Global solar grid could cause sun burns

The Indian government has floated the idea of a global renewable energy grid, called “One sun, one world, one grid” (OSOWOG). India’s imagination is driven by a rather poetically phrased official mantra that “the sun never sets”. The underlying logic is that a grid spread across multiple time zones could balance intermittent renewables with other renewables: the setting sun in one part of the grid is made up for by solar, wind or hydropower produced in a distant place.

For decades India has tried to build a much smaller multi-country grid in South Asia. The idea of a global grid, with “India acting as fulcrum”, as news reports have quoted government officials saying, is a step change in rhetorical scale.

The idea is a part of the International Solar Alliance, this government’s flagship foreign policy move, which aims to help over 120 countries develop solar grid capacity. Recent reports suggest that the government is even considering investing in a solar bank to fund global solar development. The vision of a global grid conceptually, and literally, connects these enterprises.

This ambition puts India alongside other major powers and their super-grid projects. The vast continuous stretch of the Eurasian landmass is home to three separate continent-sized projects, China’s Global Energy Interconnection project, Europe’s gold-standard power pools and now India’s. They sit alongside smaller regional structures such as the Southeast Asian pool. The leading edge of China’s efforts, called GEIDCO, is a visible face in international climate change forums and has, in recent years, been active in offering power deals to several countries across the world, including Bangladesh in 2017. OSOWOG will have to find ways of engaging with Chinese ambitions in a constructive manner rather than in a zero-sum way.

This project’s success hinges on trust, not just transmission lines, between grid participants. Interconnected grids give countries the power to bring other economies to a grinding halt; this is the single biggest hurdle to integration. To get around this, power pools across the world, most notably those in Europe such as Nordpool, have tried to build independent supranational institutions to take decisions about how the grid should be run and conflicts settled. These are rule-based organisations that are, technically at least, insulated from the day-to-day politics of their constituent countries. It assures that a small country with scarcely any leverage over a large neighbour can partake in the benefits of a large, renewable-powered grid. Institution building is, thus, key to fulfilling the ambitions of a multi-country grid project. The renewable energy minister’s recent observation that “it is only a question of transmission” belies the hard diplomatic and institutional work required of the government.

Institutions have been a weak link in recent experience. Mere days after the Modi government came to power in 2014, the region made a breakthrough with the signing of a SAARC framework agreement for electricity trade. It established a liberal, market-oriented tone to the region’s ambitions. This diplomatic coup was rapidly undone just a few years later in 2016 when the Indian power ministry circumvented the SAARC agreement. It unilaterally issued a set of protectionist trading rules to fence off the large Indian market from Chinese generation investments in South Asia. The decision sparked two years of diplomatic challenges from neighbours, who complained that the liberal spirit of the SAARC framework agreement had been undermined with no discussion or warning. The Indian government ultimately revised the rules in 2018, removing some restrictions and meeting key demands from neighbours, but not without having generated scepticism along the way.

India’s first stop in this latest experiment is a series of grid connections between India, West Asia and Southeast Asia. With small quantities of electricity, such lines could operate without institutional scaffolding. But, higher volumes will require rules and impartial rule-making bodies. The first step should be to create a transparent institutional model that is attractive to prospective participants on the long road ahead. India already has the rudiments of such a system in its well-governed and growing power exchanges. Recent experiences, and successful global models, deliver a clear message: power pools cannot be built without an institutional architecture other countries trust.

(This article was originally published in Financial Express on June 25, 2020.)

Environmentality is a collection of ideas, perspectives, and commentary by researchers at the Initiative on Climate, Energy and Environment, Centre for Policy Research, New Delhi. Views and opinions expressed in this blog are solely those of the authors. They do not represent institutional views.

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