The process to substantially alter India’s future energy mix seems to have begun. This is very good news for renewables. Prime Minister Narendra Modi re-iterated India’s current target of installing 175 GW of renewables by 2022 at the United Nations General Assembly last week. This would then be equivalent to almost 20% of India’s power generation. Over and above this, and in the context of India’s Intended Nationally Determined Contributions (INDCs) for the climate negotiations in Paris, the target could be raised to a stunning 250 GW of solar and 100 GW of wind power capacity by 2030, which when added to other renewables would be equivalent to nearly 40% of power from renewables by 2030 (refer).
- Successfully implementing such targets would mean decades of growth for the solar sector
- The underlying premise of these ambitions is the belief that storage and smart grid technology will become economical and ready for implementation over the next five years
- India needs to start thinking about storage technology for large scale integration of renewables and possibly even using storage to leapfrog grid investments for rural electrification
Key countries and blocks such as the US, EU and China have already published their INDCs and the world is now waiting for India to declare its position. A target of 40% renewables by 2030, and the corresponding de-carbonisation of India’s growth, would give the negotiations momentum and India a very strong position in them. An even bolder step could be to follow the advice of the country’s Chief Economic Advisor, Arvind Subramanian, and drop demands for climate equity in favour of concentrating on a climate solution (refer). This, however, seems unlikely.
These announcements further strengthen the Indian solar story, which is already driven by strong growth in new installations (see our recent India Solar Map for details, refer). Successfully implementing such targets would mean decades of growth for the sector. However, the underlying premise of these ambitions is the belief that storage and smart grid technology will become economical and ready for implementation over the next five years. During his ongoing visit to the US, the Prime Minister visited Tesla and met with corporations such AES to understand the possibility of India using storage technology for large scale integration of renewables and possibly even using storage to leapfrog grid investments for rural electrification.
In a town hall meeting yesterday hosted by Facebook, the Prime Minister used an analogy that the country is not like a scooter than can turn around swiftly but like a train that will turn slowly. This is also true for India’s power sector. Changing the energy mix is a herculean task and the transition will surely be slow. The economic fundamentals for an increased share of renewables are already falling into place and legally binding climate commitments can only help.
Last week, Solar Energy Corporation of India (SECI) announced new allocations for 440 MW in Uttar Pradesh under the Viability Gap Funding (VGF) route. Earlier, two tenders for 500 MW and 100 MW were announced by NTPC in Karnataka. Out of this, the 100 MW tender has a domestic content requirement. The total capacity of open state and central tenders in India now stands at 5,320 MW in addition to total capacity under execution of 8,707 MW.