Content from the Brookings Institution India Center is now archived. After seven years of an impactful partnership, as of September 11, 2020, Brookings India is now the Centre for Social and Economic Progress, an independent public policy institution based in India.
- Renewable power has become a significant component of the energy portfolio and has generated considerable interest. However, there are still concerns for Renewable Energy such as location-specificness, cost, and variability.
- India has a capacity problem, and not just an energy problem. We are unable to provide for consistent power throughout the day especially during peak times where regular load-shedding takes place.
- Pricing is a sensitive issue for India – we cannot transfer on high prices to the people. What can be done is to look at options which can provide cheaper power today and let prices gradually escalate to remain within grid parity.
- Storage is critical to the renewable energy process, particularly because power from renewables does not come during India’s peak demand hour (7pm). There are currently 6 pilot programs underway by MNRE to study storage processes.
- The Make in India program has facilitated the creation of jobs through internalising manufacturing in the energy space, however, more still needs to be done for human resource development.
- Renewable Energy cannot be viewed in isolation from the rest of the grid, and changes in T&D, despatch, pricing (with Time of Day pricing), etc. are part and parcel of making RE sustainable in India.
On the 8th of January 2015, Brookings India launched an edited book “Blowing Hard or Shining Bright? Making Renewable Power Sustainable in India”. The book was launched by H’ble Piyush Goyal, Minister (IC) for Power, Coal, and New and Renewable Energy, and attended by key government officials, industry leaders, academics and media.
Renewable power has become a significant component of the energy portfolio and has generated considerable interest. This edited book aims to start a dialog on making renewable power sustainable in India. Sustainability does not only mean the environment, but also factors in economics and equity. The book aims for a nuanced look at issues of finance and economics, grid integration, regulation, states’ roles, consumers, innovation, etc.
Renewables used to be described as the future, and though that future has now arrived, there are still concerns that remain for renewable energy (RE). Global challenges of cost, variability, and location-specificness hold true, but in addition India is different from the rest of the world in terms of RE. Winds speeds are lower compared to other parts of the world, whereas solar resources are good. However, we are unable to provide for consistent power throughout the day especially during peak times where regular load-shedding takes place. India has a capacity problem, and not just an energy problem. The book digs deep into the concept of grid balancing as one the recommendations, as well as realistic examinations of the economics of renewable energy.
Current state of policy for renewable power in India
The Ministry of New and Renewable Energy is a 32 year old Ministry in the government, however, there is still a need for a lot more intellectual contribution/inputs in the field of renewables. MNRE currently has three national institutions dedicated to the study of renewable power – The National Institute of Solar Energy, The Institute of Bio-energy, and The National Institute of Wind Energy. There are plans in place to start up a national institute of new energy, because the focus has been increasingly on well-known renewables and not other new forms of energy. There is a need to have R&D to be more focused on innovations for new and renewable energy
The books deals with questions that the ministry is currently grappling with, especially keeping in mind the ambitious targets for solar power (100,000 MW by 2022, a 60+% compound annual growth rate). Improved policies can help harness RE, and experience from other countries shows that a larger share of RE is feasible, though with effort and investment in grid management.
For example, Germany uses various algorithms and organisations to come up with statistical analyses of forecasting errors and consolidates them into one. The resulting forecasting error for Germany is reported to be 3% for wind and 7% for solar. India on the other hand, faces scheduling challenges for wind, as our forecasting error is over 30%. India is currently putting software in place to reduce forecasting errors to reduce scheduling challenges.
India has not been able to truly factor in the long-term costs of energy that the country is consuming today. Certain factors of energy pricing have not yet found the right amount of traction and appreciation from policy makers. Pricing is a sensitive issue for India – we cannot transfer on high prices to the people. What can be done is to look at options which can provide cheaper power today and let prices gradually escalate to remain within grid parity. In order for this to take place, we need to re-evaluate the investment lifecycle for power.
The mission for this current government is to increase solar capacity to 100 GW, and to reinvigorate wind power. This can be done in terms of R&D to overcome the challenges in the renewable sector. Storage is also critical to the renewable energy process, particularly because power from renewables does not come during India’s peak demand hour (7pm). There are currently 6 pilot programs underway by MNRE to study storage processes. Transmission and distribution is another critical and essential element, therefore, we can have wind and solar working together, as well as expand renewables around coal-based stations. There are plans underway to green all islands, Andaman and Nicobar and Lakshadweep, as well as the launch of Green Energy Commitment Certificates.
Currently there is a mismatch between coal mining and the transportation of the coal to the required place. The ministry has created a framework to provide for the rationalisation of linkages which will save approximately 6,000 crore rupees, by reducing the average transportation of every ton of coal India produces by over 100 km – which would be 50,000 million ton-km transportation being reduced for coal.
With regards to job creation and skill development through renewable energy, the Make in India program has facilitated the creation of jobs by internalising manufacturing. However, further action is necessary to meet the human resource requirement that comes with the targets for RE set by the Government. Another concern is the financing of these targets – the purchasing entities must be made strong thereby resulting in the money coming from various sources and not just one. Ultimately funds have to come through sources where the credit ratings of projects is acceptable, which can be through credit enhancements, or through multilateral funding
Ultimately, Renewable Energy cannot be viewed in isolation from the rest of the grid, and changes in T&D, despatch, pricing (with Time of Day pricing), etc. are part and parcel of making RE sustainable in India. This also extends to a minimization if not end of load-shedding, and a re-think of retail tariffs with subsidies, which if not clarified, would have some consumers seeing RE only as a means of exiting the grid, instead of RE participating in a holistic, sustainable grid.