India
The Ugly Side of Adani’s Solar Success Story
Dec 08, 2020
Adani's vast solar array blankets farms at Kamuthi, India

When large tracts of land are intensively developed for industrial infrastructure, governments should assess impacts on the environment and communities. Local critics and international experts say that this is not happening in the sprawling solar complexes that Adani is establishing on farmland in India. They warn that the country’s burgeoning renewable-energy industry could be brought into disrepute if environmental degradation and social dislocation are not addressed.

According to energy analysts, the renewable-energy company, Adani Green Energy, is the largest listed energy company in India and one of the world’s biggest developers of solar power. It operates 2.6 gigawatts of renewable-energy plants across India with a further 11.4 gigawatts of projects in the pipeline. The company aims to achieve 25 gigawatts of renewable power by 2025. By comparison, the entire capacity of coal-fired power stations in Australia is also 25 gigawatts.

Adani Green Energy was created when Prime Minister Narendra Modi, as part of the Paris Agreement on climate, committed to develop 275 gigawatts of renewable energy by 2027. The objective was to transform the country’s power sector from an expensive, unreliable and polluting system based on fossil fuels into a low-cost, reliable and low-emissions system based on renewable energy.

Already, Adani has developed ‘solar parks’ spreading over thousands of hectares of land in the Indian states of Rajasthan, Tamil Nadu and Andhra Pradesh. The electricity tariffs from these installations are generally 2 to 3 rupees per unit, undercutting some new coal-fired power stations by 60-70%.

A massive solar-energy installation in India. Photo WikiMedia Commons

The markets have lapped it up. Adani Green Energy has seen a 2400% rise in its share price since its launch in 2018. The share price rose 565% in 2020 alone. This is remarkable, says Tim Buckley of the Institute for Energy Economics and Financial Analysis (IEEFA), for a company that was in an embryonic stage only five years ago. Adani Green Energy’s current market capitalisation of US$15.6 billion is 40% above that of India’s largest thermal power generator, NTPC, a company with 22 times as much power-generating capacity.

The burgeoning share price reflects the market’s confidence that Adani Green enjoys the backing of Prime Minister Modi, leading to easy access to vast tracts of land in a lax regulatory environment.

With the world facing a climate crisis, Adani’s big move into solar-energy generation is to be applauded. But behind the glittering success of Adani Green lie some ugly truths.

Adani’s sprawling solar arrays require the acquisition of land from farmers and other inhabitants. There have been protests and court actions against these takeovers. Farmers say that valuable agricultural land is being alienated and that poor villagers are losing their only enduring assets. Compensation in the form of cash is short-lived.

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Nityanand Jayaraman, writing for Carbon Copy, says ‘from ramming hydro, nuclear and thermal projects down the throats of unwilling communities, the new era will see the violation of rights for ushering in the solar revolution’.

Powering the world with renewables, he writes, is easier than separating the Indian farmer from his or her land, quoting one farmer who says ‘coal, nuclear, solar. How does it matter? No farmer would want to part with his land, even for a large cash compensation because cash will be spent. That is the nature of money.’

Jayaraman quotes a local political organiser critical of Adani’s massive solar installation at Kamuthi in Tamil Nadu: ‘Putting 2000 hectares, including public waterbodies, off-limits for livestock and people is bound to have consequences on the local economy, particularly on the domestic economies of the poor.’

The publication Down to Earth has also reported on conflicts over land associated with large solar installations in India. It says long-term leasing agreements were introduced so that energy developers can lease low-yield land from farmers, providing them with a steady flow of income. But in practice, the report says, the land acquired by developers isn’t always so ‘barren’. With no regulations or penalties to draw the line, fertile land is often alienated to build solar power plants. Similar problems with land acquisition for solar utilities have been outlined by other publications, such as Mercom, Mongabay and The News Minute.

Identifying the social, environmental and economic consequences of such massive changes to land use - and then determining equitable responses - require thorough processes of assessment. Consultation with affected communities is essential. However, India’s increasingly deregulated economy and the ability of the Adani Group to get its own way under the Modi regime mean that such considerations are often swept aside.

At Kamuthi, for example, farmers say that Adani was allowed to blanket the land with its solar arrays even though no assessment had been carried out of the impacts on agriculture, water and livelihoods. The need to wash the panels led to depletion of groundwater supplies until the company started using desalinated water. A plant worker has subsequently revealed that highly saline wastewater has been discharged on to the land, a practice that is normally illegal. According to critics of the vast installation, several necessary licences and permits were not obtained, casting doubt over the legality of the project.

The Modi government shows no sign of rectifying such glaring inadequacies in its approvals system. On the contrary, the draft Environmental Impact Assessment (EIA) Notification of 2020 proposes to exempt the proponents of solar installations from having to assess the environmental and social impacts of their developments. This short-sighted measure threatens to exacerbate adverse community reactions to utility-scale solar installations and bring the industry as a whole into disrepute.

The scale of the problem cannot be overstated. According to IEEFA, India’s ministry for renewable energy set a target in 2016 for 40 industrial solar parks with a combined capacity of 20 gigawatts, and then in 2017 doubled it to 40 gigawatts by 2022. The concept involves a state government or distribution company facilitating a single connection to the national grid and taking on all the thorny problems relating to takeover of lands.

According to Mongabay, over 10,000 square kilometres of land at 19 sites in seven states have been officially canvassed for the installation of 54 gigawatts of renewable-power capacity – with complexes of at least 500 megawatts each. The implications of this land grab are immense. Indigenous farmers, water resources, and wildlife such as the critically endangered great Indian bustard are all likely to be adversely affected.

A massive Adani solar-energy project. Credit GreentechMedia

The industry has coined the term ‘solar parks’ to convey a benign impression of these complexes. It’s hard to imagine a less appropriate word than ‘park’ to describe land smothered by industrial infrastructure.

Mongabay quoted Lisa Linowes, co-chair of the US-based Wildlife Energy and Community Coalition, warning against the ‘blind’ pursuit of mega renewable-energy projects without understanding their larger impacts.

‘Solar and wind-power developers are installing large projects which are yielding large financial rewards for them, but the policymakers are forgetting that it is leading to a huge impact on wildlife and communities. We need to ensure wildlife and communities coexist [with energy installations] otherwise the current policies are inexcusable. India, in fact, has an opportunity to learn from the USA’s renewable programs, including the mistakes made, before embarking on a similar path,’ she noted.

As Nityanand Jayaraman warns, ‘India’s celebrated rollout of solar power, with its emphasis on utility-scale projects, is repeating the mistakes of erstwhile grandiose, monumental projects like large hydro and thermal power plants’.

To avoid cruel dispossession of land-holders and adverse environmental consequences arising from the indiscriminate installation of vast solar arrays, the relevant corporations, including Adani Green, must commit to:

  • An approvals process that is fair, consultative, thorough and transparent;
  • Full assessment of environmental, social and economic impacts of proposed installations;
  • Equitable leasing of land from owners and fair compensation for other traditional users;
  • A code of practice that requires a defined minimum of land in utility-scale solar installations to be set aside for protecting natural assets (eg streams, streamside vegetation, patches of forest);
  • No development in places where social and/or environmental consequences are high.

Adopting such measures could lead to win-win outcomes for renewable-energy companies, indigenous farmers and the local environment. The alternative is to tarnish the reputation of the renewable-energy industry in India. That would be a tragic outcome that the world’s climate cannot afford.

(Adani was approached for responses on the major assertions in this story but did not reply)