Marching Towards 2030

Key developments of the past year and the way forward for the new decade

India’s renewable energy capacity has grown by leaps and bounds and crossed the massive 100 GW milestone this year. Roughly 6 GW of capacity has been added during April to September 2021 despite the devastating second wave of the covid-19 pandemic, with more capacity additions on the way. Further, the price of renewable energy has remained competitive and the supportive market dynamics have led to continued investments by both domestic as well as foreign investors.

Moreover, successful auctions have been conducted across not only standalone wind and solar segments, but other newer areas like round-the-clock power and solar equipment manufacturing. Enabling policy and regulatory measures have been taken by the government to promote inclusive growth in the sector through various interventions like the launch of a national hydrogen mission, the production linked incentive scheme for solar and battery manufacturing, the waiver on inter-state transmission charges extended till June 2025, permitting net metering for rooftop solar projects for up to 500 kW and others.

Thus, the year 2021 has been a landmark one for India’s clean energy transition for a key reason – the country’s renewable energy sector has finally moved beyond the singular focus on capacity additions and tariffs and has started gearing up for a more sustainable and streamlined growth in the next decade. In other words, the sector has matured over time and taken steps to ensure the development of the entire clean energy ecosystem which includes a diverse range of energy sources as well as industry stakeholders.

And now, more than ever, the focus of the global clean energy community is on India. With its ambitious targets, massive renewable energy park announcements and significant capacity additions, the country ranks third in EY’s recently released Renewable Energy Country Attractiveness Index. The importance of clean energy growth for India was highlighted in Prime Minister Narendra Modi’s recent address at COP26 in Glasgow, when he announced that not only the country will increase its non-fossil energy capacity to 500 GW by 2030 but meet 50 per cent of its energy requirements from renewable energy by 2030 and will achieve net zero emissions by 2070.

Thus, there are massive upcoming opportunities for all stakeholders in various segments as the country moves ahead to achieve its impressive clean energy targets by 2030. Apart from the significant potential in the domain of project development of large solar, wind, and solar-wind hybrid projects, there are other linked segments that have started gaining traction along with the overall growing clean energy ecosystem. Firstly, there has been a renewed focus on reducing imports of solar cells, modules, and batteries, and instead, manufacture them in India. There have been various interventions to scale up India’s local manufacturing capacity including import duties, production-linked incentive scheme, domestic content requirement in tenders, as well as the approved list of module manufacturers.

Moreover, grid integration of renewables and thereby the role of energy storage and round-the-clock power projects have come into prominence as they can help address the intermittency and balance the grid. With the growing traction for battery energy storage systems and demand for cleaner transport, EV charging and its potential for grid management is also gaining attention.

As the projects grow in scale and size, automation and digitalization for effective operations and maintenance (O&M) of renewable energy assets has become critical. With manpower contributing to a large part of O&M costs, efforts are being made to increase the integration of automation and digitalisation tools to save time and costs without impacting efficiencies. Thus, drones and robots are being used to manage daily maintenance activities while advance artificial intelligence enabled real time monitoring systems are being deployed for efficient fault prediction and performance enhancement.

As utility-scale projects majorly supply power to discoms and are bound by strict tender and tariff considerations, renewable energy projects specifically meant to service the energy requirements of commercial and industrial (C&I) consumers are becoming popular. Captive, group captive and open access models of power procurement have created economically feasible arrangements for corporates looking to green their operation strategies. Power trading which was mostly dominated by conventional power is now becoming popular for clean energy players, both buyers and sellers, with the introduction of specific green energy markets at exchanges.

Finally, the development and scale up of green hydrogen with its applications across transport, energy, and heat generation as well as energy storage and grid balancing, has become a key priority for the country. Even without any official policy mechanism in place, there is an ongoing race amongst India’s largest energy players to develop the largest green hydrogen facilities that can generate this versatile fuel at the most competitive prices. With the national hydrogen mission document ready to be launched soon, this momentum will surely continue.

Net, net with a willing base of industry players and investors, an enabling policy environment and a competitive market, India is strongly poised to emerge as the renewable energy leader of the new decade.

Renewable Watch is turning 11 years old in November 2021, and we are going to celebrate this important milestone with our biggest issue of the year. It will not only cover the key trends and major developments of 2021 across various clean energy segments but also focus on the aforementioned emerging opportunities for the new decade with insights from leading policymakers, developers, manufacturers, financiers as well as consultants.

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