- Current status of power
- Contradictory path
- Solar Energy
- Challenges in solar energy
- Boosting Manufacturing
- Suggested pathway
What India should do to get its energy transition right?
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India has committed in the 2015 Paris Agreement to reduce GHG emissions intensity by 33-35% below 2005 levels, and achieve 40% of installed electric power capacity from non-fossil sources by 2030. In this context at the UN General Assembly in 2019, India announced a target of 450 GW of renewable energy (RE) to be achieved by 2030.
Current status of power:
- As of 31 March 2020, the National Electric Grid had a Total installed capacity of 370 GW.
- The power production in India is dominated by coal.
- Coal (56%) > hydro > wind > solar PV > natural gas > bioenergy and waste > nuclear and oil.
- The recent study of the Central Electricity Authority (CEA) estimated 430 GW non-hydro renewables (280 GW solar + 140 GW wind + 10 GW bio); thermal capacity at 266 GW thus making the percentage of non-fossil fuel (RE + hydro + nuclear) in installed capacity by 2030 at 64%, much higher than India’s Paris commitment.
- India has recently reinforced the target for coal production at 1.5 billion tonnes to be achieved by 2024.
- The privatisation of coal mining and recent auctions have given a meaningful thrust to this.
- These convey contradictory signals and raise the following questions: Are our commitments feasible and targets achievable?
- The targeted coal production of 1.5 billion tonnes, even by 2030, would mean thermal generation capacity could double over the current 223 GW.
- In that case, even with targeted RE capacity, we will not achieve our emissions intensity Paris commitment.
- India needs a sober assessment of constraints mixing ambition with feasibility and look at a more realistic pathway.
- In 2014, the solar target was increased to 100 GW by 2022.
- India reached 35.7 GW solar power production by 2019, and it seems India may reach 60-70 GW by end-2022 which will be a remarkable achievement.
- To reach 280 GW by 2030 requires the addition of an average annual capacity of 30 GW, which at the present pace seems impossible.
Challenges in solar energy:
1. Structural challenges:
- But solar deployment has seen policy challenges both from Centre and states.
- They include continuous changes in duty structure; renegotiation of PPAs; curtailment of solar power; extremely delayed payments in some states; policy flip-flops on open access and net metering.
- It also comprises of the delays by state agencies and regulators; land possession difficulties; transmission roadblocks (even in solar parks).
- The roadblocks on deployment will affect both foreign and domestic investment.
2. Capacity and Storage:
- Our capacity for cell manufacture is 3 GW, though workable capacity is actually around 2 GW.
- The cells are more expensive and less efficient withlittle upgrade in a rapidly changing world of technology.
- Our module capacity is around 10 GW.
- 90% of cells and 80% of modules are imported largely from China or Chinese companies elsewhere.
- Wafer imports are 100% as we don’t manufacture ingots/wafers.
- For every GW (average cost in 2019 of Rs 5,000 crore) we deploy, more than half goes to China.
- Continuation of this strategy would lead to a huge import bill and put our energy security at risk.
- The imposition of customs duty and other restrictions, due to recent standoff, will lead to increased tariffs and supply bottlenecks, making capacity increases difficult.
- Solar with storage requires even greater solar capacity deployed, because part of it would go for storage.
- There are huge storage constraints in India which include limited Hydro pump storage, solar-wind hybrid with batteries.
- This brings us to the vexed problem of domestic manufacturing.
- India has dismal manufacturing in solar and we do not even manufacture lithium-ion batteries.
- Lithium and other raw materials are in short supply, and China has moved to take control of sources.
- To achieve self-reliance, India must at the least plan to make 5 GW of ingot/wafer manufacturing capacity urgently.
- Indigenous manufacturing should be flexible enough to absorb shifts in tech space and maintain a competitive edge in global markets, keeping in mind the risk of being outdated.
- Policy, fiscal and financial support prescriptions should aim at creating globally competitive industry.
- India needs todevelop batteries suitable for extreme Indian weather conditions but globally benchmarked; this demands a mission approach, getting our best people and institutions together and properly funded.
- Build thermal capacity as per CEA estimates and quickly. None after 2030. Retire inefficient plants. Plan for miner rehabilitation.
- Accelerate RE after 2030 with storage. Aim for 10 GW solar and 5 GW wind annually.
- Develop 5-10 GW ingot/wafer manufacturing capacity urgently and diversify import sources even at some extra cost.
- Develop a battery for Indian conditions in three years; full battery manufacturing in India in five years.
- Revisit the manner of solar generation. Prioritise decentralised and solar agriculture.
- Plan for hydrogen economy with pilot projects and dedicated highways for long and heavy haul traffic.
- Put a strong energy demand management system into place with much stronger energy efficiency and the conservation movement.
- India should move towards compulsory green buildings.
- Setting the demand-supply projects right.