Changing landscape of renewables in India: Opportunities and challenges

May 13, 2015 10:58 am0 commentsViews: 574

suzlon-1The Indian renewable industry is currently
experiencing the right winds of change and
is all set to alter the energy landscape of the country in a positive way. With a renewable power generation capacity of 245 GW, India has the fifth largest renewable energy portfolio globally. Clean energy sector is already contributing ~13% of India’s total installed power capacity which is mainly driven by over ~22 GW of wind power. The renewable energy sector will play a signi cant role in the future energy road map of the country. 24×7 energy access to all by 2019 is not a distant dream with the government playing an active role in promoting the adoption of renewable energy resources.  India has done 34 GW and in the next 7 years we now have a target of 175 GW, comprising of 60 GW wind energy which is an ambitious target. The government’s commitment to green India manifests in some of the additional measures such as reinstatement of Accelerated Depreciation (AD), increasing the coal cess from Rs 100 to Rs 200 during the Union Budget, thereby providing an impetus to clean energy. Recently, the Reserve Bank of India’s (RBIs) move to include renewable energy under priority sector lending will also help to further enhance India’s renewable energy portfolio and achieve energy security. India has the potential and capability to lead the global transition to renewable energy sources and become the renewable energy technology hub to the world. Post the Electricity Act 2003, renewables have been an integral and growing part of the energy mix in the country and wind leads the pack, contributing ~70% of all modern renewable alternatives. Additionally, owing to rapidly declining cost of energy from renewables, renewable energy sources such as wind are less expensive than the prevailing commercial or industrial tariffs . In fact, many corporates, public sector units and small and medium enterprises such as in textiles have already tapped the benefits of wind power to hedge their energy costs.
The Indian renewable sector will also witness a ‘Quantum Leap’ in 2015-2016 in the market size and growth. Now that Accelerated Depreciation (AD) has been reinstated, the wind market size is likely to surge by 80% in the new capacity additions in this  nancial year compared to 2,000 MW last year. Given the stable government and policy framework the industry can achieve the set ambitious targets both in wind and solar. Hence, I am bullish on renewable sector growth in the country.
The government’s ambitious plans of 175 GW from renewables by 2022 can be achieved easily if some of the key issues faced by the private sector are addressed. Availability of grid and land infrastructure at the state level is a concern and the state governments need to invest in that area well in advance based on available wind resources in the state. Renewable energy needs large-scale funding, so banks and  nancial institutions should earmark at least 20%  nance for renewable energy projects and  nance should be available for longer period of 20-25 years. This will ensure lower cost of energy which will bene t the end consumer.
Similarly, the solar industry requires a huge change in approach to bring down the cost of kWh towards grid parity and also bring improvement in the capacity factor. While the  first phase of solar mission was very successful in bringing the market to a GW size, there is a long way to go in terms of innovation, manufacturing of quality modules on a required scale and achieving efficiency in installation and maintenance. There is enormous scope for indigenising the solar value chain in India. We need to make India a manufacturing and technology hub for solar. Another fundamental change would be the fossil fuel dominated energy systems. As the share from renewables in the energy mix grows rapidly, the systems and stakeholders have to realign to these new realities. Power evacuation and intermittency are major obstacles for renewable industry growth. We need to speed up execution of the Green Energy corridor and encourage massive investments in up gradation and creation of new transmission and grid infrastructure.
The journey towards a new energy architecture needs long term and integrated policy approach. In order to sustain the momentum in the renewable sector, the government needs to initiate specific actions. First, the NAPCC target for electricity from renewable by 2020 to be raised to 20% along with adherence to renewable portfolio obligations. Secondly, the Land regulations and power evacuation issues have to be addressed expeditiously. Third, we need speedy clearances under a single window. Fourth, the alignment of power tari s to markets in order to improve the health of discoms. Finally, creation of a national market for power along with more open access. We are very con dent that Indian renewables from all sources will grow manifold in the next  ve years, revolutionising the Indian energy system and making India a manufacturing and innovation hub.

Leave a Reply

three × = 15

shared on