Green Ahead - India’s power transition driven by renewables
In April 2022, the Indian Railways announced the cancellation of 42 trains across the eastern, central, and northern regions. The reason for cancellations: to give preference to freighters hauling coal to various power generating stations. According to Central Electricity Authority, 81 out of 165 thermal power stations were left with less than 10 per cent of coal stock in their coffers.
The summer of 2022 has seen the nation swept by treacherous heatwaves and power shortages. The coal shortage combined with the heatwaves could mean a miserable summer for both industries and the public. While the total installed capacity of power generation in the country is 391 GW and peak demand is 291 GW, it does come as a matter of concern that India’s power infrastructure depends heavily on the availability of coal.
Coal is still India’s biggest source of power generation, contributing to 60% of the total power generation (234 GW). Thermal power generation has caused compounded environmental complications, and it is crucial for the country to collectively take steps to reimagine India’s power generation.
In 2021, Prime Minister Narendra Modi announced India’s ambitious plan to achieve net-zero by 2070 at the COP 26 summit in Glasgow. Climate change is now finally recognised as a critical global concern, and India is taking steps in the right direction. The government is pushing for an increased focus on renewables and achieving 500 GW of renewable energy by 2030 contributing to 50% of the energy mix.
With India’s per capita electricity consumption set to double in the next 5-6 years, power generation through renewables will become the only way forward. Through renewables, India can maintain the crucial balance between sustainability and demand. In 2022, 17 GW of India’s thermal capacity is likely to retire and another 26 GW by 2027. This presents an opportunity for the government to drive capacity addition through renewables.
India has witnessed the fastest growth in renewable energy capacity addition among major economies over the last 7 years. Investment in renewables has grown by 60% over 2015‐19 up to $18 billion.
Since 2017, renewables have outpaced coal-fired capacity additions. Currently, India has about 150 GW of installed renewable energy capacity including large hydro projects which account for 47 GW. The current solar energy capacity stands at 41.09 GW, and wind at 39.44 GW.
States like Tamil Nadu, Gujarat, Maharashtra, Chhattisgarh, and Karnataka have taken the lead in power generation through renewables and a commitment to not stop adding to the coal-based infrastructure. Karnataka is now a top seller of renewable energy too.
With incremental tech developments, increased private participation from private players and policy push, solar power plants cost cheaper to build than coal plants. The government has also committed $110 million for clean energy research and strategic funding. This investment outlay will focus on the accelerated deployment of clean energy solutions, develop standards in collaboration with the power sector stakeholders and emulate success stories from across the world through India’s membership in the Mission Innovation group of countries.
In the quest to achieve the transition toward clean energy, India still needs to address gaps in its R&D. According to a report by the Stanford Precourt Institute for Energy titled Innovation and India’s Energy Future, opportunities in clean energy research will include the enablement of interdisciplinary energy research and education in India, scaling up of digital innovation in energy beyond pilot projects, integration of clean energy R&D into national energy and climate policy. What poses to be a bigger challenge than power generation through renewables is integrating this growing share into the grid. The government has put supportive policies including tax incentives and 100% FDI to address this.
The untapped potential, economic attractiveness, and a brisk auction system through energy marketplaces like the India Energy Exchange have also strengthened the case for renewables. Tangled Wires: Preparing India’s Power Sector for the Clean Energy Transition a research report from the Carnegie Endowment for International Peace, does caution that the grid structural costs for renewables when deployed at a large scale may undo the benefit of cheap prices of generation. This would require fundamental changes in grid investments and operations.
In India, with different states running their grids, it will be essential to coordinate the flow of power. With efficient energy exchanges, the volume of energy traded between the grids can be increased providing a more stable and reliable supply of renewable power. This could prove to be cheaper and cleaner and eventually replace fossil fuels.
