top of page

Clean Energy : A Global Governance Initiative Policy Whitepaper

Updated: Jul 28, 2023



If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.


 

1. Introduction

Clean energy is defined as energy that is produced using renewable, non-polluting, zero-emission resources and includes energy that is conserved through energy-saving practices.


This paper elucidates more on clean energy bound in the Indian Origin. India's energy mix is dominated by coal, which accounts for 55% of all primary energy production. Natural gas's contribution to the production of primary energy has significantly increased over time, whereas oil's contribution to the production of primary energy has fallen.



1.1 Coal Supply

1. At least 84,396 million tons of known recoverable reserves of coal are present in India. According to the current Reserve to Production (R/P) ratio, this equates to roughly 8.6% of the world's reserves and could last for 230 years. In contrast, at the current R/P ratio, the world's confirmed coal reserves are predicted to last just 192 years.


Reserves/Production (R/P) ratio: The result of dividing the amount of reserves left at the end of the year by the amount of production in that year is the amount of time the reserves would last if production stayed the same. India ranks fourth in the world for lignite and coal production. In these states, coal production is concentrated (Andhra Pradesh, Uttar Pradesh, Bihar, Madhya Pradesh, Maharashtra, Orissa, Jharkhand, West Bengal)


1.2 Oil Supply

Around 36% of India's entire energy usage is made up of oil. India, one of the top 10 oil-consuming countries in the world today, will soon surpass Korea to become Asia's third-largest oil consumer after China and Japan. Compared to the present peak demand of over 110 million tons of crude oil, the country's annual crude oil production peaked at roughly 32 million tons.


70% of India's crude imports come primarily from gulf countries. Transport consumes 42% of all petroleum products, followed by home and industrial use at 24% and 24%, respectively.


1.3 Natural gas supply

8.9% of the nation's energy usage is made up of natural gas. Now, there is a gap between the 67 mcmd of available natural gas and the demand of roughly 96 mcmd. The estimated amount of natural gasreservesis660 billion cubic meters.


1.4 Nuclear power supply

In India, nuclear power produces around 2.4% of the country's electricity. The construction of more nuclear reactors has also been authorized.


1.5 Hydro power supply

About 15% of India's large and practical hydro power potential has been use to generate electricity as of yet. 25% of the nation's total generated units came from hydropower, a continually declining percentage. At a 60% load factor, the potential is estimated to be 84,000 MW.


2. Energy Crisis


In India, thermal power plants are experiencing shortages despite rising coal production. In October 2021, India experienced a comparable energy crisis; however, given that peak power consumption is anticipated to climb owing to rising temperatures, the current problem may be worse.


High worldwide thermal coal prices (coal prices have climbed by nearly 350% year over year), interruptions in coal supply primarily due to severe rains, high demand for coal (coal demand has increased by 9% over the previous year), and rising temperatures are all factors.


The question that arises is how critical is this situation?


The situation at thermal power plants is getting worse and is deteriorating consistently. According to the National Power Portal, critical inventories were present for both local and imported coal-based (ICB) power plants.100 of the country's

total 173 thermal power plants have coal stock problems that are critical, according to the Central Electricity Authority report.


In comparison to the daily demand of 2.76 MT, the totalamountofstocksavailablewas23.17million tons(MT).At this price, stocks will expire in less than nine days.


Gujarat and Maharashtra, for example, have already announced load shedding (the deliberate shutdown of electric power in a part or parts of a power-distribution system, generally to prevent the failure of the entire system when the demand strains the capacity).


Why does this crisis keep happening each year?


The main cause is a lack of coordination between the different ministries engaged in the process, including the ministries of power, coal, and railways.


The Coal Ministry accuses the Indian Railways of being at fault for the shortage of sufficient rakes.


Similar to how the Railways did, Coal India was criticized for improperly loadingand unloading rakes.


Similar to how the Railways did, Coal India was criticized for improperly loading and unloading rakes. miners, the supply at powerplants hasn't exceeded 15days in the past six months.


3. Transmission and Distribution of RE


Electricity distribution and transmission are two untapped tools for the shift to renewable energy. Rapid urbanization and industrialization have increased energy demand, and lowering carbon emissions are necessary to sustain the climate at its pre- industrial levels. Increased transmission and distribution networks are required to meet the growing demand for energy produced from cleaner sources. By doing this, together with improved grid connectivity, we can reduce the erratic nature of renewable energy sources and build more reliable networks. electricity generation and distribution are both crucial because when there is an inadequate distribution network, excess electricity is restricted.


The transmission subsystem and the distribution subsystem, which are primarily characterized by differing voltage levels, can be considered two major subsystems of the infrastructure used to transmit energy. Electricity generated at central stations is largely delivered to places near load centers through the transmission subsystem, often known as the bulk power system. In India, the highly meshed transmission network typically runs at voltage ranges between 33 kilovolts (kV) and 765 kV. The distribution subsystem, which transports energy from load centers to customers, works at voltage ranges between 11kV and 120 V and is primarily radial in design.


Shortcomings in the Current System




1. The unidirectional flow of electricity from power plants to consumers was a sign of the centralization of traditional systems. To meet the needs of the transmission system, planning for a power system and for extending transmission functions has been carried out, primarily based on previous and predicted loading levels, which have generally been predictions of future demand. Integrated transmission losses and consumers' dependency on the central grid are drawbacks of this setup.


2. The performance and dependability of the power grid will be significantly impacted by the growing penetration of renewable renewables. Wind and solar energy in particular exhibit high levels of fluctuation and intermittency, making it impossible to predict with precision when they will be available. In India, the state-by-state penetration of renewable energy varies greatly. Tamil Nadu, Karnataka, Gujarat, Rajasthan, Andhra Pradesh, Maharashtra, Madhya Pradesh, Telangana, Punjab, and Kerala are India's ten renewable energy-rich states; their percentage of solar and wind energy is much higher than the country's average of 8.2%. In Karnataka, solar and wind power generates about 29% of the state's yearly electricity, 20% in Rajasthan, 18% in Tamil Nadu, and 14% in Gujarat (2020–2021). States in India that are abundant in renewable energy already have a larger proportion of variable renewable energy (VRE) than the majority of other nations do. As a result, system integration issues are already present in several states.


3. The 'must-run' status of renewable energy, which requires power distribution companies to use solar or wind energy whenever it is generated and reduce the same amount of power generation from non-renewable sources, has been one of the biggest problems with renewable energy in India. Because there is no system in place to minimize non- renewable sources in coordination with varying renewable energy sources like wind and solar energy, this creates a problem.


4. The amount of fuel burned in gas and coal power plants can be regulated in response to the demand for electricity. The production of solar and wind energy varies, though. The sun doesn't shine at night, and the wind is necessary for turbines to spin. This can lead to an imbalance between supply and demand. Utility companies won't be able to swiftly increase supply by burning additional fossil fuels as renewable energy sources increasingly dominate the energy mix. Consequently, a future grid that relies on a frequently erratic supply of energy from renewable sources will need to be far more flexible to make up for this.


5. In contrast to the west, where reserve margins are normally between 15 and 20 percent, India's grid is extremely weak and unstable, and there is a deficiency in the grid that is nominally at 5 percent but is much higher. Even the Grid Code is stingy, advising (but not requiring) a 5% margin. Massive "load-shedding" is used to keep the grid operational. (feeder-level cutouts of supply). Since grid-tie inverters are built to shut down during outages or faults, for safety reasons, such load shedding even affects choices like rooftop solar. However, if the grid is severely disrupted, rooftop solar's economics suffer greatly as a result of the lack of an energy supply.



4. Essential Factors in Modern Power Grids




While designing modern power transmission and distribution networks following factors must be incorporated:-


  • Scalability of Network Topology

The performance of the entire network during disruptions will be strongly impacted by network topology, as well as total transmission losses. The variety of potential power-flow configurations will be very wide if the network contains a very high number of power sources. (Hecker et al., 2009). There will be chances to create networks that can outperform conventional networks, even if this will make the performance and reliability issues much more difficult.

  • Transmission Architecture

The fundamental goal of historical transmission networks was to move energy from relatively close-by generation sources to load centers (i.e., within a 500 km radius). This goal has changed

under deregulation to encompass far greater operating power levels over much longer distances (e.g., > 1,000 MW across 1,200 km or more). It will be crucial for planners to capitalize on the geographical diversity among renewable resources given the expected renewable energy portfolio and the level of variability from wind and solar sources. A substantial high-voltage backbone might be required to enable a balance.


  • Optimal Storage



Many renewable energy sources need energy storage, like lithium-ion batteries or pumped-storage hydro plants, for best utilization. According to an analysis by the Lawrence Berkeley National Laboratory, battery storage used in conjunction with solar farms can be a more affordable alternative to pumped- storage hydro retrofits for morning peaks or evening ramps requiring less than six hours of storage. When building the best storage systems, the following elements must be taken into account:

  • Type of storage: compressed air, molten salt, fuel cells with a hydrolyzer, flywheels, superconducting magnetic energy storage systems, pumped hydro storage systems, and various active and passive novel systems.

  • Power and voltage levels at the connecting point

  • Rating for energy-storage

  • The cycle's length and time profile in terms of charge and discharge

  • The storage device's precise position within the system (for example proximity to loads, sources)


  • Communications and Monitoring

The electric power grid is projected to have more functionality, efficiency, programmability, and flexibility as it develops into an increasingly automated network. The electric grid is connected to several communication networks for detecting, checking on, and controlling. The network's supervisory control and data acquisition (SCADA) systems are tightly related to these communication networks.

The energy-management systems (EMS) employ the data from the SCADA systems for a variety of system-operational tasks, including real-time control of the power grid. The SCADA network and EMS have a major role in how the system functions both under regular circumstances and in an emergency. Any disruption or dislocation in the network is largely detected by observations and analysis of the system's activity using data from the SCADA network.


5. Innovations and Recommendations




The private sector is expressing interest as a result of developments in smart grid systems, energy storage, demand response, real-time monitoring, complicated forecasting algorithms, and robust operating units as well as loose

regulatory regulations. Energy firms may better manage their non-renewable sources by purchasing renewable energy regularly. Permitting renewable energy to be utilized to satisfy energy demands during peak hours, this further aligns with the national objective to increase dependence on renewables. Every distribution firm is required to adhere to a requirement known as a Renewable Purchase Obligation. (RPO). According to this, the business must purchase a specified proportion of its energy from renewable sources; else, it must get a renewable energy certificate for INR 1.20 per kWh. Renewable energy is a lot better choice for distribution firms as well because this raises the price.



Additionally, it is crucial to make sure that the current contractual frameworks let system operators make use of the technological flexibility of the system. The full use of technology that can provide flexibility can be hampered by contractual frameworks that do not permit operational flexibility, such as restrictive long-term fuel purchase contracts. Additionally, as more industries get electrified and sector coupling rises, integrated planning between the energy industry and other industries will become more crucial.



 



6. What is Solar Energy?


Solar energy is the cleanest and most abundant source of renewable energy available on our planet. Modern solar technologies can harness this energy for a variety of uses- including generating electricity, providing light or a comfortable interior environment, and heating water for domestic, commercial, or industrial use.


6.1 Evolution of Solar energy in India


India is one of the most abundant recipients of sunlight throughout the year due to our favourable location on the solar belt (400 S to 400 N).


The country has come a long way since the launch of the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010, when India had a grid-connected solar capacity of only 18 MW. Solar power installed capacity has since increased exponentially. Between 2014 and 2023 alone, installed solar capacity has increased over 24 times from 2.6 GW to 64 GW.


This shift has led to significant benefits, not just to the environment but also to the treasury. In the first half of 2022 alone, India saved US$ 4.2 billion in fuel costs through solar power generation, as well as 19.4 million tons of coal.


6.2 Types of solar setups


Solar plants can be classified within three broad categories:


Grid Connected: For areas already connected to the electricity grid. These systems can either be connected in a standalone capacity where they supply electricity directly to the grid (such as solar farms), or in residential or industrial areas where only excess energy is transferred to the grid.


Off-Grid: These systems are set up in remote areas which are not connected to the electricity grid and store the electricity generated on-site through batteries.

Hybrid: These systems are set up in areas which are connected to the electricity grid, however, face irregular supply of electricity. The electricity generated is stored on-site through batteries for emergency use during power cuts, and is supplied to the grid during periods of regular supply.


The layout of the solar panels can also vary depending on the geography and topography of the site. Solar panels can be set up in a variety of configurations such as:

  • Ground-based solar power plants

  • Rooftop solar power plants (located on flat, pitched and other types of roofs)

  • Double-sided solar power plants

  • Floating solar power plants

  • Mobile (or portable) solar power plants


In addition to these configurations, the solar panels can also be set up either on fixed support structures in a certain direction, or multi-axis tracking structures which have the additional benefit of moving the panels in the direction of the sun for maximum efficiency.


6.3 Benefits of Solar Energy


It is considered to be the cleanest form of energy as there are no CO2 emissions, noise pollution (generated by wind farms), disruption of natural systems (caused by hydro plants), and use 20 times less water than nuclear plants.

The energy can be stored in batteries, during periods of low sunlight, ensuring continuity in electrical supply.

Micro plants can be set up in urban and industrial areas which are not as capital intensive as other power projects and require a fraction of the time to be set up. Additionally, panels set up in domestic and industrial areas can reduce the utility bills while contributing to the grid simultaneously.

Solar panels are low-maintenance compared to wind and hydro farms, and have a life of approximately 15-25 years


7. Process of generation


There are three main ways to harness solar energy:


Photovoltaics (PVs)


These generate electricity directly from sunlight via an electronic process and can be used to power anything from small electronics such as calculators and road signs up to homes and large commercial businesses.


Solar heating & cooling (SHC) and Concentrating Solar Power (CSP) applications both use the heat generated by the sun to provide space or water heating in the case of SHC systems, or to run traditional electricity-generating turbines in the case of CSP power plants.


Solar energy is a very flexible energy technology: it can be built as distributed generation (located at or near the point of use) or as a central-station, utility-scale solar power plant (similar to traditional power plants). Both of these methods can also store the energy they produce for distribution after the sun sets, using cutting edge solar + storage technologies.


Solar Generation


The country’s plan to become one of the largest solar power markets in the world has received a massive boost as the latest estimates of its solar power potential show.


One of the most important factors influencing solar power establishment is the availability of solar radiation. The geographical location of India is beneficial for generating solar energy. There is solar radiation almost throughout the entire year and nearly all parts of India receive more than 4 kWh of solar radiation per square meter which adds up to 3000 hours of sunshine per year.

Approximately 3.2 hectares of land are required for each MW of installed solar generation capacity. Therefore India is an ideal country for development and installation of utility scale power plants because of the availability of potentially exploitable resources.



India generated around 70.24 billion units (BU) of solar power in the first nine months (9M) of the calendar year 2022. Solar generation has been on an upward trend since 9M 2018, when it hit 26.45 BU. The increase in overall solar power generation is attributed to the new capacity additions during the first nine months of the year.

Solar power projects totaling 57,705.70 MW, including over 6,000 MW in rooftop solar installations have been installed as of June 2022.


Top Solar States in India (as of Dec 2022 )



Solar Cities & Solar Parks in India 2023

One initiative promoted by the Indian Government has been the development of solar parks. Solar parks are concentrated zones, dedicated only to the development of solar power projects. This step will encourage developers to set up more solar power projects in India.


Solar Players in India-


Amongst several players participating in the manufacturing & supply & distribution of solar energy in India, Top 10 Solar power companies in India are-





  • Tata Power

  • Vikram Solar

  • Loom Solar

  • Waree Aditya Series

  • Jakson Group

  • Greentech India

  • Adani Power

  • Asun Solar Power

  • Geo Power India

  • Saatvik Green Energy


Solar Generation Targets of India






Cumulative Installed Solar Energy Capacity Increased from 6.76 GW in 2016 to 54 GW in the year 2022


Challenges faced by Indian Solar Industry


  • Despite a significant push from the government, rooftop solar installation in India has not attained desired momentum in India, especially due to the absence of lucrative ROI as solar prices are seeing north.


  • The overall cost of ownership: With cost and GST getting increased by 25% and 7% respectively in the last one year, there is dampness in the residential rooftop segment, and the cumulative installations stand less than 5GW till now. This will have a direct impact on the ROI breakeven timelines for the customers which stretches from 7 to 8 years to another few years. Then the homeowners are left to figure out alternatives to reduce their electricity bill.


  • Underdeveloped DISCOM Ecosystem: Current DISCOM ecosystem in India is built around thermal and by shifting to solar there is a fear of cost competitiveness dovetailed with T&D losses leading to impact on profit margins.

  • Import dependency: As India is looking at achieving its target of emerging global leader in the solar front, it needs to address and resolve the imports of important components like solar cells, modules, and solar inverters that the Indian solar industry is considerably dependent upon. Due to this over-dependency on imports, the industry ends up paying huge amounts of capital every year. According to data, in the first 9 months of 2021, India imported solar wafers, cells, modules, and inverters worth $1.97 billion.


  • Lack of R&D, modern development facilities and manufacturing infrastructure impact the development of solar panels, equipment and inverters to meet complete demand. This inevitably leads to an increase in imports from countries like China, Germany, etc. thereby increasing the cost of the system.


  • Solar systems require a substantial amount of investment in the beginning and have longer payback periods. This investment will not only burden the flow of investments in other energy sectors but also increases the debt. This challenge discourages many people and entities from adopting solar energy.


  • Lack of awareness amongst the general public is one of the key challenges slowing down the adoption of solar energy. Education on solar energy, especially in the rural areas of the country should be addressed more actively where the benefits, advantages and accessibility perks are taught.


  • Some of the administrative issues like ease of land acquisition, government approvals, material supply limits, etc. affect the setup of solar generation plants and thereby lead to delays in development. This can be addressed by setting up dedicated government entities that work towards solar energy implementation.


  • The overall setup warranty provided by the implementation partner is also one of the challenges that we face today. Many companies today are providing limited support and warranty for the implementation of solar panels and systems which is raising concerns for many customers


Costs of Solar Setup


Solar panel installation cost depends on the following factors:


Since there are so many factors involved, it should be well clear that the solar panel installation cost will vary from project to project.


The overall solar panel installation cost range in India is:


  • 1 KW solar system: Rs. 45,000 to Rs. 70,000

  • 2 KW solar system: Rs. 90,000 to Rs. 1,40,000

  • 3 KW solar system: Rs. 1,35,000 to Rs. 2,10,000

  • 4 KW solar system: Rs. 1,80,000 to Rs. 2,80,000

  • 5 KW solar system: Rs. 2,25,000 to Rs. 3,50,000

  • 10 KW solar system: Rs. 4,50,000 to Rs. 7,00,000



 



The Solar Pressure


Before we jump to the government of India’s domestic initiatives for promoting solar let's look at India’s international commitments on climate change and the consequent need to promote solar energy.

The Department of Environment in India was created in 1980 after the Stockholm conference motivated countries to do so. The Stockholm convention also paved the way for the creation of the United Nations Environment Programme. In 1992 India became a signatory to the Montreal Protocol. The Montreal Protocol aims to phase out the production and consumption of ozone-depleting substances, such as chlorofluorocarbons (CFCs), which are harmful to the Earth's ozone layer. India has made significant progress in phasing out CFCs, and has received financial and technical assistance from international organizations to support its efforts. The United Nations Conference on Environment and Development (UNCED) is popularly known as the earth summit 1992. The significance of the earth summit 2002 is that it resulted in the Rio declaration and the climate change convention (UNFCCC), which in turn led to the Kyoto protocol and Paris.


Agreement:


India ratified the Kyoto Protocol in 2002. The protocol is based on the Principle of common but differentiated responsibilities and is the only global treaty with binding limits on GHG emissions.


The 21st Conference of Parties (CoP) under the UNFCCC, also known as the Paris Climate change conference was held in 2015. India ratified the Paris Agreement on climate change in 2016, which aims to limit global warming to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C. India submitted its NDCs to the United Nations Framework Convention on Climate Change (UNFCCC) in 2015, which includes a target to reduce the emissions intensity of its GDP by 33-35% below 2005 levels by 2030. India is committed to achieving the SDGs, which include goals related to climate action, sustainable energy, and sustainable cities and communities.


In the background of all the International commitments, India is moving towards a more sustainable future. To achieve this future, a clean energy transition is a must. One of the most important pillars of this transition will be Solar Energy. India being a tropical country can and is, leveraging its geographical position to its advantage. India has the required technical human resource too. Moreover as the population and economy grow the energy demand is set to rise sharply this is an opportunity to create an economy of scale in the solar sector, thereby reducing prices.

India also needs to deal with the problem of import dependence and manage its fiscal deficit. Currently, the import burden and its geopolitical ramifications are huge.

This problem can be solved by leveraging solar power.



Source: pib.gov.in




Ministry of New and renewable energy has launched PM KUSUM(Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan). The scheme intends to help farmers by installing solar pumps and grid connected solar and other renewable power plants in the country. The scheme would ensure that sufficient local solar/ other renewable energy-based power is available for feeding rural load centres and agriculture pump-set loads, which require power mostly during the daytime.

The Scheme consists of three components:

  • Component A: 10,000 MW of Decentralized Ground Mounted Grid Connected Renewable Power Plants of individual plant size up to 2 MW.

  • Component B: Installation of 17.50 lakh standalone Solar Powered Agriculture Pumps of individual pump capacity up to 7.5 HP.

  • Component C: Solarization of 10 Lakh Grid-connected Agriculture Pumps of individual pump capacity up to 7.5 HP. (Source: The Hindu)


Challenges in land acquisition for Solar projects:


Growth and development in renewable energy (RE) power generation call for acquiring more suitable land to install RE generating equipment/machinery, and this has raised concerns amongst different stakeholders.


The expansion of RE power generation capacity targets is causing concern over the availability of land and related issues for developing RE projects. For project developers, the key concerns are the availability of suitable land and acquisition of vast tracts of land from a number of poor rural title holders, and for the policymakers the challenge is to find the right balance between meeting targets of decarbonisation, ensuring food security, and finding viable alternatives for those displaced from the land for RE development. For poor landowners, problems include obtaining fair compensation for land appropriated for RE projects and relocating to areas where they can find alternative livelihoods.


Empirical studies suggest that most of the areas favourable to solar radiation throughout the year coincide with wasteland in India. However, most projections locate only 11-12 percent of solar projects in deserts and dry scrublands in India in most scenarios. Wasteland is also not favoured by project developers. Developing projects in wastelands increase costs partly because of the inhospitable terrain and partly because of the lack of supporting infrastructure. Transmission infrastructure required to move power generated to consuming centres also increase cost. However, the socio-economic costs imposed on small land holders as well as the ecological costs involved in diverting agricultural land for RE projects are lower.


Acquiring land from a number of small owners involves high transaction costs (temporal and financial), but both the law governing land acquisition and the discourse of development and de-carbonization favours the investor.

Millions of poor landowners and their rights are treated as collateral damage in a mission for a cleaner and better world.


The electricity when generated using solar thermal plants requited about five times the land required for coal plant and for solar PV plants the requirement would be nine times that of coal plant. Agri-Photovoltaics and integration of PV panels on road infrastructure can be ways to look into increasing the RE power generation along with the ways these can be improved to meet the demands of electricity.

Eg - For integration of PV panels with road infrastructure 21 km solar cycling track is being built in Hyderabad, India.



Investments in Solar Energy of India:


India is the 3rd most attractive country in the world for Renewable Energy Investments & Deployments.


National Adaption Fund for Climate Change was established in 2015 to support the cost of adaptation to climate change for the State and Union Territories of India that are particularly vulnerable to the adverse effects of climate change.


Recently, FM Sitharaman pledged to invest 83 billion rupees ($1billion) of central government money in electricity transmission lines which can take 13 gigawatts (GW) of renewable electricity from the sunny, sparsely- populated Himalayan mountain state of Ladakh where solar parks can be built to be used in the rest of the country.



Schemes in Solar:


Development:


1.Development of Solar Parks and Ultra Mega Solar Power Projects

Solar city per state-approved and approved setting up 59 solar parks of 40 GW across the nation. The government is also giving a push to Floating PV Projects


2.Government Producer Scheme

For setting up of 12,000 MW grid -connected Solar Photovoltaic (PV) Power projects by the Government Producers with viability Gap Funding support or self-use or use by Government/Government entities, either directly or through Distribution Companies (DISCOMs)


3.Grid Connected Solar Rooftop Program


4.Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan (PM KUSUM)


The Scheme consists of three components:


Component A: 10,000 MW of solar capacity through installation of small Solar Power Plants of individual plants of capacity upto 2 MW.


Component B: Installation of 20 lakh standalone Solar Powered Agriculture Pumps


Component C: Solarisation of 15 Lakh Grid-connected Agriculture Pumps.


5.National Program on High Efficiency — Solar PV Modules


6.National Portal for Rooftop Solar


7.Wind Solar Hybrid Policy


In 2018, national policy was announced to promote large grid-connected wind-solar PV hybrid system for efficient utilization of transmission infrastructure and land. A way to address the intermittency challenge of one source of renewable power is to combine solar and wind, achieving better grid stability. It provides flexibility in share of wind and solar components in hybrid project, however capacity of one resource must be at least 25% of the rated power capacity of other resource.


8.International Solar alliance


Current Solar Status of India:


  • India currently has a total renewable energy capacity of 168.96 GW (as on 28th February 2023) with about 82 GW at various stages of implementation and about 41 GW under tendering stage. This includes 64.38 GW Solar Power, 51.79 GW Hydro Power, 42.02 GW Wind Power and 10.77 GW Bio Power


  • Solar Parks in Pavagada (2 GW), Kurnool (1 GW) and Bhadla-II (648 MW) included in top 5 operational solar parks of 7 GW capacity in the country.


  • 59 solar parks of aggregate capacity 40 GW have been approved in India.


  • The world’s largest renewable energy park of 30 GW capacity solar-wind hybrid project is under installation in Gujarat.




Challenges in High Costs for Solar Projects:


High initial investment cost of PV technologies often leads to discouragement among developers who refrain from investing in solar PV technologies. The absence of a proper financing mechanism poses a challenge in the development of PV installations. Research indicates that the investment required for PV installations is relatively for developing countries due to a variety of factors. These factors also cause a hindrance in solar PV development in the country. Dobrotkova et al. studied the cost viability of solar PV prices in developing countries. They concluded that even though low cost of PV installations is possible, it requires the support of a variety of factors like high capacity factors, low cost of auxiliary equipment, low-risk investments etc. Their research suggests that there are concerns among experts over the process of auction-based PV procurement as they believe that auctions may lead to unviable prices that may lead to poor quality projects. The interdependency of markets and prices often leads to developers backing out of projects due to unforeseeable risks. Nowadays, although various tax exemptions have been implemented on solar PV technologies, tax still remains a hurdle in low cost solar PV development. The cost of energy produced using PV technology is measured using levelized cost of energy. The economics of solar PV generation take into consideration the factors like cost of PV panels, battery sizing, peak ratings of load, power factor required etc. These are to be borne by the consumer. These factors often increase the investment costs for installations and thus discourage consumer interest in the technology


The budget estimate for the Union Ministry of New and Renewable Energy (MNRE) for 2022-23 showed that the investment in Solar Energy Corporation of India (SECI) has been nearly halved — to less than Rs 1,000 crores from over Rs 1,800 crore.


The financial analysis of solar power projects, along with parametric and sensitivity analysis, were performed based on the techno-economic parameters of recent solar energy

projects. Factors incorporated into the study are capital cost, annual cash flow, project terminal cost, discount rate, cost of capital, tax rate, capacity factor and technological degradation factor. The results show that the values of levelized cost of electricity (LCOE) calculated for recent wind and solar projects are ₹4.89/kWh ($0.0698/kWh) and ₹4.05/kWh ($0.0578/kWh), respectively, which can be reduced to ₹2.36/kWh ($0.0337/kWh) and ₹2.12/kWh ($0.0303/kWh) through proper amendments to the existing policy, an improved financial framework and technological enhancements.


Challenges in Supply Chains for Solar Projects during Post Covid Era:


The COVID-19 pandemic has hit the Indian renewable solar and power sector, supply chains, and businesses and severely hindered the sustainable energy climate transition.


Impact on power distribution sector (DISCOMs) during COVID-19


The already stressed power distribution sector in India is going through a tumultuous period behind high accrued dues to be compensated to generators, liquidity problems due to reduced cash flow, steady low power demand, uncertain revenues due to the closure of C&I operations in the sector following the ongoing COVID-19 outbreak lockdown. The revenue deficit for the DISCOMs due to closure of C&I units during lockdown would in turn adversely impact the liquidity profile of the DISCOMs in the form of debt service reserve and undrawn working capital limits, thereby increasing subsidy requirement and lead to delays in payments to the power generation and transmission companies. The liquidity crunch will inevitably burden power generation companies.


India’s commercial and industrial sector consumes about 52 percent of electricity, followed by domestic households at 24 percent and agriculture sector at 18 percent. To make electricity affordable for the agricultural sector and domestic households, pricing by distribution utilities is set below the real costs for them. A combination of direct subsidy transfers and higher- tariff cross-subsidy is extended to the industrial and commercial sectors for filling the gap.


We expect that COVID-19 will exacerbate the financial burden on electricity utilities due to the continuous decline in power demand from C&I consumers by about 18–20 percent this year. On the other hand, a rise in demand is seen from residential consumers by about 5–7 percent. So, owing to the COVID-19 crisis, the consumer mix has changed unfavorably, thereby impacting collections and the overall tariff design. Furthermore, the Metering, Billing, and Collection (MBC) operations have been severely hampered. Drop-in sales (~20 percent during the lockdown) led to a drop in revenue from the remunerative segments (C&I), and revenue collections declined by over 80 percent, significantly affecting the financial and liquidity position of the companies. According to data sourced from the PRAAPTI portal, the DISCOMs owe INR 1077.85 Billion as of end April 2020 to the generation companies. The worst affected are DISCOMs at Rajasthan, Tamil Nadu, Uttar Pradesh, Haryana, and Maharashtra.


Government initiatives to mitigate the financial woes of DISCOMs


Before, COVID-19, there have been many attempts by the government from time to time for


financially overhauling the DISCOMs. The flagship scheme of Ujjwal DISCOM Assurance


Yojana (UDAY) launched in 2015 to fix the problems of DISCOMs under which state governments


took over 75% of the debt of DISCOMs, but this scheme was not entirely successful. So far, several


steps have been taken to tackle the DISCOMs financial woes in the wake of COVID-19. These include:


Reduction of late payment surcharge, from 1.5 percent to 1 percent per month on non-payment to generation and transmission firms until June 30, 2020.


Liquidity infusion: On top of that, the stimulus package declared by the government earmarked INR 900 billion liquidity injection into power distribution firms. The move is intended to help the DISCOMs clear their outstanding dues with electricity generation companies, which can clear their levies with suppliers.



Moratorium to DISCOMs: Because of ongoing COVID-19 emergency and enormous DISCOM debts, the Reserve Bank of India announced a moratorium in March 2020, which allowed DISCOMs to defer payments to electricity generation companies for three months.


Moratorium to consumers: Few states such as Goa, Rajasthan, and Uttar Pradesh provided moratorium to consumers for an electricity bill payment to alleviate their financial stress.


The real-time market for electricity: On June 1, 2020, the Indian Energy Exchange launched Real-Time Electricity Market (RTM). The main aim of the launch is to help DISCOMs plan their power requirements. The market, thus, will help distribution companies manage their power demand– supply variation. It will help to save substantial deviation-related penalties. Also, it effectively integrates renewables. The market will facilitate utilities to reduce their dependency on the deviation framework.


Battery Storage Energy Systems: Opportunities in India


Battery energy storage systems have been a subject of discussion for a long time, however, due to the emerging challenge of integrating large amounts of variable renewable energy into the electric grid, many organisations have recently demonstrated a keen interest to be part of this fast-developing area. There is no doubt that energy storage can play an important role in grid integration and in balancing of variable generation sources, improve power quality, reduce peak demand, enhance capacity of distribution / transmission grids, avoid/reduce deviation penalties, and minimise diesel consumption from back-up power applications.


Wind and solar power are intermittent in nature, as production is dependent on external factors like wind and sunshine. This intermittent nature of renewable energy may cause imbalance in the grid, the frequency of which needs to be maintained between 49.95Hz to 50.05Hz. To address this variability of intermittent generation, a strong need was felt for electricity storage systems and battery storage is a vital part of overall energy storage systems, as well as being a reliable and cost- effective way to balance the grid.


In a report issued in January 2020 titled ‘Optimal Generation Capacity Mix for 2029-30’, the Central Electricity Authority has envisaged a replacement of thermal-based generation with renewable energy generation, complemented by energy storage technology. This has been a key policy declaration which will influence the course of India’s energy planning methodology, highlighting a focus on integration of energy storage systems with existing and upcoming renewable energy capacity to optimise generation and transmission of power.


Previously, in January 2017, the Indian Central Electricity Regulatory Commission (“CERC”) published a staff paper on the introduction of electricity storage systems in India1. The CERC recognised that the increasing share of renewable energy in the grid has impacted the traditional approach of balancing in peak and base load management and demand and generation capacity. The solution to this challenge, as per the CERC, was energy storage systems, which could improve the operating capabilities of the grid, lower costs and ensure high reliability.


Broadly speaking, a ‘grid-scale’ battery storage can be deployed, along with thermal/ renewable energy generators, for:


  • Storing surplus energy (during low demand periods) and supply stored energy (during peak demand periods);


  • Supplement thermal generation in meeting the statutory ramp up and ramp down requirements;


  • Ancillary services as per grid requirements; and


  • Minimize unscheduled interchange (UI) and optimizing UI returns.


At present, however, there is no unified energy storage policy in effect in India, although the Ministry of Power, Government of India has (in October 2021) invited inputs from stakeholders, with the aim of formulating such a policy.





Examples of Private Companies




Private players are taking steps to bolster the domestic manufacturing of solar modules, cells, wafers, and polysilicon, and reduce reliance on imports. Reliance purchased Norway-based REC Group in October 2021 for US$771 million, which is an established manufacturer of solar modules with production facilities in Norway for making solar-grade polysilicon and one in Singapore for making PV cells and modules. Additionally, Reliance invested US$29 million in German solar wafer manufacturer NexWafe GmbH and is entering into a strategic partnership to introduce NexWafe's product in India. In July 2021, Tata Power announced that it will not develop new coal-fired generation projects and aims to achieve carbon neutrality by 2050. Similarly, JSW, another major thermal power producer, declared in the same month its plan to build 20GW of solar plants by March 2030, and will invest Rs750 billion (US$10 billion) to attain carbon neutrality by 2050.






Apart from these, there are several startups that aim to utilise solar energy to meet India’s energy needs in innovative ways.


Vayve Mobility's four co-founders are the masterminds behind India's first solar-powered electric car, Eva. The fully automatic car has a single door and is designed with the convenience of navigating through crowded cities in mind. Eva is a battery-powered vehicle with the option of a solar roof panel, which charges the battery while the car is parked in the open or while driving. According to the founders, the car can travel up to 10-12 km each day using only solar energy, accounting for one-third of fuel expenses, with an efficiency of 20 km per unit of electricity, one of the highest globally.


Indi Energy, an IIT-Roorkee-incubated startup co-founded by Prof Yogesh Kumar Sharma and Akash Soni, is developing low-cost, safe, high-performance sodium-ion batteries using agricultural waste such as paddy straw, sugarcane bagasse, coconut shells, cattle manure, and abundant materials like sodium. This approach reduces India's reliance on scarce elements like lithium, cobalt, or nickel. The founders believe that once the sodium-ion battery technology is commercialized, it can address the issue of stubble burning that endangers millions of lives each year in October and November without any relief. It will also encourage farmers to sell their agricultural waste instead of burning it.


Sanandan Sudhir, the founder of On2Cook India Pvt Ltd, created a cooking device that combines the benefits of cooking on a microwave and a stove. According to him, the product can save 70 percent of the time and 50 percent of the energy required for cooking. The cooked food retains its water-soluble nutrients while preserving color, texture, and consistency, making it a healthier alternative to traditional cooking methods.


A roof-top solar platform system, Oorjan offers solutions to set up and maintain solar panels for households and businesses and aims to take solar energy to the maximum number of people. To that end, it offers flexible design options, and most importantly, helps secure financing.






Meet The Thought Leader



Subham Rajgaria is a mentor at GGI an undergraduate from IIT Kharagpur. He is an incoming MBA candidate at HBS. He has worked at legacy firms such as Westbridge capital and Mckinsey & Co.






Meet The Authors (GGI Fellows)


SIDHI CHUGH is employed at Deloitte in the Financial Services sector of Audit Industry. She graduated from SGTB Khalsa College, University of Delhi, holding a Bachelor’s Degree in Commerce. She finds pleasure in learning about Accountancy, Finance and Consulting. She also enjoys painting and yoga (national level yoga artist), at a lighthearted pursuit.






MAAHIR VOHRA is currently an engagement manager at Goodera, a CSR and volunteering platform where he

focuses on revenue generation and client engagement. Prior to joining Goodera, Maahir was a Manager

at Global Health Strategies where he spent over 5 years years designing and implementing financing

and advocacy strategies for public health programmes in South East Asia and Africa. He has also worked extensively on conceptualising and implementing large-scale events with high-level stakeholders at Expo 2020 Dubai. Maahir holds a Bachelors degree from NMIMS, Mumbai and is an impact fellow at Global Governance Initiative. He likes to spend his personal time traveling.



ANUJ PALOD is an Economics graduate from University of Delhi currently works at Evalueserve as an

Analyst in Consulting Operations domain for his clients, who are one of the largest software

making companies in the world. He is proactively assisting the sellers and his stakeholders in

converting a lead into revenue recognition. Anuj have an inclination in the fields of Business

Development, strategy and Management Consulting therefore, he has joined GGI and currently

learning different skill sets to pivot into those roles. Apart from that Anuj is a national level athlete who loves to travel, read and meet new people from different backgrounds. Anuj aspires to become an entrepreneur.




TANVI THARAD is a CFA and a part actuary who is currently pursuing her masters in policy at Columbia University. She wants to work with women in India to abolish gender inequality and violence against women.









RAMYA is a graduate from IIT Bombay currently working as a business analyst.












MOHD. OWAIS has completed his graduation in BSc(H) Computer Science from Hansraj College ,University of Delhi after which he joined Faculty of law , University of Delhi. He is currently in his

3rd year of LLB. He takes deep interest in the areas of public policy, sustainable development,

technology and law.





ABHAY AGARWAL is an IIT Kanpur graduate working as a data scientist in an e-commerce company. He loves to read about new things and sometimes writes on his blog. He likes to travel, interact with people and

is currently working on picking new skills for next phase of his career.







SRISHTI CHAUHAN is working with The Economic Times, managing & executing projects in the Revenues segment.

She is inclined to Strategy, Project implementations, Customer Acquisiton etc.

She believes in continuos improvement both personal & professionally and likes reading, learning new skills.







If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.



 

REFERENCES


https://yourstory.com/2020/08/solar-energy-startups-innovating- renewable-space https://economictimes.indiatimes.com/industry/renewables/view

-private-sector-driving-renewable-energy-wave-in- india/articleshow/90724802.cms?from=mdr https://www.thebetterindia.com/312627/top-indian-startups- revolutionising-renewable-energy-sector/

https://india-re-navigator.com/utility/keyplayers


https://www.orfonline.org/expert-speak/solar-energy-in- india/

https://theprint.in/opinion/how-much-land-would-be- needed-to-power-a-net-zero-india-new-study- shows/730172/

https://www.investindia.gov.in/sector/renewable-energy

https://www.nabard.org/content.aspx?id=585

https://www.mercomindia.com/indias-solar-power-generation- rises-by-36-yoy-in-9m-2022


https://energy.economictimes.indiatimes.com/news/renewable/ indias-installed-solar-power-capacity-touches-57705-mw- khuba/93031778


https://ornatesolar.com/blog/top-five-states-for-solar-power- generation


https://www.investindia.gov.in/sector/renewable-energy


https://www.inventiva.co.in/stories/top-10-best-solar-power- companies-in-india-in-2023/


https://theprint.in/economy/indias-made-big-strides-on- renewable-energy-but-its-still-set-to-miss-2022-target-of-175- gw/1222231/


https://www.weforum.org/agenda/2018/01/india-added-more- rooftop-solar-power-in-2017-than-in-the-past-4-years- combined/)



https://www4.enphase.com/en-in/stories/solar-energy-india- challenges-opportunities-and-way-forward


https://dhyeyaias.com/current-affairs/daily-current- affairs/indian-solar-industry-challenges-and-scope


https://ornatesolar.com/blog/7-points-to-evaluate-the-cost-of- solar-installation-in-india-2021


https://www.solarsquare.in/blog/solar-panel-installation-cost/

https://energycentral.com/c/pip/integration-renewable-energy-national-grid-challenges-opportunities

https://www.iea.org/articles/energy-transitions-require-innovation-in-power-system-planning

https://pib.gov.in/pressreleaseiframepage.aspx?prid=1738276

https://www.investindia.gov.in/sector/renewable-energy

https://www.iea.org/reports/renewables-integration-in-india

https://www.nae.edu/19579/19582/21020/18583/18587/The-Impact-of-Renewable-Resources-on-the- Performance-and-Reliability-of-the-Electricity-Grid

https://www.investindia.gov.in/team-india-blogs/distributed-renewable-energy-india

https://www.nae.edu/19579/19582/21020/18583/18587/The-Impact-of-Renewable-Resources-on-the- Performance-and-Reliability-of-the-Electricity-Grid









395 views0 comments

Comments


bottom of page