India has experienced tremendous growth in its renewable sector in the past decade, largely driven by enabling policy and regulatory support, and a cost-competitive market. However, in the last two years, the sector experienced market slowdowns and dwindling investor sentiment, which have been amplified now by the Covid-19 pandemic. The government has taken encouraging steps to address many of these issues and is optimistic about achieving – and surpassing – its renewable energy targets in the short and long term. Against this backdrop, Raj Kumar Singh, minister of state (independent charge) for power and new and renewable energy, spoke about India’s renewable energy plans and prospects for the near future at the third global RE-Invest. Key highlights from his speech…
India’s leadership in the field of renewable energy has garnered appreciation from countries across the globe. The determination displayed by all the states in India to adopt renewables has helped the country achieve this remarkable growth. It is great to see that almost all states have incentives in place for renewables. At present, the country has about 148 GW of installed renewable energy capacity and another 57 GW is under installation. If these capacities are added up, they form 52 per cent of the energy mix.
What has made this journey interesting is the innovations that have made renewable energy growth possible. We innovated with floating solar and found that it is more efficient than ground-mounted solar. Then, we innovated with hybrid and peaking power. Further, we innovated with round-the-clock renewable energy by adding storage in the form of batteries or pumped hydro. These innovations are what make this sector exciting. On top of this, prices have been falling, which has made renewable energy more and more affordable. The increasing efficiencies of solar and wind power systems are bringing prices down. Now you have wind turbines of 4-5 MW each, as well as solar photovoltaic efficiencies in the range of 22-23 per cent. The dip in prices is democratising access to energy across the world. Consumers are becoming producers, thus reiterating the democratisation of energy. This is also enabling our people to improve their standard of living. As energy prices fall, people are increasingly able to afford television sets, refrigerators and other electronic appliances. This trend will only increase and add to energy demand. We will hence need to add more power capacity. As of October 2020, our energy consumption went up by 12 per cent, and this is only a pointer. All the new power capacity will be renewable energy based, which we are very clear about.
India will continue to grow rapidly, and at a faster pace than it has so far. Our total renewable capacity has gone up threefold in the past four years. Further, our solar capacity has increased by 13 times in the same period. We expect capacity to keep increasing with rising demand. At the same time, we are innovating with storage. By and large, the philosophy that we have in mind is that if we add larger volumes of storage, prices will come down. We have seen this trend in LEDs, solar and wind – when we increase scale and size, prices fall. We are experimenting with that in storage as well. We have set up a group that will work out the best strategy for storage. Our next challenge is finding out whether storage should be linked to individual generating units or be at the level of the grid itself.
Our next frontier is replacing imported ammonia with green ammonia, which will be produced using green energy. If we have energy available at Rs 2 per unit, then the ammonia we produce will be competitive with imported ammonia. Thus, our next move will be to eliminate imports of ammonia.
Following that, we will be working out the requirements of green hydrogen in the steel industry. We will discuss how we can produce hydrogen using solar energy at competitive prices. We will also see how we can increase the calorific value of natural gas, which is piped around the country, by adding hydrogen. We can consider blending it with ethanol or green hydrogen. Again, we wish to bring in economies of scale in the green hydrogen space, as we believe this will drive down prices. Going forward, we see green hydrogen powering the long distance transport sector, particularly truck and bus transport across states.
“Our endeavour to reduce our carbon footprint has been successful, and we are way beyond the commitments we had made at COP-21 as far as energy transition and efficiency are concerned.”
For the government, the environment is a matter of key interest, which is why the prime minister has set a target of 450 GW of renewable energy by 2030. India has not only kept to the targets it set for itself, it is ahead of them. We also have two or three other visions to realise. One, of course, is the One Sun, One World, One Grid plan. We are already working on a feasibility study and we will get into negotiations with different countries so as to start this initiative in several places. Africa has taken the lead in this by setting up a unified grid. Similarly, we can set up interregional grids, which can be combined to form one grid running across the world from east to west in the future. This is going to make the cost of electricity cheaper and more competitive. This may not eliminate the requirement for storage, but it will certainly reduce it. When the sun sets here, it would have risen somewhere else, so you do not need to store energy.
Moreover, the World Solar Bank is going to make finances available to nations where access to funding is difficult. We do not have a problem with finance as our credit ratings are high, because of which we have been able to attract investments in renewable energy to a satisfactory extent. These investments will only go up in the future. In fact, most the venture funds in the world have invested in India’s renewable energy market, and all the major companies in the world are competing to set up projects here. But in countries where getting investments may be a challenge because of modest credit ratings, the World Solar Bank will be essential. In fact, the countries that we have spoken to are very supportive of this plan, and I believe that it will become a reality soon.
“This journey is not ours alone. There is a universal commitment to reducing the carbon footprint. There is also a universal partnership; every country is making efforts to decarbonise.”
Our endeavour to reduce our carbon footprint has been successful, and we are way beyond the commitments we had made at COP21 as far as energy transition and efficiency are concerned. Apart from the fact that we are adding renewables at a faster pace than we had imagined, energy efficiency has been a major area of success for us. The LED programme is an example of this; we replaced 11 billion street lights with LED systems, and the remaining 100,000-odd will be carried out at the earliest.
We aim to decarbonise agriculture by replacing all agricultural pumps with solar pumps, which will add 160 MW of solar energy and reduce the costs of irrigation while making solar energy available to the farmer during the daytime at a negligible cost. The only costs will be towards the installation of solar generating stations, and these can be paid off in about four and a half to five years just by using the subsidy that states give for these projects. After this period, the outflow account of subsidy for state governments will come down to zero.
Rooftop systems are also going to become ubiquitous. We have come out with a revamped rooftop scheme, a solar city scheme, and many other programmes. Many more are yet to come up. Offshore wind is another programme that is being worked on. We will set up a group to work it out, because we believe that offshore wind has a very bright future and we need to start investing in it right now. We are also planning to develop significant solar capacity in Ladakh, for which land has been identified and the transmission survey is going on. We will hopefully be able to tender out both these projects in a short span of about six months.
The exciting part of our country’s energy transition is that everyone has realised and accepted the benefits of renewable energy. We will continue to grow at an even faster pace than at present. This journey is not ours alone; if that were so, we would not have made an impact. What we are happy to see is that there is a universal commitment to reducing the carbon footprint. There is also a universal partnership; every country is making efforts to decarbonise and is shutting down coal plants. Some are quicker than others, but every country has adopted and realised the importance of this. If we want to save our planet, all of us have to work together, and I am happy to see that this is one endeavour in which the whole world is one.