Timely Intervention

Karnataka introduces supportive renewable energy policies

Karnataka is one of the country’s top five renewable-rich states with a po­t­ential of approximately 155 GW, making it a favourable destination for re­new­able energy investments in India. The state has solar, wind, solar-wind hybrid, bioma­ss, cogeneration, waste-to-energy, small-hy­d­ro and other renewable energy resour­ces. It has the fourth highest install­ed rene­wable energy capacity in the co­un­try after Rajasthan, Gujarat and Tamil Nadu. Kar­nataka has a total installed renewable po­wer capacity of 15,653 GW (as of July 2022), of which approximately 7,679 MW comes from solar projects and 5,200 MW from wind projects. This makes up 80 per cent of its total renewable power capacity. The remaining is contributed by biopower (1,870 MW) and hydropower (980 MW).

Karnataka was an early mover in the In­di­an renewable energy landscape and has risen to prominence because of its effective policies, programmes and imp­le­me­n­tation. It had already overachieved its target of 6 GW of solar by 2021 and has an additional multi-GW of renewable ca­pacity in the pipeline to be completed by 2030. The Karnataka Renewable En­er­gy Policy 2022-2027 has also been envisi­oned by the Karnataka government to fur­­ther harness the state’s renewable en­ergy potential.

Policy overview

The Government of Karnataka announced the new Karnataka Renewable Energy Policy 2022-2027 in April 2022 in order to maintain the state’s position as a prefer­red investment destination in the renewable energy sector and to create an eco­system for sustainable and green energy development. Karnataka Renewable Energy Deve­lopment Limited is the state nodal agency for the implementation of this policy. The policy was created to as­sist the Indian go­vernment in attaining the renewable en­ergy target of 500 GW by 2030, and to promote new initiatives and emerging energy technologies in the state.

The state government introduced the Kar­nataka Renewable Energy Policy 2022-2027 with the target to build 10 GW of additional renewable energy projects in the state, including up to 1 GW of rooftop solar PV projects. This will help grow the st­a­te’s economy and encourage investment in the infrastructure sector. Further, the government aims to export power and meet the state’s renewable energy dema­nd. Another objective is to meet the Kerala Electricity Regulatory Commission’s rene­w­able purchase obligation by developing hybrid projects and renewable energy parks throughout the state. The state also intends to promote private sector involvement in the transmission network and gr­e­en energy corridor projects. It aims to build an ecosystem for distributed gene­ra­tion by solarising agricultural feeders and pumps, which do not require transmission and distribution infrastructure. The policy encourages the use of cleaner renewable energy in the transportation se­ctor in order to increase the uptake of el­ec­tric vehicles (EVs) and decarbonise transportation in the state.

In order to integrate more renewable energy into the grid, the state has set a goal of developing an energy storage market that provides grid support services such as peak reduction, curtailment management, contribution to reliability needs, transmission deferrals and intra-day and seasonal variation management. It is promoting the development of floating solar power, inclu­ding the integration of existing hydroelectric infrastructure. Finally, the policy supp­orts innovative initiatives such as biomass and waste-to-energy project development.

Recent developments

Various developments have been witnessed in Karnataka across different renewable energy verticals over the past few months.

  • In August 2022, Rays Power Infra anno­un­ced the opening of a 150 MW solar project (grid connected) in Raichur and Koppal, Karnataka. Reportedly, the project will produce about 240,000 MW of green energy annually. Prior to this, the Karnataka Cooperative Milk Producers’ Federation (KMF) requested bids for the establishment of 100 MW of solar power projects for KMF and its other member unions by deploying a group captive model.
  • In July 2022, TP Saurya Limited was aw­arded a letter of award by the Solar Energy Corporation of India (SECI) for the establishment of a 600 MW hybrid project comprising wind and solar power in Karnataka.
  • In June 2022, Karnataka established EV Jagruthi, an EV awareness portal that would help accelerate adoption and promote a cleaner transport sector in the southern state. The platform was built in a collaboration between the Kar­nataka government, NITI Aayog and the UK government. In the same month, Ayana Renewable Power Private Limi­ted announced its plan to expand Karnataka’s clean energy capacity. With an investment of approximately Rs 120 billion, the company has signed an ex­pression of interest with the Govern­me­nt of Karnataka to develop wind and solar power projects with a total capacity of 2 GW.
  • In April 2022, Azure Power issued an expression of interest to the Karnataka government to develop solar, wind and hybrid renewable energy projects with a combined capacity of 1,700 MW. A total investment of Rs 133 billion has been committed. Previously, JSW Renewable Energy Vijayanagar Limited comme­n­ced operations of a 225 MW solar po­wer plant at Vijayanagar, Karnataka.
  • In March 2022, the Karnataka state cabinet approved the proposal to execute the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan-B scheme in the state, which will provide solar-powered irrigation pump sets to about 10,000 farmers.
  • In December 2021, Ayana Renewable Po­wer Six awarded a contract to Siem­e­ns Gamesa to deliver turbines for a 302 MW wind farm project in Karnataka.
  • In October 2021, Emmvee signed an MoU with the Karnataka government to build a 3 GW cell and module production facility in the state. The estimated cost of the project is Rs 8.25 billion. The new so­lar production facility will be built in Dob­a­spet in Karnataka’s Bengaluru district.
  • In July 2021, SECI released a request for selection inviting bids for the development of 1,200 MW of interstate transmission system (ISTS)-connected solar projects in Karnataka under ISTS Tran­che X. In February 2022, Project Eight Rene­w­ab­le Power (Ayana Renewable Power) and SolarOne Energy (Fortum) were declared winners of SECI’s auction for 1,200 MW of ISTS-connected solar power plants for the Koppal and Gadag substations. The auction was held in two parts. In the first one, Ayana won 300 MW of capacity for the Koppal substati­on at a rate of Rs 2.36 per kWh. Fortum was successful in securing 300 MW of the available 400 MW at a rate of Rs 2.37 per kWh. In the second one, Ayana was awarded 300 MW of solar power for the Gadag substation at Rs 2.35 per kWh and Fortum obtained the remaining capacity of 300 MW for Rs 2.36 per kWh.

Outlook

Karnataka is one of the leading states in renewable energy with a high untapped potential. To tap this potential, the state needs to upgrade its transmission infrastructure and continue to introduce supportive policies to stay ahead in the ga­me. The Karnataka Renewable Energy Po­­li­­cy is, thus, a beneficial approach for the continued growth of the state’s re­ne­wable energy sector.

Overall, the state is poised to remain a top contender in the renewable energy race with its thrust on streamlined growth and timely policy interventions. 

By Anusshka Duggal

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