What Mukesh Ambani does today, the government — and the rest of the country — will do tomorrow, it seems. Even as the Central Government takes its first, tentative steps towards developing its hitherto untapped offshore wind energy potential, energy behemoth Reliance Industries Ltd is already moving to set up a captive 5 MW offshore plant off the Gujarat coast.

RIL’s subsidiary Reliance New Energy Ltd — which has already announced a ₹75,000 crore investment plan for green hydrogen — already has a tie-up with Danish green energy specialist Stiesdal, which also happens to have an offshore wind energy subsidiary of its own. As with everything it does, RIL plans to capture the entire value chain in renewable power — from manufacturing solar photovoltaics to wind turbines to, earlier this week, buying a majority stake in Sensehawk, which makes specialised software for solar power generators.

Unfortunately, this ‘get-up-and-do’ attitude is largely missing when it comes to the government, which has been setting increasingly ambitious targets for renewable energy, but has often failed to address bottlenecks on the ground which have so far prevented India from actually achieving its vast potential of renewable energy from solar and onshore and offshore wind. This is not to say that we have not been trying. At first glance, India’s achievements actually look quite impressive. India’s total installed capacity of renewable energy from all sources (excluding large hydro) stood at 114.07 Gigawatts (GW) as of June-end this year, according to a written reply to a Parliament question by the Minister for New and Renewable Energy. Further, a capacity of 60.66 GW is under various stages of implementation, while 23.14 GW capacity is under various stages of bidding, the reply stated.

This should, provided the projects under implementation get completed within this year, put India at, or even past, its self-imposed target of achieving 175 GW of renewable energy capacity by the end of 2022. With renewable energy, particularly solar energy, one of Prime Minister Narendra Modi’s pet projects, capacity addition has seen impressive growth during the years he has been at the helm, growing nearly four-fold in the last eight years and a bit.

Estimating the potential

However, the achievements need to be put in the frame of the existing potential, and how fast we are going to exploit that potential. The National Institute of Solar Energy has assessed the country’s solar potential of about 748 GW assuming around 3 per cent of wasteland area to be covered by solar PV modules.

Its sister body, the National Institute of Wind Energy, estimates a total wind energy potential of 302 GW at a hub height (where the centre of the wind turbine sits on top of the tower) of 100 metres above ground, which more than doubles to over 695 GW at a hub height of 120 metres.

In addition, India has a potential of 174 GW of offshore wind resources, according to an estimate by the Global Wind Energy Council, almost all of it concentrated off the Gujarat and Tamil Nadu coasts. Onshore wind is also highly concentrated in Tamil Nadu, Gujarat and Maharashtra. Against this, we have an installed onshore wind capacity of around 40.8 GW as of end-June 2022, while offshore has just got off the starting block with the government set to open the first lot of tenders for a total capacity of 4 GW later this year.

The trouble is, there is quite a distance to be covered between potential and actualisation. Some, like land, are actually beyond the power of the government to control, particularly in the absence of a land acquisition law.

The concentration of resource potential, for instance, has sent land costs soaring for power projects, particularly in wind energy, where most current and future projects are sited around the Kanyakumari-Tirunelveli-Tuticorin belt and down the Palghat pass on the Tamil Nadu side. This dense clustering has sent land prices soaring manifold, making it now the single biggest component of a wind energy project.

In solar too, the situation is little different. While the potential is calculated on the basis of using ‘waste’ land, terminology here doesn’t reflect the situation on the ground. What the government defines as ‘waste’ land is actually land which is not yielding it revenue, which is quite different from actual wasteland of little value to anyone and hence available at low cost.

The second big bottleneck is evacuation of the power generated. India’s renewable installations are densely clustered around a few substations in Tamil Nadu and Gujarat which are used to evacuate the power. Decades of under-investment in transmission and grid capacity have meant that several tenders have had to be actually cancelled because there is no grid capacity available.

The money problem

And then there is money, which is a two-part problem. One part is access to finance. Renewable projects are easily financed if clarity is available to lenders on how the power producers will be paid. So Centrally-backed projects with assured PPAs get financed while independent and State-level projects find it difficult to raise funding.

The second part of the money problem is payments. India’s chronically loss-making Discoms are notorious for payment delays. According to an estimate by CRISIL, average receivables of renewable power producers stood at 180 days as of March 2022, which is expected to reduce to 140 days by the end of the current fiscal, mainly due to rising central offtake.

This is the crux of the challenge facing the renewable sector in India. Despite shortcomings, it is the Centre which has done most of the heavy lifting when it comes to actualising RE potential. States are laggards. This needs to change. States like Tamil Nadu and Gujarat, which have high solar and wind potential, need to stop viewing renewable power merely as an augment to meeting their power demands.

Instead, they need to treat it as a natural resource — like coal or oil. They need to adopt a ‘merchant producer’ mindset where renewable power is seen as product and a revenue source. Investments in grid and transmission capacity, to wheel the power efficiently to where demand lies, can transform state economies, like they have done for Bhutan, which exports 70 per cent of the power it produces to India. Only then can India’s vast RE power potential be actually realised.

The writer is a senior journalist

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