India recently crossed the 100 GW milestone for installed renewable energy capacity. This has been made possible through a progressive policy framework and enabling regulations at the central and state levels. However, the country still has a tall target to reach – 450 GW by 2030 – and challenges such as weak discom financials leading to the backing down of power, land acquisition delays, lack of coordination in transmission and generation planning, and the slow pace of rooftop solar additions are hampering progress. Industry experts share their views on the achievement of the milestone and suggest measures to reach the 2030 target…
What are your views on the achievement of 100 GW of renewable capacity? Is the country on track to achieve the goal of 450 GW by 2030? What are the key issues and how can they be resolved?
The 100 GW installed renewable energy generation capacity is certainly an important milestone in India’s journey towards accelerating its share of renewables in the power mix. Renewables now contribute 21.8 per cent of the total generation capacity (including captive) and 25 per cent (excluding captive power). In terms of actual electricity generation, of the total 147 billion units (BUs) in 2020-21, the share of renewables excluding large hydro was 10.6 per cent, and 22 per cent including the 159 BUs from large hydro. While we should be proud of the 100 GW achievement, it is also important to keep in mind the much larger target of 450 GW by 2030. Even before that long-term goal, India has the short-term goal of meeting 175 GW by December 2022. Apart from the 100 GW installed renewable energy capacity, roughly 50 GW is at various stages of implementation and another 30 GW is in the process of bidding and tendering. Thus, in spite of the drop in demand due to the pandemic, one can see the real possibility of over 175 GW coming online in the next few years, although meeting the December 2022 timeline looks uncertain. Some of the important action points to accelerate the move towards 450 GW renewable energy are as follows:
- States need to commit to high as well as long-term renewable energy targets and appropriately incorporate these in their renewable purchase obligations (RPOs). It is also high time to merge the solar and non-solar RPOs into one composite RPO.
- Universal coverage and aggressive implementation of the agricultural solar feeder programme by states. The power minister has already talked about the need to have 110 GW of solar for solarising all of Indian agriculture’s existing electricity needs. Low-cost distributed solar power generation will ensure reliable day-time electricity supply for agriculture while addressing some of the core issues such as improving financial viability of discoms by reducing cross subsidy and subsidy requirement and facilitating better grid integration of solar by shifting demand to day time.
- A storage purchase obligation that can comprise various existing and emerging cost-effective solutions that provide appropriate flexibility should be mandated by states. The government could consider providing VGF support for renewable energy (wind/ solar) projects that are coupled with battery systems and procured through a process of competitive bidding.
- A dynamic, longer-term and multi-stakeholder transmission planning process, that takes cognisance of the need for planning for a high renewable energy share in the future, is the need of the hour. This process should produce a 10-15 year perspective transmission plan, which can be revised on a three-year rolling period basis. This is especially important given the time lag in gestation periods of transmission and renewable energy generation projects.
- Renewable energy tendering frameworks should be based on “value” for the system rather than the lowest cost of generation. Long-term capacity expansion and production cost modelling-based simulations with different scenarios (wind/solar/storage locations, generation profile, voltage level and wind/ solar mix, etc.) can underline the value of these renewables/storage in the system. This can inform and lead to a more structured and rigorous renewable energy procurement and transmission planning approach.
- States should proactively work towards establishing renewable energy parks with appropriate infrastructure support. This would not only help in de-risking and speeding up project development, but would also be beneficial for sound transmission planning. Simultaneously, states should bring in an inclusive and equitable land leasing policy to ensure long-term payments to land owners.
Achieving 100 GW of renewable energy capacity is certainly a remarkable achievement and a key milestone for India. Despite the Covid-19 pandemic, the country has added more than 14 GW of renewable energy capacity in the past 18 months, with solar contributing about 80 per cent to this capacity addition. India now ranks fourth in terms of overall installed renewable energy capacity, which accounts for almost 25 per cent of the installed power capacity. In terms of electricity supply, 10 per cent of generation now comes from renewable energy sources.
While India has made considerable progress in renewables capacity addition, it still needs to achieve a lot. The capacity, as it stands today, is reasonably high for both solar and wind sources. There is a need to promote other renewable energy sources as well for the diversification of electricity to address the intermittency in their nature.
Currently, we are fourth in terms of installed wind capacity. However, the past three years have witnessed lacklustre growth in the sector. Similarly, the solar rooftop segment has seen only a fraction of potential being tapped, despite offering a lucrative proposition to commercial and industrial consumers. We also have a sizable amount of biomass surplus available, which can find its application in power generation, offsetting a part of coal-based thermal generation.
We are emerging as a global powerhouse of renewable energy, especially in solar. This can be attributed to a conducive policy and regulatory framework, facilitating mechanisms, and a visibly healthy pool of investors coupled with economies of scale, which have considerably reduced the landed tariffs. In addition, the sector is witnessing healthy competition between public and private entities in recent auctions, which has established renewable energy as the most cost-effective future source of energy.
Looking at the renewable energy growth trajectory, the confidence shown by stakeholders and the country’s immense renewable energy potential, we are certainly positive that the country can achieve 450 GW target by 2030. The country plans to add only renewable energy capacity in the near future and phase out conventional capacity, which will expand the renewable energy base further.
India has a coast line of about 7,600 km, which offers immense potential to implement offshore wind projects; however, the first pilot project is yet to see the light of day. There is a need to provide technological, infrastructural and financial support to help this segment grow. Meanwhile, distributed renewable energy, in the form of solar pumping and solar rooftop projects, holds considerable potential not only in urban areas, but also in semi-urban and rural areas. Renewable energy integration at the substation/distribution transformer levels is needed for improved demand management. These areas remain largely untapped.
The achievement of this target would require coordinated efforts between the centre and the states through proper planning, effective implementation of policies, enabling programmes, and supporting infrastructure. Newer technologies such as green hydrogen and electric vehicles are also expected to boost electricity demand with potential for deployment in allied sectors such as fertilisers and transportation. A clear roadmap can provide visibility to stakeholders and help gather their interest in further capacity addition.
The journey towards 450 GW will not be easy as there are some hurdles that have affected the journey so far. Land has been one of the key concerns. The initial set of sites were actively identified and utilised. Therefore, land needs to be identified and clearly outlined for renewable energy projects with a faster handover process to avoid time and cost over-runs.
With the increase in the renewable energy portfolio, the concerns around intermittency will also increase. This requires the promotion of storage/hybrid projects to improve the availability of supply and give a push towards round-the-clock supply from renewable energy sources. Transmission infrastructure also requires investments to improve grid balancing and management. Another important link in the value chain is the confidence of investors, which needs to be maintained through favourable policies and a long-term facilitating framework with exemptions, rebates, relaxations, etc.
The open access framework needs to be simplified to allow consumers to opt for the mechanism. The net metering mechanism needs to be promoted further to turn consumers into prosumers of electricity. Further, financing needs to be facilitated through reduced cost of debt, and newer options such as crowdfunding may be explored to help ease access to finance.
The power trade also requires overhaul through improved mechanisms in the form of derivatives, a robust short-term market, strengthening of the exchange mechanism, and introduction of newer products on the exchange.
While the country plans to implement a cumulative capacity of 450 GW by 2030, there is a need to make the country self-sufficient through domestic manufacturing to ensure self-sufficiency, contribute to the country’s GDP and make India a global manufacturing hub. The Aatmanirbhar Bharat Abhiyan is a constructive step towards self-reliance in sectors such as renewable energy, which benefits not only electricity generation but also the allied sectors of metal, supply chain, transportation, etc.
India has recently reached the 100 GW milestone in renewable energy capacity installations, which account for nearly 26 per cent of India’s total installed generation capacity of 383 GW, excluding large hydroelectric projects. We at Suzlon have contributed to this achievement in our own way as the largest OEM (around 13 GW) to support this milestone.
The target of 450 GW renewable capacity by 2030, although ambitious, is very doable with strategic, transparent and stable policies from the central and state governments. The next 10-odd years would require 30-35 GW of renewable energy installations every year. I see three main stakeholders in this scenario – large IPP players, the captive and MSME sector and PSUs. It is necessary that policies and guidelines be in place to empower all three to participate in the development of the renewable energy sector.
The deceleration of wind projects in the past few years has been mainly due to several factors related to bidding, implementation and power sector issues. None of these issues are unsurmountable. Given the vision and dedication of the Government of India, I am very confident that we will continue to see a slew of policy reforms for renewables, especially wind energy in the near future. I am hopeful that these policies will focus on relooking at the bidding guidelines, empowering renewabes-based captive power for MSME growth, ease of open access, and ISTS waiver for RPO obligated entities, among other things.
The future of renewables at the expected scale will require a smooth and accelerated transition to wind-solar hybrid renewable energy parks. In line with our mission for Aatmanirbhar Bharat, policies to encourage component manufacturing for all renewable sources and a uniform GST rate across the value chain could be game changers.
Despite lower per capita emissions, which are one-third of the world average, India has set high renewable energy targets for itself, leading the way and setting an example for the world to follow. The 100 GW capacity is an impressive milestone and we need to celebrate it as a nation. However, for all of us in the renewables industry, this is a foundation and an inspiration to relentlessly continue our efforts towards bigger milestones. The journey is long and the task is daunting, but we are motivated and committed to making India’s renewable energy dreams come true for our future generations.
Rajiv Ranjan Mishra
Congratulations to the country on crossing 100 GW of renewable energy capacity. This certifies the country’s position as one of the leaders in energy transition in the world. This is also a testament to the power of big ambitions and ideas, laid down under the leadership of the prime minister and this government. Barely 10 years ago, achieving 100 GW of renewable energy installed capacity appeared fanciful!
The Indian power sector is one of the most diversified in the world. The rapidly rising demand for electricity in the country, with a serious thrust on renewables and other initiatives, is expected to increase further in the years to come. The sector is undergoing a sea change that is redefining the industry outlook. The central government’s focus on providing “power for all” has accelerated the efforts to ramp up the power generation capacity in the country, largely through renewables, and is targeted to reach 175 GW by 2022 and 450 GW by 2030. The sustained growth in renewables has been enabled through progressive central- and state-level policies. The major push to utility-scale renewable energy addition was given by the adoption of competitive bidding, which encouraged developers to consistently reduce their costs and increase efficiencies, resulting in the discovery of lower solar, wind and hybrid tariffs. This has also benefited discoms, which have been able to procure renewable energy with distinct cost advantages vis-à-vis conventional generation.
While many enabling policies have been introduced to remove bottlenecks, some problems that still need to be addressed are improving the financial health of discoms, land acquisition-related issues, ensuring better financing terms, enhancing local manufacturing capabilities, coordination in transmission and generation development, and grid balancing. We believe that the Electricity (Amendment) Bill, 2020 is a step in the right direction as it will transform the power sector in some very important ways. One of the main aims of the bill is to promote renewable energy, delicense power distribution and increase competition, thereby unleashing next-generation power sector reforms in India. This is a path-breaking decision that has the potential not only to empower customers but also bring huge investments into the sector and accelerate technology adoption. The reforms will especially make renewable energy generation, transmission, and distribution financially attractive to investors.
In his address to the nation on the occasion of India’s 75th Independence Day, the prime minister mentioned that we have crossed the milestone of 100 GW of installed renewable energy capacity. Out of 100 GW, 40 GW is accounted for by wind power, 44 GW by solar, and the rest by small-hydro, waste-to-energy and biomass projects. The government had initially set a target of 175 GW of renewable energy by 2022, which was later increased to 450 GW by 2030. According to the Ministry of New and Renewable Energy, India ranks fifth globally in terms of overall installed renewable energy capacity. We also have the world’s largest renewable energy expansion programme.
India is very close to achieving its target of 175 GW renewable energy by 2022 as 50 GW is under installation and 27 GW is under tendering. This achievement is, indeed, a landmark in India’s renewable energy portfolio, but it is still far from the target of 450 GW, which needs to be attained in just a few years from now. The government has done exemplary work in terms of promoting and installing centralised large-scale renewable energy projects through various measures – 100 per cent foreign direct investment, fiscal incentives, faster and easier clearance processes, and the introduction of renewable obligations, etc. However, rooftop photovoltaic (RTPV) has remained largely untapped, with an installed capacity of just 5 GW. India has only 15-16 months left to achieve the RTPV target of 40 GW, which seems improbable at the current pace. The sluggish growth in RTPV is mainly owing to high costs, lack of consumer awareness and an unfavourable policy regime. The country will definitely attain its 175 GW target within the stipulated time, but with a minimum share of decentralised RTPV projects. The central and state governments could have done a lot more in promoting RTPV through a favourable policy framework and robust strategies.
India’s journey towards 450 GW by 2030 needs to be supported by a rapid scaling up of renewable energy capacity addition through innovative strategies and business models. As electricity is a concurrent subject, an alignment of state and central policies is important for far-reaching changes at the ground level. The limit on net metering for RTPV projects, which has been changed from 10 kW to 500 kW, is one such example. While the Ministry of Power has acted on it, many states are yet to announce this change. Therefore, the government needs to strongly focus on developing uniform, long term, and favourable renewable energy policies. Ideally, such policies should offer a win-win scenario for all the key stakeholders, such as project developers, consumers, utilities and financers.
Apart from policy development, scientists and experts across the country should take a keen interest in technology innovations for large-scale project implementation. For instance, aerial survey of cities using drones can tremendously help in identifying suitable buildings, land parcels and waterbodies for various renewable energy technologies. An exercise to evaluate RTPV potential using light detection and ranging (LiDAR) has already been carried out in Bengaluru and is currently being undertaken in some cities in Madhya Pradesh using drones. With crucial information obtained in this manner, the government can aggregate the overall demand to install renewable energy technologies such as ground-mounted solar, RTPV, building-integrated PV, agro PV, floating PV, wind, hydro and biomass. Following demand aggregation, the government can call for large-scale tenders to implement renewable energy, thereby reducing the cost of such installations significantly.
Although wind and solar energy are renewable, the energy thus produced is intermittent in nature. Here, energy storage technologies can become incredibly important. Globally, the cost of storage technologies is declining significantly and is anticipated to fall further. India has already started deploying storage technologies and needs to go in for a rapid expansion in order to decarbonise India’s energy sector. Considering the aforementioned technology innovation and policy development aspects, renewable energy has a bright future in India, with the country well on course to meeting the target of 450 GW by 2030.