturing elements of solar technologies can fall substantially.
• A keenly awaited technology breakthrough is in the area of storage systems. There is currently no way to store the electricity being produced by solar systems, because of which the sun is not the most reliable energy source on many days.
• India will provide money and infrastructure to this alliance. India has committed itself to providing Rs 400 crore over the next five years to building infrastructure and meeting recurring costs. A secretariat is being set up in New Delhi. Till a building is constructed, the secretariat will function from the Delhi-based National Institute of Solar Energy. India is leading world from the front by launching various initiatives regarding solar energy. India has a capacity of 4 GW and has set a target of adding 100 GW of solar power by 2022.

Analysis:

• More than 180 nations have submitted national action plans in Paris climate summit , but they are not enough to achieve a goal of limiting global warming to 2 degrees Celsius above pre-industrial times . solar energy will help to reduce the emission of green house gases. The alliance from both developed and developing countries aims to mobilise USD 1 trillion by 2030 to be invested in the generation of clean solar energy.
• The Solar Alliance model, if it succeeds, can potentially be extended to other forms of renewable energy like wind or biogas. It can, in turn, foster south-south cooperation and bring transformational changes in providing affordable access to energy in poorer countries, and lift living standards.
• It is a truly brightening move. This will undoubtedly encourage global corporates to initiate more bold steps in utilising solar power. This initiative is bound to have a knock-on effect on other forms of renewable energy as well.

By: Vishal