RENEWABLE ENERGY - ENVIRONMENT

News: Modi underlines opportunities from renewable energy sources

 

What's in the news?

       Prime Minister Narendra Modi said that the potential of solar, wind and biogas in India is no less than any gold mine or oil field for our private sector.

 

Key takeaways:

       Modi said that India’s future development would be based on three pillars for green growth and energy transmission.

a.       Increasing the production of renewable energy.

b.      Reducing the use of fossil fuel in the economy.

c.       Moving towards a “gas-based economy” in the country.

 

Issues at Present:

       As part of its Paris Climate pledge, India has one of the most ambitious targets of installing renewable power by having a target of installing 175 GW of renewable energy capacity by 2022.

       However, the industrial experts pointed out that the country is set to miss the target as the progress on it is far from satisfactory with 80 GW capacity yet to be installed.

 

Renewable push in India:

       With the launching of the largest renewable energy expansion program in the world, the Indian economy offers a transitional push towards the renewable energy sector as follows.

 

1. Rising prices of fossil fuel:

       The global oil prices have been fluctuating higher over the years.

       Since India imports 80% of the oil and gas, it's time to shift towards renewable energy to ensure energy security of the nation.

2. Rising electricity demand:

       With increasing urbanization, which is rapidly increasing demand for electricity by putting pressure on its existing resources, it's high time to make use of alternative sources of energy like solar and wind to ease our energy sector.

3. Clean energy:

       For a country such as India, the world’s third-largest emitter of greenhouse gases, the clean energy sector is crucial as it can help in tackling climate change and reduce the consumption of fossil fuels.

4. Geographical advantage:

       Being at an advantage geographically, India’s focus on solar energy has particularly rendered results along with the wind energy sector has an indigenous wind power industry with a manufacturing base of 10,000 MW per annum.

5. Investment:

       From the year 2014 till 2019 the renewable energy share had a growth rate of 17.5percent, India has fared well is on investment specifically Foreign Direct Investment in the renewable sector.

6. Tariff reduction:

       The solar power tariff was reduced by approximately 75 percent due to the plug and play model for solar panels installations to make renewable transition cheap and affordable.

 

Challenges faced by renewable energy:

India has achieved the milestone of installing 100 gigawatts (GW) of renewable energy capacity in mid 2021, however far from the original target. There are many factors plaguing the growth of the sector as follows.

1. Finance:

       One of the biggest challenges in renewable energy development is the high cost of initial installation, coupled with the higher interest rate on loans ranging 12-15 percent affects the production cost of the renewable sector.

2. Variability:

       Despite the percentage of renewable energy increases, the increasing variability in its generation due to weather conditions makes scaling up of renewable energy a difficult task.

3. Issues in transmission:

       Several renewable energy projects are often set up in remote areas and are away from large cities and consumption centres making the weak transmission grid affecting renewable scale up in India.

       Eg. Ambitious plans to build large solar projects in Leh were recently cancelled citing weak transmission infrastructure.

4. Lack of divergence:

       Since recent big initiatives of the government in renewable energy is prioritised towards solar, the policy uncertainties looming large across other sectors such as wind, biomass, waste-to-energy plants affecting the divergence of renewables in India. 

5. Import dependence:

       India has consistently relied on imports from China such as solar panels, modules, storage batteries and other accessories, which have become costlier by 20% to 25% since the pandemic.

6. Environmental concerns:

       The government over the past few years shifted the focus towards large wind and solar parks, which can impact the environment and lead to conflicts with the local communities and environmentalists due to land issues and its adverse impact on the local ecology.

7. Poor DISCOMS:

       The poor financial condition of power distribution companies (DISCOMS), most of which are owned by state governments resulting in very long and unsustainable payment cycles affecting the scaling up of renewables in India.

8. COVID-19 challenges:

       COVID-19 had a wide-ranging impact on the Indian renewable energy sector as it had caused delay in construction progress, capacity addition outlook and impact on players across the sector value chain.

9. Behavioral change:

       Social acceptance of renewable-based energy systems is still not very encouraging in urban India. Despite heavy subsidies being provided by the government for installation of solar water-heaters and lighting systems, its low penetration affects the potential of the sector.

 

Government Measures:

       Ethanol blending

       Pradhan Mantri Kisaan Urja Suraksha Evam Mahabhiyan (PM-KUSUM, a scheme for solarising agriculture)

       Incentives for solar manufacturing

       Incentives for rooftop solar scheme

       Incentives for coal gasification

       Incentives for battery storage

       National Green Hydrogen Mission

       Gobardhan Yojana

 

WAY FORWARD:

1. Hybridization of solar and wind energy:

       The synergy in a hybrid wind and solar plant will help reduce variability in power generation, eliminating the intermittency challenge leading to higher capacity utilisation.

2. Enhanced infrastructure:

       Need to enhance greater investment in high-voltage transmission lines to transport bulk energy over vast distances quickly and efficiently from power-rich to power-scarce states.

3. Digitalization:

       There is huge potential for advanced software solutions that can optimize grid-level operations besides impacting consumer behaviour.

4. Developing battery storage:

       As battery storage costs continue to fall precipitously, they will become an increasingly important tool for managing the fluctuating pattern of renewable energy generation.

5. Other measures:

       Governments, utilities, and banks will need to explore innovative financial mechanisms that bring down the cost of loans and reduce the risk of investment for lenders.

       Distribution Company reforms to enhance revenue collections and turnaround their negative balance sheet, a framework to adopt new developments like battery storage solutions and off-shore wind turbines, and technology solutions to integrate an increasing share of renewables into the grid.

 

Thus, given the vast potential of renewables in India, all it needs is comprehensive policies and an investor friendly regime to be a global leader in clean and green energy to balance out the rising pollution and to meet our global commitments on climate change along with a growing economy.