The power sector is growing like never before to cater to the ever-increasing needs of a rapidly developing economy, with solar energy emerging as a pacesetter. Registering a phenomenal twentyfold growth in generation in just five years, the Indian solar industry has really risen to the occasion. In fact, it is poised to grow by leaps and bounds given the way so many developers are lining up one mega solar power project after another. Up against a tough target of 100 GW by 2022, India’s installed solar capacity recently reached the 10 GW milestone, an achievement that will serve as a stimulus for future capacity additions. This impressive growth notwithstanding, the industry continues to face challenges.
One of the biggest hurdles in the way of realising India’s solar potential is the lack of an efficient and reliable transmission and distribution (T&D) infrastructure that can handle the high level of solar power being injected into the grid. Solar in India would have everything going in its favour, had the transmission system development been in sync with the increase in generation. But the fact remains that our transmission lines have not been adequately upgraded to withstand this additional load of electricity. If ignored for long, this widening gap will put an immense pressure on the existing transmission lines, which may even lead to system collapse. The stakes in the solar sector are so high that we cannot afford to have any breakdowns. We need to constantly upgrade the grids and develop new ones to match the outflows created by new solar projects, just as Andhra Pradesh is doing. As and when the Andhra Pradesh government formulates a plan for a new solar project, it has a parallel plan going on T&D. Apart from encouraging private investment, the government needs to rope in utilities and enable them to acquire the financial bandwidth to invest heavily in grid infrastructure and make large-scale green electricity purchases.
Upgrading T&D lines has assumed utmost importance. The way the solar power segment is growing, all states need to upgrade their T&D system, in accordance with the increase in installed capacity. If they fail to do so, they could find themselves in a difficult situation like Punjab. Cashing in on the solar overdrive, Punjab is poised to achieve an installed solar capacity of 1 GW soon. However, the T&D network in the state has not been upgraded adequately to evacuate this additional electricity. Although the government has asked Power Grid Corporation of India Limited (Powergrid) to build separate transmission lines in the form of National Green Energy Corridors to evacuate renewable energy, the utility is likely to put up only interstate transmission lines, at least at the initial stages. Local governments will be required to invest in capacities within the states.
Owing to grossly deficient transmission capacities, we lose millions of kilowatt hours of electricity in interstate transmission congestion. High T&D losses can make solar power a highly unfavourable proposition. Although the government, in association with NTPC and Powergrid, is making efforts to upgrade existing substations and T&D lines to reduce T&D losses, these efforts need to be redoubled. We cannot afford to operate with this redundant network of transmission lines. We need to gradually upgrade our grid ring system from 440 kV to 765 kV, and then to 1,200 kV, so that electricity can be optimally transferred to the central ring and suitably distributed amongst the power-deficient areas of the country. The process of upgrade from 66 kV to 132 kV, 220 kV and 440 kV should take place simultaneously. We must ensure that each unit that we generate reaches its rightful destination. The entire exercise will prove to be a waste if we are not able to upgrade our grid infrastructure in parallel with the growth in solar generation capacity.
When it comes to providing grid connectivity to solar projects, the rooftop segment, which accounts for 40 GW of the 100 GW target for 2022, presents no problem as rooftop solar power is distributed smoothly on a well-defined network. It is the 60 GW ground-mounted solar power capacity that poses a major challenge as these projects will eventually be connected to the grid. In grid connectivity for solar projects, the one thing that we find lacking is the consistency of flow. Be it thermal, nuclear or hydel power, there is a certain consistency of electricity flow round the clock. In power plants using conventional sources of energy, the flow of electricity, the design and the T&D network are all planned as per the estimated outflows from these plants. Thermal power plants can easily burn more or less coal to generate power as per the demand. But this is not the case with solar. While the T&D infrastructure for solar power is designed to withstand peak loads, the inconsistency in flow at different times of the day leaves the potential grossly underutilised and makes power systems prone to breakdowns and volatile fluctuations. This issue may be bigger for large solar projects, leading to problems during peak usage periods.
Solar energy is intermittent. As a result, the same amount of power cannot be generated throughout the day. While solar power generation can falter on a cloudy day, on a bright and sunny day we can have more solar electricity than is actually needed. This disparity in the flow of power is one of the biggest challenges and calls for massive upgrades or even redesign of the grid infrastructure. Since solar energy cannot be stored at this point of time, how we manage the power generated at a specific point presents an equally stiff challenge. Moreover, there is the need to maintain grid stability when a large amount of intermittent solar power is injected into the grid. This problem can be overcome with modern technological breakthroughs such as smart grids and solar energy storage solutions.
The situation can become even more challenging when the share of renewable energy in total power generation goes up in due course of time, if the lack of constant flow of electricity is not addressed. While 10 per cent of solar power in the energy mix is a challenge, it is still manageable. Beyond that, the task becomes increasingly difficult. Since many large solar facilities are in remote locations such as deserts where grid infrastructure does not exist, we need to find a viable way to connect and store solar energy, as and when needed.
The lack of storage is a key challenge in the solar sector. There is a need to create batteries so that power can be stored and distributed 24×7 as per the requirement. There has to be consistency in the flow of power to the grid to keep volatile fluctuations to a manageable extent. With the integration of storage facilities, we will also be able to use solar energy at night and regulate its supply during the day. The US and some European countries are working on solar batteries to address the problem of storage. We may have a solution in a couple of years with research going on at a fast pace in these countries.
Bringing down the cost of solar power is another formidable challenge. Costs will go down if indigenous research and development (R&D) is encouraged, but India lacks in R&D. There is a need to invest enough money on R&D and create a mindset for research. Why can’t India develop its own technologies and export them to build a foreign reserve rather than depending on imports and foreign capital? Collaborative and outcome-based R&D can make India a world leader in photovoltaic technologies, but we also need closer industry-government collaboration for these technologies to achieve scale.
We also need to work on reducing the costs of modules and inverters, and enhancing their efficiency. Although production costs have declined on account of low cost capital requirements, technological innovations and falling prices of equipment, and inefficiency continue to be major hurdles faced by solar industry. While the best panels in the market can convert only up to 35 per cent of sunlight into energy, most modules have an efficiency rate of just 15 per cent. Several companies are working on making compact modules and inverters in order to increase efficiency.
Solar developers also need to guard against the tendency of depending too much on grants, especially if they are looking at commercially viable ventures. While the solar industry is supported by government incentives such as lower duties, tax concessions and guaranteed purchases by state utilities, these concessions can be withdrawn. Facing a severe fiscal deficit, the central government may not stick to its obligation to fund mega projects, leaving cash-starved state governments in no position to buy power from either the centre or private developers. Therefore, solar developers should do everything to make their businesses commercially sustainable without depending overly on grants.
State utilities, too, should take responsibility and rise to the occasion. The surge in the production of solar power should be matched with large-scale guaranteed purchases from state utilities despite the drain this costlier source of energy puts on their finances. In the long term, there is a need to undertake power reforms to transform state utilities into financially robust profit-making enterprises. On a positive note, the gap in the cost of conventional and renewable energy is gradually narrowing, thanks to technological breakthroughs and economies of scale.
In addition, fast-paced advancements pose a big challenge. Every two to three years, there is a new technology, which makes the old one obsolete. This is what big developers are doing to stay ahead of the competition. Blessed with abundant sunshine and vast tracts of non-cultivable land to run solar projects, India can virtually become a global solar superpower, provided there is a favourable business and policy environment in the country.