The Solar Energy Corporation of India (SECI), an intermediary between discoms and developers, is responsible for auctioning a large portion of renewable power capacity in the country. At the forefront of new technology and market developments, SECI is now gearing up to transition towards 24×7 renewable energy supply with its innovative tenders for round-the-clock (RTC) and firm and despatchable renewable energy (FDRE). With a major role to play in achieving India’s 2030 renewable energy targets, it is actively focusing on emerging technologies in the energy storage and offshore wind spaces as well. Further, SECI is considering foraying into the commercial and industrial (C&I) space and also developing its own capacity. At Renewable Watch’s “Solar Power in India” conference, R.P. Gupta, chairman and managing director, SECI, talked about the company’s plans in various areas of the renewable energy sector. He also presented his view on the various challenges and the outlook for the sector. Edited excerpts…
In terms of the tender trajectory, is SECI focusing more on RTC and hybrid auctions, or on plain solar and wind auctions? What has been the experience with the recent RTC and FDRE auctions?
Transmission-related rebates will gradually come to an end in the near future. In addition, the capacity utilisation factors (CUFs) of plain solar and wind power are quite low, which, combined with high interstate transmission charges, will make them unfeasible for some states to procure. Instead, in RTC and FDRE projects, the CUF is usually quite high and almost at par with conventional energy. Thus, the focus henceforth will be on RTC and FDRE.
However, we are definitely not ruling out plain solar and wind power tenders, if states are willing to purchase them from plants located outside their borders and bear higher charges, or if they are planning to set up the plants in their own states.
The recent auctions that SECI conducted for RTC, hybrid and FDRE supply have neither failed, nor been very successful. Currently, the cost of thermal power coming from new plants is almost at par with RTC and FDRE tenders. However, these renewable energy tariffs are fixed for 25 to 30 years, whereas the cost of thermal electricity from the same plants will keep on increasing. We have not, so far, been able to impress upon the states that if they compare RTC and FDRE tariffs with those of new thermal energy plants, they will see that incorporating renewable energy is more affordable.
While the cost of hybrid or RTC power may seem high currently, normal solar and wind generation has a lot of fluctuations and variability in energy production. Further, if transmission charges are added on a per kWh basis for plain solar and plain wind, then this cost becomes too high. Thus, RTC renewable energy is the future. Moreover, RTC power at a tariff of Rs 4.50 per kWh, which includes the battery part, is definitely not in any way unfeasible compared to wind or solar or even conventional power.
Which emerging technology, according to you, has the highest potential to grow?
We do not give preference to any of the emerging technologies. These new technologies are solutions to different problems in the renewable sector, and they must make a mark on their own. In terms of promotion of new technologies, we support them at the earlier stages only. Ultimately, if a technology has to succeed, it has to do so on its own merit rather than continual government support.
Energy storage is definitely one of the focus areas of the government and the industry currently. In the case of offshore wind, there will be initial support, after which it will have to stand on its own in terms of tariffs.
Apart from our annual tendering plan of 15 GW of renewable energy, we are going to explore new technologies. Offshore wind is definitely one of them, and we have already launched a tender for it. Solar-thermal is another area that we are exploring, and we plan to launch a tender for concentrated solar power soon. We are going to plan new tender frameworks as well, like solar plus peak power. In the storage space, apart from batteries and pumped storage, we are looking at carbon dioxide-based storage technologies.
Have you witnessed an increase in demand for renewables from states?
In terms of signing of power sale agreements with states, the situation has improved from where it was a few years ago. We are seeing a lot of demand from the states, and we are expecting more with the new RPO regime in place. However, this demand may be impacted by the transmission waiver being slowly removed, and whether the states thereafter want to set up plants in their own regions or purchase green power from outside.
Does SECI have any plans to enter the C&I segment?
We do have plans to enter the C&I segment. However, our first priority will be to develop our own capacity in developer mode. We plan to have around 10 GW of our own plants by 2030.
What is your overall outlook for renewable energy growth in the country?
We have done a fair amount of assessment of where we are likely to be by 2047. The year 2047 is extremely important for the country, as it will be the 100th year of our country’s independence. As far as emissions are concerned, we are likely to peak sometime between 2040 and 2045.
India has set its net zero deadline for 2070, which is a long-term target. In the near term, the country has targeted 45 per cent reduction by 2030 in the emissions intensity of the GDP from 1990 levels, and a 50 per cent share for renewables in the electrical energy capacity. We also aim to achieve 500 GW of non-fossil-based power generation capacity by 2030.
Achieving our near-term targets of increasing clean power capacity to 500 GW by 2030 requires a lot of regulatory and legal changes, facilitations and system transformations. We will encounter various new challenges in our journey, and we will learn to manage them.
The government is already aware of the challenges that the renewable energy industry is facing today, and has set in motion a statutory and regulatory framework. Also, it has facilitated a number of initiatives that will help achieve these targets. Certain government systems also require some changes to address the problems faced by the generators. What we require from the industry to achieve this target is resource mobilisation, with more developers coming in and greater capital infusion.
There have been some supply chain disruptions for a few components, which we believe are short term and temporary. For this reason, we are focusing on domestic manufacturing. In this respect, all new regulations and policy changes impact the current market dynamics in the short term only. Ultimately, these changes are not only compensated for, they are introduced for the benefit of the sector as a whole, having long-term advantages.
