The Renewable Energy Growth Opportunity

Context: Recently, the Prime Minister said that India’s green energy plan would generate business prospects worth $20 billion annually for the foreseeable future.

Challenges: With rising Renewable Power (RP) obligations and falling solar tariffs, power distribution companies seem hesitant to enter into long-term power purchase agreements (PPAs) with RP producers.

• Without requisite PPAs, RP developers would find it hard to raise funding.

Steps Needed to Achieve Renewable Power (RP) Target:

• Proactive measures to better integrate RP with the electric grid: since RP generation from solar or wind capacity is intermittent and variable.
  • Install flexible thermal power generation and increased hydroelectric capacity as a backup for grid security and stability.
• Need for clear-cut incentives and time-of-day tariffs: using digital metering, to fast-forward RP grid integration; for e.g. noon-time charging of electric vehicles, usage in fields.
  • Disincentivise power consumption during evening peak hours, and boost efficiency in peaking gas-powered plants.
• Investment in new evacuation capacity for RP capacity: including smart grids and dedicated green corridors.

Conclusion: To rev up new renewable energy capacity worth ?1.5 lakh crore in the medium term, money, as well as intelligent planning and execution, will be needed.