To scale up, diversify and accelerate is the need of the hour

Energy transition in the country is at an inflection point. While India has made significant strides with 40 per cent of power coming from renewable energy and hydel power, it needs to scale up generation and diversify into new green energy sources.

In FY 2023, of the 17 giga watts (GW) added, 92 per cent came from renewable energy. In fact, the solar and wind capacity installations have increased six-fold in the last decade. The cost of electricity generation from solar and wind sources is now lower than the cost of electricity from fossil sources. Despite this, experts believe the pace of implementation of green power projects has to be accelerated to meet climate mitigation targets.

Indeed, reaching the 2030 goal of 500 GW of non-fossil-based generation capacity would require India to add about 40 GW of renewable energy capacity annually. That means a significant jump from the current 15-16 GW of annual addition.

The future challenge is enormous. Explains Neeraj Kuldeep, Senior Programme Lead, Council on Energy, Environment and Water (CEEW): “CEEW’s analysis suggests a capacity requirement of 7,500 GW of cumulative solar and wind capacity for 2070 net-zero goals. This also reflects India’s growing electricity demand. Achieving such a mammoth target will be an uphill task and would require greater buy-in from States and discoms towards RE, creating markets for diverse RE technologies beyond solar and wind to realise untapped renewable energy potential.”

As of March 2023, the country’s total installed capacity was estimated at 416 GW, of which 124.2 GW (30 per cent) was renewable energy and 47 GW (11.3 per cent) came from hydel power. Further, according to the Ministry of New and Renewable Energy, another 82.6 GW of RE is under various stages of implementation.

India is also promoting energy storage and pumped storage. The revised Renewable Purchase Obligations include Hydro Purchase Obligations and Storage Obligations. A Central Electric Authority (CEA) study considers 19 GW of pumped storage and 41 GW of energy storage by 2030 necessary to support RE integration. Further, the Solar Energy Corporation of India is conducting tenders to set up battery storage systems and round-the-clock power plants.

Challenges

A hurdle before different storage options is the high upfront cost of investment which limits the economic attractiveness of the investment. The lack of domestic manufacturing facilities and R&D in advanced battery chemistries and long-duration storage are problematic, too. In case of pumped storage, the availability of suitable sites, delays in land acquisition and various environmental clearances have kept investors away.

According to a CEEW study, $200 billion is required to achieve the 450 GW target (old target) by 2030. Traditionally, the banking system has been the mainstay when it comes to the financing of RE projects. But there is a need to tap other finance options.

The government recently announced the bidding trajectory, which calls for auctions of 50 GW of RE annually over the next five years. There will be several challenges in translating this on ground, which include development of evacuation and transmission infrastructure and land availability for projects. Apart from the government’s interventions such as solar park policy and national wind-solar hybrid policy, a few other measures, such as floating solar projects and offshore wind projects, are being explored to deal with land availability issues.

“India is in a situation where significant infrastructure has to be built. Considering the economic, technical and geopolitical situation, India is likely to be dependent on coal for some more time. Therefore, the energy transition needs to be handled carefully,” says Sandhya Sundararagavan, Lead, Energy Program, World Resources Institute (WRI), India.

According to her, grid strengthening, regulatory steps on the distribution side such as time-of-day tariffs and more market participation will be needed to push for seamless absorption of the electricity generated from new technologies.

Storage forms are essential flexible resources for making renewables firmer and more reliable. For green hydrogen, there is a need for incentives and mandates to drive consumption, especially in the industry sector. Some hard-to-abate sectors require round the clock availability of RE for constant stream of green hydrogen. For pumped storage, long gestation periods are a challenge. It is also important to ensure that there are minimal social and environmental implications of these projects.

Notes Sundararagavan: “The quantum and the pace of additional renewable installations required to meet the 2030 targets are significant. It is important to complement efforts at the national level with State priorities and vice versa for driving the energy transition. In addition, we also need to tap into new technologies like offshore wind, repower older wind turbines and accelerate deployment of rooftop solar.”

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