India’s renewable power capacity : IEA report

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Recently, an International Energy Agency (IEA) report stated that India will almost double its renewable power capacity in the next 5 years.

Key Points

• Global Renewable energy:  It will comprise 90 percent of global electricity capacity expansion in the next five years and much of it will be in India.
  • Renewable energy’s installed power capacity addition will grow to 2,400 gigawatts (GW) between 2022 and 2027. 
    • This expansion was 85 percent faster than the previous five years and will be equal to the entire installed power capacity of China today.
• India: 
  • With the addition of 145 gigawatt (GW), India is forecast to almost double its renewable power capacity over 2022-2027. 
  • Sources: Solar photovoltaic (PV) accounts for three-quarters of this growth, followed by onshore wind with 15 percent and hydropower providing almost all the rest.
• Other countries: 
  • China, the European Union and the United States will be three other geographies contributing majorly to this upward trend besides India. 
• Reason of major contribution: 
  • This is primarily owing to the favourable policies and market reforms in all four.
• Wind vs Solar:
  • Wind energy is a different ball game compared to solar because the good sites are only located in coastal states. Even within a coastal state, there are tier 1, tier 2, and tier 3 sites depending on the wind intensity.
• DISCOM:
  • Raising the capability of DISCOMs to procure more renewable energy will be crucial to achieving faster growth.

Renewable Energy in India

• Finances: 
  • India’s plan to install 500 GW (gigawatt) of renewable energy capacity by 2030 will involve an investment of at least ?2.44 lakh crore or ?2.44 trillion. 
  • As part of its international climate commitments, India has said that it would source roughly half its energy needs from non-fossil fuel sources by 2030. Financing the energy transition of developing countries such as India is among the thorniest geo-political issues, with India having said multiple times at United Nations climate conferences that “trillions of dollars” will be required.

Image Courtesy: TH

• Transmission Plans:
  • It includes systems required for transporting 10 GW of off-shore wind-based energy located in Gujarat and Tamil Nadu at an estimated cost of ?28,000 crore. 
  • With the planned transmission system, the inter-regional capacity will increase to about 1.50 lakh MW by 2030 from 1.12 lakh MW at present.
  • Energy storage: Because renewable-energy generation is only available for a limited time every day, the plan envisages installing battery storage capacity worth 51.5 GW by 2030 to provide “round-the-clock power to end-consumers.
• Non fossil fuel Generation Centres:
  • The plan has identified major upcoming centres in the country, including at Fatehgarh, Bhadla and Bikaner in Rajasthan, Khavda in Gujarat, and Anantapur and Kurnool in Andhra Pradesh.
• Capacity at present:
  • The installed electricity-generating capacity in the country at present is 409 GW, including 173 GW from non-fossil fuel sources, which is about 42% of the total.

Significance

• Clean energy transitions are driving down the costs of energy storage technologies, expected to reduce further with an increase in scale and innovations.
• Suspending reverse bidding was a positive thing because for a good four or five years, it did not lead to higher wind capacity addition.

Indian Policies

• Raising Import duty: 
  • The duty on imports was increased to 40 percent for PV modules from 15 percent and to 25 percent for solar cells in April 2022. 
  • This was done to reduce dependence on China and increase domestic manufacturing. 
  • This is expected to add 16 GW of PV capacity, 60 percent higher than last year.
• The Production Linked Incentive (PLI) scheme:
  • It sanctioned 9 GW of PV manufacturing capacity to provide an ecosystem of local manufacturing. 
  • This programme aims to expand India’s solar PV cell and module manufacturing capacity to over 70 GW in this decade, including 29 GW of manufacturing capacity fully integrated across the whole supply chain.

Way Ahead

• Policy support: Consistent policy support from the Indian government may enable the transition, particularly by promoting local manufacturing of solar modules. 
• Replace China: There are bottlenecks in the supply chain from China, and India can make a good place in the global world, utilising this.
• Schemes like PLI and raising import duty: Similar measures are expected to meet the growing demand of the renewable energy industry and help in the diversification of supply chains in the long term.
• Increasing Storage will play a key role in the hybrid project, particularly to overcome the intermittency of RE and enhance grid balancing.
• Closed – envelope submissions: Currently, the government is considering closed-envelope submissions. This could raise tariffs for wind energy and make it a more competitive market.
• Improving the financial performance of DISCOMs and increasing penalties for non-compliance with renewable purchase obligations should limit delays in signing PPAs with auction winners, making developers and investors more willing to undertake new utility-scale projects.
• Increase rooftop PV deployment in their grids should encourage them to attract tens of millions of potential prosumers by facilitating investment, thereby tripling main-case distributed PV deployment for 2022-2027

Source: DTE + TH