Editorial of the Day (10th Feb): Meeting Renewable Energy Goals

This editorial covers India's commitment to becoming greenhouse gas (GHG) neutral by 2070 involves significant expansion in renewable energy (RE), targeting 500 GW by 2030.

Table of Contents

Context: India’s commitment to becoming greenhouse gas (GHG) neutral by 2070 involves significant expansion in renewable energy (RE), targeting 500 GW by 2030.

Progress and Policies for Renewable Energy

RE Expansion: India aims for 500 GW of RE by 2030, with progress including 72 GW of solar and 44 GW of wind power.
Power Purchase Agreements (PPAs): These projects typically involve 25-year power purchase agreements with state distribution companies (discoms).
Commercial and industrial (C&I) Capacity: An additional 32 GW has been added in commercial and industrial capacities.
“Must Run” Status: RE projects are given priority for power evacuation, barring safety concerns.
Supportive Measures: Include late payment surcharge waivers, interstate transmission waivers, and renewable purchase obligations.
Cost Reductions and Investment: Capital cost reductions, competitive bidding, and foreign investment have supported RE growth.

Challenges for Renewable Energy

Storage and Network Needs: Achieving the 500 GW target is challenging without adequate storage and extensive power exchange networks.
Surging Demand: Post-COVID demand increases and peak deficits, particularly during evening hours, pose challenges.
Discoms’ Hesitancy: There’s a shift towards long-term PPAs for solar and wind to meet the growing demand and deficits.

Market Trends

RE Reliability: Recent bids require RE generators to match hourly demand, making RE comparable to coal in reliability.
FDRE Bids: The introduction of firm and dispatchable RE bids by SECI necessitates a mix of solar, wind, and storage.
Storage Solutions: Pumped hydro is crucial for grid stability due to lower capital costs, with batteries also becoming important.

We’re now on WhatsApp. Click to Join

Solutions and Strategies for Renewable Energy

Managing Intermittencies: Generators need to manage intermittencies with storage solutions like batteries, which may become more affordable due to incentives.
Excess Generation: Selling surplus power to C&I consumers or on power exchanges could address excess generation.
Merchant Sales: Trading excess generation requires structures for guaranteed floor prices to ensure bankability.
Central Agency Guarantee: A central agency could offer guarantees to enhance project competitiveness and support green hydrogen ambitions.