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Renewable Energy Trend in India

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Since the beginning of time, people have revered the Sun as the source of our planet’s life. The idea of sunlight as a source of energy came about during the industrial eras. India has a huge potential for solar energy. India’s geographical surface receives around 5,000 trillion kWh of incident energy annually, with the majority of areas receiving 4–7 kWh per square meter each day. Solar photovoltaic power may be efficiently harnessed in India, offering enormous scalability. Additionally, solar energy offers the option of distributed power generation and permits quick capacity expansion with minimal lead periods. From the perspective of rural electrification and satisfying other energy needs for power, heating, and cooling in both rural and urban locations, off-grid decentralized and low-temperature applications will be desirable.

Sun is the most secure source of energy from a security of supply standpoint because it is widely accessible. The complete amount of incident solar energy might theoretically be used to generate enough electricity to power the entire nation if it were to be captured efficiently.

In the last few years, solar energy has made a noticeable difference in the Indian energy landscape. Millions of people in Indian communities have profited from solar energy-based decentralised and distributed applications by having their lighting, cooking, and other energy needs met in an eco-friendly way. The reduction of drudgery among rural women and girls who travel great distances to gather fuel wood and cook in smoky kitchens, the reduction of the risk of developing lung and eye diseases, the creation of employment at the village level, and ultimately the improvement in the standard of living and creation of opportunities for economic activities at the village level are just a few of the social and economic benefits.

India has limited conventional energy supplies compared to its high energy demand, which is fueled by a large population and a growing economy. However, India can take advantage of solar energy’s enormous potential because it has sunshine for most of the year.

Additionally, it offers enormous potential for the hydropower industry, which is being researched in many regions, particularly in the northeast.

India’s installed renewable energy capacity (including hydro) was 158.12 GW as of April 2022, accounting for 39.43% of the nation’s total installed power capacity and offering a significant opportunity for the growth of green data centres. Among the G20 nations, only India is on track to meet the goals set forth in the Paris Agreement. ICRA anticipates a 12.5 GW increase in renewable energy capacity in FY22 and a 16 GW increase in FY23.

At the Cop-26 Summit in Glasgow in November 2021, Prime Minister Mr. Narendra Modi committed to raising India’s renewable energy generation capacity to 500 GW and achieving 50% of the country’s energy demand through renewable sources by 2030. In comparison to the first eight months of FY21, the addition of renewable energy capacity was 8.2 GW in the first eight months of FY22.

Current Status

In India, the grid-connected power generation capacity of the solar energy sector has grown significantly throughout the years. While emerging as a crucial component of the nation’s energy demands and a key actor for energy security, it supports the government’s objective for sustainable growth.

The country’s solar potential estimated by the National Institute of Solar Energy is found to be 748 GW, assuming that solar PV modules will cover 3% of the waste land area. The National Solar Mission is one of the main Missions of India’s National Action Plan on Climate Change, which has given solar energy a central role. On January 11th, 2010, the National Solar Mission (NSM) was launched. The Government of India launched the National Sustainable Mission (NSM) as a significant project to promote ecological sustainability and address the country’s energy security issues. Additionally, India will make a significant contribution to the global effort to address the concerns of climate change. 

The Mission’s goal is to position India as a leader in solar energy by establishing the regulatory framework for its rapid dissemination across the nation. By 2022, the Mission hopes to have 100 GW worth of grid-connected solar power plants installed. This is consistent with India’s Intended Nationally Determined Contributions (INDCs) goal to attain around 40% of cumulative installed capacity for electric power from non-fossil fuel sources by 2030 and to reduce the GDP’s emission intensity by 33 to 35% from 2005 levels.

Future 

As the government focuses on electric vehicles, green hydrogen, and the production of solar equipment, India’s renewable energy sector is anticipated to grow in 2022 with a probable investment of US$ 15 billion this year.

As increasingly effective batteries are utilized to store electricity, the cost of solar energy is predicted to decrease by 66% by 2040 compared to the current cost, accounting for approximately 49% of all electricity production. By using renewable energy sources instead of coal, India will save Rs. 54,000 crore ($8.43 billion) yearly.

According to Central Electricity Authority (CEA) projections, thermal energy generation will decline from 78% to 52% by 2029–2030, while renewable energy generation will rise from 18% to 44%.

India is thought to have a potential for 900 GW of renewable energy, with 750 GW coming from solar energy, 102 GW from wind power, 25 GW from bioenergy, and 20 GW from small hydro. By 2030, the nation hopes to have 450 GW of installed renewable energy capacity, with 280 GW (or more than 60%) coming from solar energy. In January 2022, there was an increase in renewable energy capacity of 975.60 MW. Tidal energy potential in India is thought to be around 8,000 MW.

Fig : Renewable Energy Potential In India

Between 2020 and 25 years, an additional 15,000 MW of wind-solar hybrid capacity is anticipated. India is anticipated to install 20.2 GW of wind power capacity between 2021 and 2025, up over 50% from the 39.2 GW of wind power capacity constructed in the nation in 2020–21, according to a recent analysis by GWEC and MEC Intelligence (MEC+).

Growth Drivers

  1. Merger and Acquisitions: 

Reliance New Energy Solar Ltd. (RNESL) announced two acquisitions in October 2021 to expand its capabilities. To improve its position in the Indian renewable energy market, Adani Green Energy Ltd. (AGEL) purchased SB Energy India for US$ 3.5 billion in October 2021. ReNew Power and RMG Acquisition Corp., a special purpose acquisition company (SPAC) listed on the Nasdaq, combined in August 2021. II (RMG II), which estimated the new company’s enterprise worth at $8 billion.

  1. Investments: 

A record US$ 14.5 billion was invested in renewable energy in India in FY22, a growth of 125% over FY21. With a predicted investment of US$ 15 billion in 2022, India’s renewable energy sector is anticipated to expand as the government places more of an emphasis on the production of solar equipment, green hydrogen, and electric automobiles. For the year of 2018 to 21, the government has invested $4.63 billion in hydropower projects to supply electricity to villages in Jammu and Kashmir.

  1. Favourable Policies and Incentives: 

The National Electricity Policy (NEP) 2021 draught was released by the Ministry of Power (MoP) in April 2021, and all interested parties, including Central Public Sector Undertakings, the Solar Energy Corporation of India, power transmission companies, financial institutions like the Reserve Bank of India, the Indian Renewable Energy Development Agency, HDFC Bank, and ICICI Bank, industrial, solar and wind associations, and state governments, were invited to submit suggestions.

  1. Government Commitments: 

The objective of adding 175 GW of renewable energy capacity by 2030 was originally set by Prime Minister Mr. Narendra Modi, but it has since been raised to 450 GW. A new set of regulations was unveiled by the Ministry of Power in October 2021 with the intention of easing stakeholder financial strain and ensuring prompt cost recovery in power generation. In order to transform India into an export-oriented country, the government announced future plans in November 2021 to boost funding under the PLI scheme for domestic solar cell and module manufacture to Rs. 24,000 crore (US$ 3.17 billion) from the current Rs. 4,500 crore (US$ 594.68 million).

Challenges

The main obstacle to further scaling up renewable energy in India is the power distribution businesses’ (discoms’) precarious financial standing. State governments own the majority of these enterprises. These discoms buy almost all renewable energy, leading to extremely long and unsustainable payment cycles. For instance, discoms delayed paying power generators a total of Rs 110,000 crore in December 2020. (this pertains to all power generated, not just RE power). The majority of RE projects report delays of between 6 and 18 months.

Another issue is that as the proportion of RE power rises, operating the transmission grid becomes a technically challenging operation due to the fluctuation in RE power’s generation caused by weather conditions. The capacity of RE power was low until recently, but now that RE projects are providing so much power, they frequently need to restrict or stop generation to keep the grid running properly. The forecasting and planning of wind and solar electricity has just recently become more serious. As a result, grid operations may be better planned and the generation of RE electricity can be projected for the following 24 hours.

The country’s underdeveloped transmission infrastructure has also proved problematic, particularly for RE projects that are frequently installed in rural locations far from major towns and consumption centres. For instance, grand plans to construct huge solar plants in Leh were recently shelved due to inadequate transmission infrastructure. Financing and land acquisition challenges are just two of the challenges that the ambitious Green Energy Corridor programme, which was initiated in 2013 to upgrade the grid to enable RE capacity, has encountered.

More recently, India has produced more energy than it uses, partly as a result of overbuilding coal capacity over the past ten years in response to overly optimistic estimates of demand growth. As a result, distribution companies have declined to sign fresh contracts to buy the renewable energy that is projected to join the grid as additional projects become up and running. Due to unsigned “power purchase agreements” (PPA), an estimated 19,000 MW of capacity is still in the planning stages. This dampens investor mood and enthusiasm for additional auctions.

In India’s and the world’s ambition to combat climate change, the renewable energy sector has the potential to continue expanding rapidly. To maintain this impressive growth, however, a number of interventions are required, including distribution company reforms, a framework for adopting new innovations like battery storage systems and off-shore wind turbines, and technological solutions to integrate a growing proportion of renewable energy into the grid.

Government Policies

  1. Government Scheme: In order to transform India into an export-oriented country, the government announced future plans in November 2021 to boost funding under the PLI scheme for domestic solar cell and module manufacture to Rs. 24,000 crore (US$ 3.17 billion) from the current Rs. 4,500 crore (US$ 594.68 million). The Ministry of Power released a discussion paper in June 2021 with a proposal to update the “Renewable Energy Certificate (REC) Mechanism” in order to solicit feedback from key players in the power industry.
  2. Renewable Purchase Obligations: State electrical commissioners are required to purchase a specific percentage of power from renewable energy sources through RPOs, a method. Additionally, RPO floor pricing has been established to give businesses security. At US$144 per MW, the floor price has been established.
  3. Wind-Solar Hybrid Policy: By 2022, it is intended to have a 10 GW hybrid wind-solar capacity. The two technologies can be combined to reduce unpredictability and maximize the use of infrastructure, like land and transmission systems.
  4. Repowering Policy: Creates a structure that is conducive to repowering and encourages the best possible use of wind energy resources. giving new wind energy projects an additional 0.25% interest rate discount on top of the current interest rate rebate. Repowering projects will be eligible for all fiscal and financial benefits provided to new wind power projects. 

Union Budget 2022-2023

  1. Push Green Energy: In addition to giving energy storage solutions, such as grid-scale battery systems, infrastructure status, the budget announced the issuing of sovereign green bonds. Plans to offer financial assistance to enable coal-fired power plants to co-fire biomass pellets at a rate of 5-7% were outlined in the budget. The increase in revenue for farmers will also lower air pollution and stop the burning of stubble, which lowers greenhouse gas emissions by 38 million tonnes annually.
  2. Net Zero- Emissions target: The Solar Energy Corporation of India (SECI), which is currently in charge of the development of the whole renewable energy industry, received an allocation of Rs. 1,000 crores (US$ 132 million) in the Union Budget 2022–23. The establishment of Saksham Anganwadis with renewable energy infrastructure is being planned by the government. As villages adopt renewable energy and become self-sufficient, pollution levels will decrease. This is a step in the right direction for India’s objective of having net zero emissions by 2070.
  3. PLI Schemes for Solar Modules: 2.57 billion USD) for a PLI programme to increase the production of high-efficiency solar modules. The full integration of industrial facilities into solar photovoltaic (PV) module production will be given top priority by the government.

India has enormous potential for renewable energy, which is still underutilised. In addition, it has a sizable developing economy with rising energy needs. The nation must not only undertake a radical switch from fossil fuels to renewable energy, but also meet new, supplemental demand through increased renewable energy capacity.

As a result, India faces a higher challenge than many other nations since it must install a significant amount of renewable energy capacity, which will require more affordable financial resources and access to clean energy technologies.

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