CDM potential of SPV lighting systems in India

Abstract

In view of the increasing interest in the development and dissemination of technologies for harnessing new and renewable sources of energy in India, there have also been some efforts towards their use in the domestic lighting sector. However, the cumulative number of Solar Photovoltaic (SPV) lighting systems such as SPV lanterns and solar home lighting systems in India is far below their theoretical potential despite government subsidy programmes. One of the major barriers is the high capital investment in these systems. The Clean Development Mechanism (CDM) provides industrialized countries with an incentive to invest in emission reduction projects in developing countries to achieve a reduction in CO₂ emissions at lowest cost that also promotes sustainable development in the host country. SPV lanterns and solar home lighting systems could be of interest under the CDM because they directly displace greenhouse gas emissions while contributing to sustainable rural development. However, only two SPV projects have been submitted under the CDM so far. This study assesses the maximum theoretical as well as the realistically achievable CDM potential of SPV lanterns and solar home lighting systems in India. The SPV lantern project is financially viable at a certified emissions reductions (CER) price of 34 € whereas the solar home lighting project is financially viable at a CER price of 46 €. While the maximum mitigation volume is about 35 million tonne CO₂ on an annual basis, an estimate of achievable CER levels is done using the past diffusion trends of SPV systems. We find that annual CER volumes could reach 0.8 to 2.4 million by 2012 and 5.6 to 13.6 million by 2020. This would require that the government sets the subsidy level for SPV lighting systems at a level that allows them to become viable with the CER revenue. From a macro-economic point of view this makes sense if the sustainability benefits are deemed sufficiently high to warrant promotion of this type of project.

Appendix I

Figure 9 presents the time variation of GDP per capital in India and China. For the future projection, the data on population has been taken from the data sets of Central Statistical Organization (CSO) for the year 1980–1981 to 2000–2001. The data for the year 2001–2002, 2006–2007, 2011–2012, and 2016–2017 has been taken from Dyson et al. (2004). The data between the above years has been interpolated. Table 13 presents the projections of GDP per capita in the low growth scenario (GDP to grow at a rate of 6% per annum) and high growth scenario respectively (GDP to grow at a rate of 8% per annum).⁴

Fig. 9

Time variation of GDP per capita in India and China. Source (http://www.econstats.com/weo/V015.htm)

With the inherent assumption that India will follow the development path of China (at present china is 95% electrified with a GDP per capita of 1554 US$), the results shows that India can achieve the current GDP per capita of China in the year 2022–2023 (in the low growth scenario) and 2018–2019 (in the high growth scenario) respectively. Therefore, it is assumed that India can achieve the 100% electrification in the year 2019 whereas the Indian government aims to achieve 100% village electrification by 2007 and 100% household electrification by 2012 (www. powermin.nic.in; www.bharatnirman.gov.in).

  Table 13 Projection of GDP per capita in different growth scenario