In an interaction with Industry Outlook, Arun Tripathi, Head - Energy Business, Regulatory & EHS, at Hero Future Energies shares his views on the emergence of renewable energy market in India, addressal of challenges faced by utility scale renewable energy projects and more.
The global renewable energy market size is anticipated to reach USD 1977.6 billion by 2030. How do you see this market evolving in India? What are the major factors driving the growth of this market?
Globally, India ranks fourth in renewable energy
capacity and wind power and fifth in solar power
capacity. India has set a target to reduce the carbon intensity of the nation’s economy by less than 45% by the end of the decade, achieve 50% cumulative electric power installed by 2030, and achieve net-zero carbon emissions by 2070. India has been ranked amongst top 5 countries in the world, and the best among the G20 countries, based on its Climate Change performance. India is ranked 8th as per Climate Change Performance Index (CCPI, 2023).
The Central Electricity Authority estimates India’s power requirement to grow and reach 817 GW by 2030. Most of the demand will come from real estate and transport sectors.In the Union Budget 2022-23, the government allocated Rs. 19,500 crore (US$ 2.57 billion) for a PLI scheme to boost manufacturing of high-efficiency solar modules.In October 2021, India retained its third rank on the EY Renewable Energy Country Attractive Index 2021.At the same time, Non-conventional energy sector received FDI inflow of US$ 12.57 billion between April 2000-June 2022. Rising foreign investment in the renewable sector (such as the US$ 75 billion investment from the UAE) is expected to promote further investments in the country.
India’s ambitious renewable energy goals are transforming its power sector. Rising population and widespread electrification in rural homes is fueling the demand for energy to power homes, businesses, and communities.
India's renewable energy sector is expected to boom with a likely investment of US$ 15 billion this year, as the government focuses on electric vehicles, green hydrogen, and manufacturing of solar equipment. It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. Use of renewables in place of coal will save India Rs. 54,000 crore (US$ 8.43 billion) annually.
Around 15,000 MW of additional wind-solar hybrid capacity is expected to be added by 2025. As per the Central Electricity Authority (CEA) estimates, by 2029-30, the share of renewable energy generation would increase from 18% to 44%, while that of thermal is expected to reduce from 78% to 52%. The CEA also estimates India’s power requirement to grow to reach 817 GW by 2030.
With the high scale of demand, strong policy support from government and competitive advantage of India over other economies makes it highly poised to achieve large investments in renewable energy sector.
One of the major challenges for the renewable energy sector is balancing the demands for energy with other land-use requirements. How can this requirement be met and balanced with the need for land for housing, food production, flexibility, etc?
In India, electricity generation has to compete with alternative uses for land such as agriculture, urbanization, human habitation and nature conservation, unlike Europe or the United States of America. India needs to ensure smart, judicious, and adequate planning of land use for renewable energy projects to meet its ambitious 2050 energy decarbonization and sustainability goals. It is expected by 2050, the amount of land that could be needed for solar will be equivalent to 1.7-2.5 per cent of the country’s total landmass, or 2.2-3.3 per cent of its non-forested land.
Balancing this huge land requirement with other alternative land uses is one of the toughest challenges the country will face in near future. Though there is no equal alternative to land based solar installations but with improvement in Renewable Energy technologies some part of this issue can be addressed in a better way.
It is important that innovation plays its part in minimizing land use. We have many options available with us like solar can continue to use more and more rooftops, even those belonging to large public and private institutions.
At present, India has three best bets to minimize its land dependency, these are Offshore Wind installation, Floating Solar and large-scale battery storage.
India can potentially generate 194GW of offshore wind power along its 7,600km coastline. Tamil Nadu and Gujarat combined can offer 71GW of offshore wind. Offshore wind projects can deliver more than 50-55% utilization factors with a better wind resource profile in deep oceans.
Recently, the ministry of new and renewable energy (MNRE) has revived its offshore wind power development goals by unveiling a roadmap for installing 30 gigawatts (GW) by 2030, just as project costs are falling globally.
In addition to offshore wind, floating solar is another which has some good potential for Solar energy generation. A report by The Energy and Resources Institute (TERI) has found that India's reservoirs have 18,000 sq. km of area with the potential to generate 280 GW of solar power through floating solar photovoltaic (PV) plants. NTPC is already developing a 100 MW floating Solar capacity in Ramagundam out which 20 MW capacity is operational additionally MP state is coming up with a 600 MW floating Solar capacity on Narmada River in Omkareshwar Dam.
With combination of offshore wind, floating solar and other feasible options like rooftop solar and wind, battery storage and Agrisolar, India can easily achieve its ambitious decarbonization goals.
Financial issues involved in bringing renewable technologies and renewable energy to the masses is also a concern. New business forces are dramatically increasing investment in the sector. Yet the transition from the carbon and fossil fuel industry is a massive shift and comes with a huge financial cost. How can these issues be addressed?
India wants non-fossil fuel power sources to provide half of its electricity supply by 2030. To achieve this target, India needs to massively scale up funding for renewables. India’s giant target of achieving 450GW by 2030 needs a capacity commissioning rate of, on average, 35-40GW annually going forward, with annual investment of US$35-40Bn in generation, transmission and storage assets.