The adoption of renewable power in India has observed exceptional and blazing development so far and is at a vital juncture now. Ensuring the financial viability of future projects and addressing policy discomfort points will be essential to sustaining this momentum. India runs the biggest clean power programme in the planet and aims to reach 175 GW of renewable power capacity by 2022 in line with its commitments to mitigating the effects of climate adjust.
The nation has an even more ambitious strategy to reach 60% of its installed electrical energy generation capacity from clean power sources by 2030, with a target of reaching 450GW of installed renewable power generation capacity. As of the second quarter of FY 2021-21, India has accomplished roughly half of its 2022 target for the addition of new renewable power generation capacity. According to UK-primarily based analytics firm British Business Energy, India has been ranked third on its renewable power investments and plans, and as the world’s fifth-biggest power economy by income. This trailblazing development trajectory has come with a couple of challenges of its personal, even though.
India now has amongst the least expensive solar energy tariffs in the planet, as observed in current project auctions by the SECI. What began with higher double-digits, is now touching record low levels. India’s minister for MNRE has indicated that tariffs could fall additional. In reality, the winning bids at the auctions by Gujarat Urja Vikas Nigam Ltd (GUVNL) for 500MW of solar projects in December 2020 stood at Rs 1.99/unit. This was a shade beneath the preceding lowest tariff bids at the final SECI auction performed in November 2020 exactly where the two combined winning bids for 600MW of solar energy came at Rs 2 per unit. This raises pertinent queries about the lengthy-term viability of such projects more than the lengthy term.
The plummeting tariff bids have had but one more fallout, on the funding side. Debt financing for clean power projects has observed a drop as lots of major banks have expressed concern about the viability of renewable power projects that have committed to tariffs of much less than Rs 3 per unit and are for that reason reluctant to lend to these developers.
For India’s renewable power story to hold powering ahead, a host of problems will have to be addressed, each at the policy level and via technologies-primarily based interventions that hold in thoughts the special nature of renewable power sources.
Seeking options
While renewable power is observed as the great answer to the world’s increasing power demand and environmental degradation woes, it poses a complete new set of challenges of its personal. Foremost amongst these are the elements of integrating renewable power into the grid and making certain round the clock (RTC) energy. One remedy that has emerged is the hybrid power model, which can be the way forward for India to meet its de-carbonisation targets and to bring down the expense of energy.
Hybrid power systems (HES) can aid integrate renewable energy into the grid by overcoming intermittency and generating it trustworthy and dispatchable when combined with utility-scale battery storage. Coupled with battery storage, HES options have gained tremendous traction in current years due to these inherent rewards. In establishing economies such as India, hybrid power systems can aid ramp up electrification of rural and remote places due to their reduce expenses and faster installation, compared to developing substantial transmission lines from the standard centralised energy plants.
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Storage has been confirmed to be a critical but underleveraged piece in the development of renewable power about the planet, and India is no exception. More robust enforcement of the renewable obtain obligation (RPO) mechanism in reaching RTC energy will provide the considerably-necessary push for storage systems to develop in the nation. A continued fall in battery rates will additional encourage investments in power storage systems, though more massive-scale deployment could, in turn, push down battery storage rates as nicely.
By some estimates, rates of lithium-ion cells that go into battery storage systems could fall by as considerably as 46% involving now and 2029. This is anticipated to lead to larger adoption of battery-primarily based power storage. According to investigation and consultancy firm Wood Mackenzie, the worldwide power storage marketplace is poised to develop 13-fold to 230 GW by 2025. The report also estimates the total power storage investment to jump from $18 billion in 2019 to $one hundred billion by 2025.
With RTC renewable power becoming the norm in India, we will probably see more front-of-the-meter deployment of power storage options. Technology will also play a large function, as legacy systems can’t cope with the new demands of a dynamic and complicated network of power sources. Smart grid systems will serve as critical assistance in this transition, lending a more steady and efficient integration of renewables.
Another improvement that will spur additional investments in renewables is the regulatory approval for a renewable power trading mechanism. Leading energy bourses Indian Energy Exchange (IEX) and Power Exchange of India have been permitted by the Central Electricity Regulatory Commission (CERC) to begin the green term-ahead marketplace (G-TAM).
This move should really aid make renewable power reasonably priced to buyers though supporting discoms in fulfilling their renewable obtain obligations (RPO) and permitting renewable power producers to sell excess energy like in the genuine-time electrical energy marketplace (RTM).
Global inspiration
Growing the share of renewable power in India’s total power mix will demand further policy oversight and making certain that the interests of all stakeholders involved – developers, buyers, discoms lenders, and the government – are viewed as and protected.
There are sufficient indicators that the nation is firmly on this path. More not too long ago, Indian policymaking has been moving towards a more integrated renewable power roadmap that incorporates solar, wind, and hydropower, coupled with battery power storage.
There are lessons right here from the US state of California, which has taken an unprecedented lead in the adoption of renewable power. The ‘sunshine’ state has been a forerunner in mitigating the intermittent nature of renewable power via massive scale battery storage installations, towards integration with the grid. This, of course, has been spurred by an estimated 70% drop in lithium-ion storage battery rates in the US involving 2015 and 2018. The state is hosting the developing of the world’s biggest battery power storage program at the Moss Landing substation, due to be completely operational by mid-2021.
California can serve as a model for some of the Indian states – notably Gujarat, Rajasthan, Maharashtra, Tamil Nadu, and Andhra Pradesh. With the abundant availability of solar or wind sources, these states have the prospective to turn into RE hubs in the nation.
The laying of the foundation for a hybrid renewable power park of 30GW capacity in Gujarat’s Kutch district by the honourable PM, reportedly the world’s biggest such model when prepared, could pave the way for a additional push in this path. It is in line with the government’s ultra-mega renewable power energy parks (UMREPP) policy, which started with Gujarat and Rajasthan and more not too long ago joined by Uttar Pradesh. These parks can also aid address the core problems of land availability and transmission interconnectivity.
Finally, India’s path to self-reliance via the Atmanirbhar Bharat route can be greatest realised by fostering innovation and R&D in the renewables space. This is significant to bring down dependence on imports of solar panels, battery modules, and other elements in a important and relevant manner. Domestic producers will require to urgently invest in cutting edge and revolutionary technologies that could show new and more effective options for the rest of the planet. It is a approach that will require appropriate regulatory assistance in offering a appropriate ecosystem for such investments. The construct-up of tangible business enterprise prospective which supports such manufacturing volume will also take time ahead of benefits are observed, but all stakeholders require to take their initial methods. This is a strategic crucial to position India as a worldwide hub in renewable power.
Deepak Thakur, CEO, Hybrid & Energy Storage, Sterling and Wilson Pvt Ltd. Views expressed are the author’s personal.