Green Focus: Gujarat looks to expand into emerging renewable energy areas

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Gujarat has been one of India’s first-mover states in the renewable energy sector. Recently, it became the fourth state to achieve its 2022 renewable energy target after Rajasthan, Telangana and Kar­na­taka. Gujarat’s rooftop solar segment is booming, growing from 0.085 GW in 2019 to 1.2 GW as of March 2022. The state is ho­me to the second-largest solar power ca­pacity in the country after Rajasth­an. Ov­e­rall, it constitutes roughly 15 per cent of India’s renewable energy portfolio. As of December 2022, the state had 18.5 GW of total installed renewable energy ca­pa­city, comprising around 8 GW of wind po­wer, 8 GW of solar power, and a small ca­pacity of biomass and small-hydro power.

Currently, the majority of green power in the state comes from wind and solar energy. However, the state is actively expanding its renewable energy portfolio by venturing into emerging sectors such as green hy­dro­gen. As per a recent statement by Pri­me Minister Narendra Modi, Gujarat aims to become the world’s lar­gest hydrogen hub. The state will attract investments wor­th Rs 8 trillion-Rs 10 trillion from the world over. Moreover, the state is endowed with a vast coastline, creating significant opportunity for offshore energy development in the near future.

Renewable Watch takes a look at the recent developments in the state’s renewable energy sector, the challenges and the way forward…

Recent developments

Over the past one year, Gujarat has witnessed significant developments in the renewable energy sector, marked by the initiation and conclusion of key deals, investments and projects.

December 2022: The ACME Group forayed into the wind power business and sig­ned a power purchase agreement with Gu­jarat Urja Vikas Nigam Limited (GUVNL) for an initial 50 MW wind power project.

November 2022: Adani New Industries Limited reported the installation of India’s largest wind turbine generator in Mundra, Gujarat. The wind turbine is 200 metres tall and can generate about 5.2 MW of el­ectricity. It can be used to power ap­p­roximately 4,000 homes.

September 2022: Sterlite Power’s Mumbai Urja Marg Transmission completed the construction of a 400 kV transmission line in the regions of Banaskantha, Kansari and Vadavi. The high voltage transmission line will be responsible for transferr­ing approximately 1,000 MW of renewable energy from the pooling station in Bhuj, Gujarat, to the national grid.

August 2022: NTPC Limited announced the commissioning of its 56 MW Kawas solar project in Gujarat. In the same month, Inox Wind also secured an order from NTPC Renewable Energy Limited, a wholly owned subsidiary of NTPC Limited, for setting up a 200 MW wind power project at the Dayapar site in Kutch district.

In another development, Larsen & Tou­b­ro (L&T) inaugurated a green hydrogen plant at its AM Naik heavy engineering complex at Hazira, Gujarat. The plant will be responsible for generating 45 kg of green hydrogen daily for captive consumption in the company’s manufacturing complex.

June 2022: General Electric (GE), a US-based multinational conglomerate, and Continuum Green Energy (India), a rene­wable energy project developer, announc­ed the financial completion of GE Energy Financial Services’ acquisition of a 49 per cent stake in Continuum’s 148.5 MW Mo­r­jar onshore wind project in Gujarat. The Morjar wind farm will supply power to almost 125,000 homes.

May 2022: Tata Power Renewable Energy commissioned a 120 MW solar project in Masenka, Gujarat. The project is expected to produce 305,247 MWh of power an­nually for GUVNL.

April 2022: Tata Power Renewable Energy Limited, a Tata Power wholly owned subsidiary, commissioned a 300 MW project in Dholera, Gujarat. According to the company, it is the largest single-axis solar tracker system in India and the project will generate 774 MUs of electricity. It will also lower carbon emissions by roughly 704,340 million tonnes per year.

December 2021: Honda Motorcycle & Scooter In­dia announced the commissioning of its second wind turbine system in Bhanvad, Gujarat, enabling the corporation to meet more than half of its energy needs from hy­brid renewable resources across all fo­ur of its production units.

Promoting manufacturing

The state is also increasingly attracting in­vestments for the manufacturing sector due to its conducive policy environment and locational advantage in terms of its pro­ximity to ports. In December 2022, Gr­eenzo Energy India Limited announced an investment of $50 million in the San­and-II Industrial Estate, a part of the Gujarat In­d­ustrial Development Corpora­tion (GIDC), to build a plant for manufacturing electrolysers. The Real Time Accelerator Fund has co­mmitted to investing $1 million in the company. Suzuki is also planning to invest approximately Rs 73 billion in the Hansal­pur EV battery plant in Gu­jarat where the company intends to produce advanced chemistry cell batteries for EVs.

In September 2022, Gujarat-based Goldi Solar announced plans to invest Rs 50 billion by 2025 to expand its module manufacturing capacity to 6 GW from the existing 2.5 GW. Solex, which operates a PV manufacturing unit in Tadkeshwar near Surat, has set a target to expand its existing 750 MW capacity to 2 GW by June 2023. Following this, the capacity may be ex­panded by another 2 GW by the end of 2024. The Adani Group has also stated pl­a­ns to boost its solar PV cell and module manufacturing capability to 10 GW per ye­ar by 2025. Further, ReNew Power is investing Rs 20 billion to set up solar cell and module manufacturing units in Gujarat and Rajasthan. A solar cell and module manufacturing unit with an annual capacity of 2 GW is being set up in Gujarat.

In July 2022, Triton Electric Vehicle, based in New Jersey, announced plans to manu­facture electric cars in India. The company will also produce hydrogen-powered two- and three-wheeler EVs from its Gu­jarat plant.

In January 2022, Reliance Industries Limi­ted (RIL) proposed to invest in Gujarat over a span of 10-15 years to set up a 100 GW renewable energy power plant and green hydrogen ecosystem in order to make the state net zero and carbon free. RIL will in­vest an additional Rs 250 billion in existing projects and new ventures over the next three to five years. Moreover, early 2022 re­ports from RIL suggest that it aims to invest over Rs 600 billion in setting up new energy manufacturing-integrated re­ne­wable manufacturing. This includes so­lar PV mo­dules (manufacturing of polysilicon, wafer, cell, and module), electrolysers, en­er­gy storage batteries and fuel cells.

Offshore wind

According to the National Institute of Wind Energy’s preliminary assessment in the identified zones, 36 GW of offshore wind energy potential exists off the coast of Gu­jarat. Recent media reports have indicated the commencement of one of the country’s largest renewable energy projects in Gujarat as the central government has granted in-principle approval for offshore wind power generation along the state’s coastline. The project entails an expected overall investment outlay of about Rs 160 billion for setting up offshore wind turbines. Moreover, an additional investment of Rs 200 billion-Rs 240 billion has been proposed for setting up onshore transmission infrastructure. The project envisages a total wind power generation of around 2 GW.

Recent auctions

The past one year also saw many aucti­ons being announced in the state. In Ja­nu­ary 2023, NTPC Renewable Energy Limited (NTPC REL) floated bids for the balance of system (BoS) package of interstate transmission system-connected wind power projects with a capacity of 1,000 MW to be located anywhere in Gu­jarat. In December 2022, SJVN Green En­er­gy issued a request for proposal (RfP) to co­mmission a 100 MW grid-connected so­l­ar power project in Goliwada, Guja­rat. Prior to this, in November 2022, NTPC REL floated bids for a BoS package to set up 1.2 GW of solar power projects in Gu­jarat. These projects will be developed in four blocks of 300 MW each at the Kha­vda power park in the Rann of Kutch.

In June 2022, Gujarat State Electricity Co­r­po­ration Limited issued a RfP for 100 MW of wind power at two locations on a turnkey basis. In the sa­me month, NTPC Renewable Energy issued an RfP for a BoS package for solar projects totalling 1,255 MW (3×315 MW+1×310 MW) in the Khavda Renewable Park.

Prior to this, in May 2022, Hindustan Salts Limited issued an RfP for a 1 GW solar project in Kharaghoda, Surendranagar dis­trict. The power generated by the project will be sold in the market. Finally, in March 2022, GUVNL’s auction for 500 MW of solar projects (Phase XIII) saw successful bids from four parties at the same tariff of Rs 2.29 per unit. The winners in this auction were Fortum (through Alpha Energy) with 200 MW, SJVN with 100 MW, Hinduja Renewable Energy with 120 MW and UPC Renewables with 80 MW capacity. GUVNL had issued an RfP in January 2022.

Challenges and the way forward

Gujarat holds immense potential for rene­wable energy development. Al­though the state is moving in the right direction, it still faces several challenges. The biggest challenge at present is the uncertainty su­rrounding the en­vironmental laws around the critically endangered Great Indian Bustard, which is found in the north-western belt of India. The Supreme Court has ordered transmission lines to be laid un­derground and bird diverters to be ins­talled where underground installation is not possible in the Great Indian Bustard arc, which stretches across Rajasthan and Gujarat. This has created apprehension among existing and potential developers and investors in the region. As a result of this regulation, several solar and wind power plants under construction or planned have now become stranded. Thus, not only are old projects at risk but new projects are also affected because developers will be hesitant to invest in the region or bid high tariffs. Other challen­g­es include expansion of transmission sy­s­tems, modernisation and digitalisation of the grid and improvement in pricing mechanisms for consumers.

Going forward, Gujarat is expected to ma­intain a strong position in India’s renewable energy market. The state is expected to see the commencement of offshore wind projects in the near future, particularly with the recent emphasis on offshore wi­nd, further expanding its renewable en­ergy portfolio.

By Kasvi Singh