(General Studies III – Environment Section – Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment. Disaster and Disaster Management.)
- India’s rapidly growing economy has driven a significant increase in energy demand. To ensure long-term stability and prosperity, there is an urgent need for sustainable energy solutions. Investing in clean energy infrastructure is crucial to meet rising demands, mitigate climate impacts, and support sustainable economic growth.
- The Finance Minister’s Budget speech highlights India’s commitment to this clean energy transition. The proposed measures include developing policies on pumped hydro storage and energy transition pathways to support nuclear energy and energy efficiency.
- However, the recent summer’s record-breaking heatwaves, which drove up power demand, underscore the urgent need for a robust and resilient energy system.
Progress in Recent Times –
The government has prioritized energy security and the clean energy transition, achieving significant milestones over the last decade:
- Near-Universal Electrification: Through the Saubhagya scheme, independent surveys by the Council on Energy, Environment, and Water (CEEW) suggested that approximately 97% of households were electrified in 2020.
- Increase in Renewable Energy Capacity: India saw a five-fold increase in installed renewable energy (RE) capacity, making it the fourth-largest country globally by RE capacity.
- Reduction in Discoms’ Aggregate Losses: There was a 40% drop in aggregate losses of power distribution companies (discoms), to an all-time low of about 15% in 2022-23.
These achievements indicate a strengthening base for the Indian power sector. However, challenges remain in decarbonizing the power system while supplying quality and affordable power to consumers.
Hindrances to the Clean Energy Transition –
- Growing Electricity Demand: India’s power sector faces several headwinds, primarily driven by growing electricity demand. Annual electricity demand has been growing by 7-9% every year since the COVID-19 pandemic, with peak demand rising even faster.
- Climate change-induced weather extremes further exacerbate these challenges, making it difficult for discoms to meet unplanned surges with affordable options and existing network capacity, often resulting in power outages.
- Limited Share of Renewables: Despite efforts to add renewable capacity, its share in India’s power generation mix is just 13%. Power supply shortages and rising energy demand have led policymakers to consider new coal capacity, which hampers the clean energy transition.
- Low Liquidity in Power Exchanges: During FY23, only 6.3% of India’s power generation was procured through power exchanges, with the rest through bilateral agreements. The low liquidity in power exchanges presents price volatility risks and restricts the ability to integrate renewables at scale.
- Maintenance and Utilisation of Coal Fleet: Coal continues to play a significant role in India’s power generation. In FY24, more than 210 GW of coal capacity generated about 80% of the power during non-solar hours. However, more than 40 GW of coal capacity was unavailable for nearly 60% of the time due to planned maintenance or technical faults.
- Digitalisation Challenges: While over 11 million smart meters have been installed in India, the smart metering drive is far from the 250 million target. Discoms need to overcome hesitation, and regulations must ensure consumer privacy and system preparedness against cyberattacks.
In 2023, China added 300 GW of solar and wind capacity, while the European Union added 73 GW. As of March, India’s cumulative renewable capacity stood at 144 GW, with another 128 GW in the pipeline. |
Measures Needed for the Clean Energy Transition –
- Raising Targets for Renewable Energy and Storage Systems: The government must raise targets for renewable energy and storage systems beyond 500 GW by 2030. The focus should be on increasing the share of renewables in India’s power generation mix and scaling up storage solutions to support peak demand, which are cost-competitive and faster to build.
- Faster Deployment of Diverse Clean Energy Resources: India must accelerate the deployment of diverse clean energy resources. Tapping the renewable energy potential in more states, faster grid connectivity, and access to suitable, conflict-free land for timely project commissioning are crucial. Diversifying from solar energy to other clean technologies will also help meet evolving demand.
- Improving Energy Availability: To improve energy availability, innovation in bid designs is needed to attract RE developers to sell power in the exchange and set up capacities for long-term contracts. This will help mitigate price volatility risks and enable better integration of renewables.
- Effective Maintenance and Utilisation of Coal Fleet: State regulators must revise norms to ensure the timely upkeep of the coal fleet and compensate for investments to make select coal plants flexible. This will ensure coal remains a reliable power source while renewables are being scaled up.
- Fast-Tracking Digitalisation: Empowering discoms and consumers through digitalisation is essential. Smart meters can help discoms forecast power demand accurately, plan networks better, and integrate renewables cost-effectively. Addressing discoms’ hesitation and ensuring robust cybersecurity measures are crucial steps towards achieving the smart metering target.
The Indian government’s commitment to delivering a cleaner, flexible, and resilient power grid in this critical decade is pivotal for sustainable economic growth. Investing in a sustainable energy infrastructure will not only support the economy but also create jobs in the clean energy sectors, ensuring long-term prosperity for the nation.