India is a growing economy and the growth needs to be fuelled by the right mix of energy. As compared to the Western countries, India’s growth needs to be environment-friendly, which is a challenging proposition.
Presently we are witnessing 7-10% rise in demand for electricity every year. To this end India has targeted 450 GW renewable capacity by 2030 predominantly through solar power. Target for 2022 is 175 GW renewable power of which 100 GW is through Solar and balance through Wind and other renewable sources. Of this 60 GW is planned through large-scale or utility projects and other 40 GW through rooftop projects.
As can be seen from the targets set, the Government has a clear focus on solar energy and rightly so as India is a solar-rich country. Almost entire country receives enough sunlight to make solar projects viable. In addition to utility scale and ground-mount captive projects that are coming up across the country, solar PV (Photo Voltaic) is also very promising in decentralized power. In general, solar PV is known to be cleanest source of energy as it’s “energy payback” is of ~3 years. This means that a typical solar PV project generates 5x – 7x the energy during its lifetime (of 20+ years) than the energy that was consumed in complete project construction including manufacturing, logistics, operations & maintenance, replacement etc. of all the components. Other renewable technologies are sustainable too but have a higher “energy payback” ranging from 5 to 7 years.
In commercial terms the major benefit is the least cost of power generation from solar PV as compared to other sources of power. Reduced AT&C (Aggregated Technical & Commercial) losses (aka T&D losses) due to generation-load proximity is another advantage of rooftop solar. In addition to being beneficial towards National growth, such projects for industrial and commercial consumers are also incentivized by various State Governments. Net-metering, waiver of capacity and behind the meter, capital subsidy (residential) are some such initiatives encouraging rooftop installations. It is no surprise that several manufacturers are taking advantage of rooftop installations and bringing down their cost of production.
It is also important to note the recent developments in Green Hydrogen and policy announcements for the same. Top companies such as NTPC, L&T, Reliance, ONGC are heavily betting on Green H2 and Green ammonia (NH3). The process for generating hydrogen through electrolysers will need to be powered by renewable energy sources. With waiver of power transmission and distribution charges (including inter-State charges) there would be several solar projects coming up in high radiation areas of Western and Central India.
At a macro level it is absolutely in the interest of India and the Economy to add 300 GW plus solar capacity by 2030.
This will result in –
- Nearly 45% drop in carbon foot print from 2020 level.
- Reduction in power cost by 8-10% reversing the rising trend and making economy competitive.
- With falling storage cost solar energy use will be extended by at least 3 hours to cover high evening demand.
- Agriculture load shall be shifted to solar by quick installation for pumps.
- Spin off benefits will be
- Meeting/exceeding climate control commitments
- Improved air quality and less health problems
- Reduced import Oil and Gas bills
- Competitive Green Hydrogen – convert 50% of current hydrogen demand (6MT/year) to green hydrogen.
- India should become global hub for competitive Green Hydrogen.
Although it is likely that we will miss our 2022 solar target, it is heartening to see that the achievement of 3x of 2020 target set in 2010 under NSM (National Solar Mission). As of June 2022, India stands at ~53 GW of installed Solar project. Utility scale projects account for 85% of such installations and balance are small-scale rooftop projects. With another 6 months to go this number could go up by another 20 GW+ as there are several projects under development and new ones expected to come up. The only caveat – certain policy implementations restricting Chinese imports. India still depends heavily on Chinese imports primarily for PV cells (raw material) and modules (final product). Import duty on cells would make Indian modules expensive too as majority of them still use imported cells in their modules. Tier-1 Chinese manufacturers are also the preferred choice by several Indian developers and investors due to quick availability of advanced technology and higher capacity modules. Domestic manufacturing in India cannot cater to the burgeoning demand in case of complete ban which is likely to come in by 01st October 2022, putting brakes on the Solar momentum in the Country. Ideally such restrictions should come in place once domestic manufacturing is able to meet the domestic demand and the surplus can be exported to make our country self-sufficient.
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