India has a large potential for electricity generation from renewables but the current exploitation is minuscule. The main constituent of electricity generation from renewables is wind energy, which contributes about 70% in terms of installed capacity. Other sources are biomass, solar and small hydro (plants with capacity of less than 25mw). For wind power, the resource-rich states are Tamil Nadu, Gujarat, Maharashtra, Karnataka and Rajasthan. For solar power, the entire country has great potential since the daily average solar incident is 4-7 kwh/m2/day. The actual potential in India as far as renewables are concerned, however, is a little debatable since estimates keep varying. For example, in the case of wind energy, though the potential of Tamil Nadu was estimated to be about 5.5gw, about 7gw is already in place, with another 2gw in the pipeline. The Centre for Wind Energy Technology originally estimated India?s potential at 45gw, then revised it to 100gw. There are other independent estimates such as that of the Lawrence Berkeley National Laboratory which pegs India?s potential at 800gw at 80 metres mast measurement. In the case of other renewables, the estimates have not been revised for long.
The growth in installed capacity for renewables in India during the 11th Five Year Plan was quite impressive. About 14,660mw fresh capacity was added, which primarily consisted of wind-based projects. While 10,260mw was from wind, nearly 2,000mw was from biomass, 940mw from solar and the balance from small hydro projects. The total installed capacity of renewables at the end of the 11th Five Year Plan was 24,503mw whereas it was a little more than 1,75,000mw from conventional sources like thermal, large hydro and nuclear. Renewables represent 12% of the total installed capacity, but contribute only 6% of energy generation. The spurt in the growth of the installed capacity of renewables in the 11th Plan can be attributed largely to the regulatory structure that is in place today, which, inter alia, has put into operation the renewable purchase obligation (RPO).
Renewable energy is said to be clean energy, which lends credence to India?s stand on carbon emissions at various international fora. Whether renewables are environment-friendly or not is debatable: wind turbines are noisy and destroy bird life; and with solar-based generation plants there are health and safety issues involved in manufacture, installation and disposal. But purely from the point of view of carbon emissions, renewable energy is superior to coal-based energy. Further, renewables have the potential to provide India some respite with respect to fuel shortages, both coal and gas. It is projected that India?s energy requirement at the end of the 12th Five Year Plan would be 1,350 billion units and that the peak demand would be around 1,96,400mw. Given coal and gas shortages, one would need to maximise energy generated from renewables.
The falling tariff rates of electricity generated from solar projects have also caused a lot of excitement. In the latest bids for the Jawaharlal Nehru National Solar Mission, the market-determined tariff was about R8 per unit as compared to about R10.39-12.46 per unit (depending upon module) announced by the Central Electricity Regulatory Commission in March 2012. Though financial institutions are apprehensive that such low tariffs are non-viable, there is no doubt that tariffs are falling and falling fast, because of lower capital cost. From R15 crore per mw about three years ago, it has fallen to R10 crore per mw today.
Though one has been canvassing for the growth of renewables in India, their growth is dependent on other factors that are not being highlighted enough. Unless these issues are addressed, renewable energy growth in the years to come will remain a dream. The first issue is of evacuation of renewable power, which needs special attention. Most of the renewable power projects get grid connectivity at relatively lower voltage levels, i.e. at 132 KV or below. This means that state transmission utilities will need to build these lines but many of these utilities are not financially healthy enough to undertake huge investments.
For example, Tamil Nadu has the largest wind-based capacity in India, touching almost 7,000mw. This accounts for almost 40% of the total installed capacity in the state. So it would require an investment of almost R4,000 crore to evacuate power from its wind-based projects. Tamil Nadu can neither absorb the full potential of its wind-based generation nor export this to neighbouring states due to a poor transmission network. In any case, the neighbouring states would not like to absorb power in excess of their RPO. Besides, long-term planning becomes difficult as forecasting is always a problem and the wind season only lasts from June to September. Induction of heavy wind power shoots up the frequency beyond the Indian Electricity Grid Code limit of 50.2 Hz and, at times, cheaper power options are left unutilised to keep the grid stable.
As it is, the renewable energy potential is located in remote areas. For example, wind potential lies along the coastal lines, small hydro power in the remote hilly areas of Himachal, J&K and Arunachal. Further, transmission projects for renewables need to be planned greatly in advance. While transmission lines may take 4-5 years to plan and construct, a renewable energy project may get constructed much earlier.
The second factor, which acts as a dampener for renewable energy?s proliferation, is its low capacity factor. This kind of intermittent power affects grid stability adversely, which requires balancing through spinning reserves. This can only be provided by pumped storage hydro plants or open cycle gas-based plants, since they have to start producing electricity instantly wherever there is shortage in generation from wind-based capacity. As we all know, the share of hydro power in India is going down steadily and, therefore, how much support the hydro stations can provide to renewables in the future is yet to be seen. In any case, the existing hydro stations provide no comfort to states like Tamil Nadu, since you cannot immediately supply power to the southern region due to transmission constraints. Tamil Nadu has to set up its own spinning reserves. No comfort can be drawn from gas-based stations either since gas is in short supply and gas plants are operating as base load plants, not in a position to provide incremental power if required. It is reported that though there is 13,000mw of gas-based capacity under construction, only 1,000mw will get gas allocation during the 12th Plan.
The National Action Plan for Climate Change targets 12% capacity from renewables by the end of the 12th Plan. This would translate into adding about 6,000mw of incremental capacity each year, which can?t be successfully implemented until a strong transmission network is created in sync with the generation plants from the renewable sector. Entire India will have to be brought under a single grid to reap the potential that lies in the southern states. Basically, investments in the transmission sector must multiply. This is especially relevant in a scenario where hydro or gas-based plants cannot be set up quickly.
The author is senior advisor, Planning Commission of India