In the Covid-19 episode one of the important changes that go in favour of the Indian economy has been the increased opportunity of renewable energy (RE) - particularly solar energy. As of now, wind energy is the biggest producer of RE in India. However, according to domain experts, wind energy cannot be increased by the required amount in future. There are many reasons behind it. One major reason has been the lack of availability of suitable land for installation of wind turbines. Additionally, wind never blows in predictable ways. So wind power needs very selective places for installation. Therefore, the Indian government is depending mostly on solar energy to fulfil its ambitious target of 176 GW of RE by 2030. Hydroelectricity has installation limitations and also has certain environmental hazards. Additionally, the cost of installation of hydel plants is also quite high. Biomass energy is also not very suitable as a big source of energy.
A special utility of solar power
Solar power in many underdeveloped areas comes from typical solar micro-grids that consist of an array of photovoltaic (PV) cells that generate power and transmit it to a central controller called the Power Conditioning Unit (PCU). The PCU then transmits electricity directly to homes, shops, mobile towers, streetlights, pump sets etc. Further during the day, if the power generated is not used or surplus power is generated, the PCU directs this to the battery bank which stores power. This power can then be used after the sunset.
At the same time, it is seen that use of biogas from agriculture and domestic waste is catching up for generating need-based power in tandem with PV cells to ensure 24X7 power supply in remote corners of the country.
R. N. Sen, Editor, Energy Konnect (EK) and former Chairman, DVC and former Chairman, State Electricity Regulatory Authority, West Bengal, wrote in EK (July August, 2020), “We are seeing a host of individual institutions from both private and public sectors coming together to resolve complex socio-economic challenges.” This is a good sign.
Solar tariff has come down to a historic low
The EK refers to a noticeable matter and states, “Recently, solar tariffs have fallen to a new record of `2.36 per unit in an auction of 2,000 MW. Earlier in May 2020, SECI conducted the first-of-its-kind auction for round-the-clock power where the levelized winning tariff emerged at `3.60 per unit.”
The solar equipment costs have been falling very sharply in the last six months. The renewable sector has been growing fast over the past decade. Sen also points out that the share of renewable energy has inched up significantly in the past several months (during the Covid–19 pandemic). In India, the share of renewable energy in the electricity basket has increased from under 10% to well above that level between the pre-lockdown period (around mid-March and early June) and when the unlock period started.
A new experience in this phase has been that the supply from renewable sources was not curtailed by utilities in this low demand period. Instead, they preferred to temporarily shut down coal-fired generation units. In the present-day scenario of precarious ecological realities, power distribution companies will prefer RE over conventional power if it is available at reasonable prices.
Challenges before the renewable energy
A time has come when RE has more opportunities than the challenges it faces. On one hand there is little scope to expand thermal plants (TP) and on the other hand, attention is more towards RE. A high official told BE on conditions of anonymity that the cost of installation is so high in the case of TPs that the cost per unit of power (including fixed cost and variable cost) would be more than `4 even if one has its own allotted mines. Coal sourced from outside the country would raise the power tariff even more. Additionally, due to environmental obligations, TPs are now quite unattractive. On the other hand, the unit cost of power in RE is decreasing. So, it might be viable provided that the demand for power is rising.
An expert on solar energy and working in the government sector told BE that scope for solar power is huge. But many projects in India have been stopped due to lack of availability of solar panels. Imports from China have been hampered and as a result, PV cells are coming from different sources. But availability has not improved much. The Indian government and some state governments are also trying to improve domestic production but it may take time. So supply of low cost PV cells is the precondition for development for solar energy in India.
Low demand for power is the main challenge
In India low incremental demand for power is the biggest challenge for the power sector. The Indian government’s wrong estimation of growth of GDP about a decade ago is the main reason behind this. It was thought that India could grow by double digits for more than a decade and the power sector was ramped up. Investment in the power sector, particularly, in the thermal power sector was excessive. But growth prospects were not as bright as was thought - particularly after FY 2011-12. So, demand for power did not increase much and a lot of power projects remained incomplete. A Brookings report (August 28, 2019) pointed out that India’s gross installed capacity was over 350 GW but the maximum load met had been approximately 180GW. Secondly, use of different types of new power saving devices is also a reason for low demand of power. Unless there is a major upturn in the economy, demand for power will remain subdued.