India’s electricity sector generates roughly 1.2 trillion kWh of electricity annually, which divides roughly into 1,000 kWh per person. This is distinctly low by global standards; it is roughly one-quarter that of China and one-thirteenth that of the US.
This statistic indicates the huge unmet demand for electricity that still exists in India. Add to this the fact that we are the fastest-growing large economy, and we may be looking at having to double our energy output by 2030 in order to sustain this pace of growth. While this calls for steps to augment the power sector’s capacity, we can ill afford to go down the traditional carbon-spewing fossil fuel-driven growth path.
Globally there is now an increased awareness of the havoc that climate change and rising pollution can cause. Every country must cut back its carbon emission levels and India is no exception. Loking ahead, therefore, renewable energy emerges as an obvious alternative. India must strive to transform its energy mix and ensure that a majority of the additional capacity comes from renewable sources. It has been estimated that renewable energy will very soon become cheaper than that derived from fossil sources, which also enhances its importance to a developing economy like ours in which affordability and last-mile access are major issues.
While the last 4 years have seen India’s renewable energy capacity grow appreciably, we need to take some concrete steps to keep up this momentum. Most importantly, we must ensure better grid management so that it can absorb more renewable energy while overcoming the key challenge of its intermittent nature. The truth is that intermittency will emerge as a real concern once renewable energy starts to account for a greater share of the overall supply, and we have some time before that becomes a reality. Here is a five-point action plan that will help us best harness the potential of renewable energy in India in the days ahead:
1) Promote hybridization of solar and wind energy and build ancillary markets
The synergy in a hybrid wind and solar plant will help reduce variability in power generation. Hybrid projects would also have much higher capacity utilization factors, thus practically eliminating the intermittency challenge. Such projects have the additional benefit of reducing the costs associated with the sharing of transmission lines. Ancillary markets will provide backup services that smooth out the variable nature of energy supply. Germany now has enough storage capacity to cover the needs of 6.3 million people to support its grid infrastructure while we do not have any. There are tremendous opportunities for improvement in this one area alone
2) Build enhanced evacuation infrastructure
We need greater investment in high-voltage transmission lines to transport bulk energy over vast distances quickly and efficiently from power-rich to power-scarce states. This is all the more important in a scenario where storage solutions are not well developed
3) Invest in digitalization
There is huge potential for advanced software solutions that can optimize grid-level operations besides impacting consumer behaviour. The creation of demand response programmes, for example, can prod industries to shift their loads to times during the day when more energy is available on the grid. This, in effect, reduces peak demand. Demand response programmes will not be cost burdens on renewables and are, in fact, proven business models in themselves.
4) Develop battery storage solutions
As battery storage costs continue to fall precipitously, they will become an increasingly important tool for managing the fluctuating pattern of renewable energy generation. Grid operators can store electricity generated from renewable projects in large battery systems in low-demand situations, and then promptly release that electricity into the grid when demand increases.
5) Turnaround the distribution companies
Nearly a quarter of electricity generated is lost in transmission because India’s distribution companies (known here as discoms) use outdated infrastructure, resulting in line faults and leakages, as well as undersized and over-utilized transformers. Weak monitoring and sloppy maintenance standards lead to frequent power theft through hooking and tapping. Not surprisingly, this results in our discoms suffering from poor economic health, which is further accentuated by their inability to collect dues from their customers in a timely fashion. This sets off a negative ripple effect in the entire electricity value chain. Immediate reforms are needed to revitalize the discoms – privatization and greater autonomy may be the answer. There is a dire need to invest in upgraded infrastructure and to formulate an action plan to enhance revenue collection.
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Today, the criticality of renewable energy cannot be overemphasized given that it balances the three crucial goals of the Indian economy: rapid pace of growth, tackling pollution and meeting our global commitments on climate change. Not surprisingly, the sector has been at the centre of policy attention and the Indian government has been focusing on several enablers to help unleash its full potential. However, far from being complacent, we need to identify the areas where the sector is still deficient or needs support and address those gaps at the earliest opportunity through strategic interventions as outlined above. We owe our children a greener and safer planet, and a booming renewable energy sector will go a long way in helping us realize this vision.