Renewable power is slated to become the major contributor to the total power generation across the globe. The capital expenditure and operational concerns which have been deterring investments in the sector seem to be waning and renewable power generation is emerging as a low cost alternative compared to the fossil fuel based one. According to a report by International Renewable Energy Agency (IRENA), in year 2019, 72 percent of all the power generation capability additions were in the form of renewables. This is because of a considerable reduction in the cost of renewable power generation. With the help of new technologies, countries across the world are realizing the potential returns of solar and wind projects.
The IRENA report says that a reduction has been witnessed in the cost of power generation out of utility-scale solar photovoltaics (PV) by 82 percent between 2010 and 2019. This can prove to be a significant encouraging factor for those who are deliberating over the operational expenditure of solar power projects. Solar and wind projects are
expected to disrupt the coal based power plants. Results from auction suggest a continuance of this sentiment moving forward in 2020 and beyond.
To put things into perspective, the report underscores the difference such a move is going to make. A replacement of 500 GW of existing coal capacity which incurs high operational expense with solar PV and onshore wind can bring down annual system costs to $23 billion per year. It can reduce annual CO2 emissions by close to 1.8 gigatonnes and galvanize the global economy to catapult it by 1 percent of global GDP. “Cutting carbon dioxide emissions in line with the Paris Agreement remains as crucial as ever in the wake of COVID-19, while also offering tremendous potential to put millions of people back to work,” said Francesco La Camera, Director-General, IRENA.
In the context of Indian power generation sector, it can bring about an overarching transformation. Currently, around 40 coal-based power plants having a total capacity of 30 GW have seen their operations coming to a standstill during the pandemic, while generation from renewable resources carries on. Many ports importing coal have cited force majeure causing the coal export from India to decline. Under the Paris Agreement, with an aim to reduce the carbon footprint, India had vowed to augment its renewable energy capacity to 175 GW, and solar would constitute 100 GW out of it. However, as of December 2019, India has an installed capacity of only 33.7 GW. So, a lot needs to be done to achieve the goal.
Moreover, an impetus is required in terms of bringing solar power generation under the purview of Atma Nirbhar Bharat initiative as the solar equipments market in India is currently led by Chinese firms. With proper steps taken in this direction, solar power generation can not only reshape the power generation landscape in India but can also be a major contributor to the self reliance initiative by creating wide ranging job opportunities and fueling indigenous solar equipment manufacturing.