Table of Contents
THE CONTEXT: India’s Finance Minister, in her seventh consecutive Budget speech, reaffirmed the nation’s commitment to a clean energy transition, highlighting initiatives in pumped hydro storage, nuclear energy, and energy efficiency. These measures are crucial as India grapples with the dual challenges of a growing economy and the impacts of climate change, such as record-breaking heat waves that have driven up power demand.
THE ISSUES:
- Raising Renewable Energy and Storage Targets: Despite efforts to increase renewable energy capacity, renewables account for only 13% of India’s power generation mix. The government aims to exceed 500 GW of renewable energy capacity by 2030. Policymakers have often added new coal capacity to meet rising energy demand, which contradicts the goal of increasing the share of renewables.
- Faster Deployment of Diverse Clean Energy Resources: In 2023, China added 300 GW of solar and wind capacity, while the European Union added 73 GW. In contrast, India’s cumulative renewable capacity stood at 144 GW as of March 2024, with another 128 GW in the pipeline. India needs to expedite the deployment of clean energy projects to meet its renewable energy targets and reduce reliance on coal.
- Improving Energy Availability through Power Exchanges: Only 6.3% of India’s power generation was procured through power exchanges in FY23, leading to price volatility and limited reliance on exchanges for power procurement. Innovations in bid designs and setting up capacities for long-term contracts are needed to attract renewable energy developers to sell power in the exchange.
- Effective Maintenance and Utilization of the Coal Fleet: Coal remains crucial, generating about 80% of the power during non-solar hours in FY24. Over 40 GW of coal capacity was unavailable nearly 60% of the time due to maintenance or technical faults. State regulators should revise norms for the timely upkeep of the coal fleet and compensate investments to make select coal plants more flexible.
- Digitalization to Empower Discoms and Consumers: More than 11 million smart meters have been installed, with significant benefits observed in states like Bihar and Assam. The target is to install 250 million smart meters to enable accurate power demand forecasting, better network planning, and cost-effective integration of renewables. Ensuring consumer privacy and system preparedness against cyberattacks is crucial.
- Investing in Infrastructure and Clean Energy Finance: To support the clean energy transition, significant investments are needed in transmission networks, evacuation infrastructure, and energy storage systems. Achieving net-zero emissions by 2070 will require an estimated USD 15 trillion investment.
THE WAY FORWARD:
- Raising Renewable Energy and Storage Targets: The government should raise the renewable energy and storage targets beyond 500 GW by 2030. This aligns with the International Energy Agency’s (IEA) recommendation for India to meet 50% of its electricity requirements from renewable sources by 2030. Emphasize the development of battery storage systems, such as the 4,000 MWh capacity under the Viability Gap Funding scheme announced in the Union Budget 2023-24. China added 300 GW of solar and wind capacity in 2023 alone, showcasing the feasibility of rapid RE expansion.
- Faster Deployment of Diverse Clean Energy Resources: Encourage states with high RE potential, such as Rajasthan and Gujarat, to expedite projects. The 2024 Indian States’ Electricity Transition (SET) report highlights Gujarat and Karnataka as top performers in integrating RE. Implement policies to ensure conflict-free land acquisition for RE projects, like the Ultra Mega Renewable Energy Parks initiative. Invest in other clean technologies like wind, hydro, and nuclear energy to diversify the energy mix and meet evolving demand.
- Improving Energy Availability through Market Innovations: Develop innovative bid designs to attract RE developers to sell power in exchanges. For instance, requiring RE developers to build part of their merchant-sale project capacities can enhance market liquidity. Establish capacities for long-term contracts to stabilize prices and ensure reliable power supply.
- Effective Maintenance and Utilization of Coal Fleet: State regulators should revise norms to enable timely upkeep of the coal fleet and compensate for investments to make select coal plants flexible. While adding more renewables, ensure that coal plants are maintained efficiently to support the grid during peak demand.
- Fast-Tracking Digitalization in the Power Sector: Accelerate the installation of smart meters to enable discoms to forecast demand accurately and integrate renewables cost-effectively. Ensure regulations prioritize consumer privacy and system preparedness against cyberattacks.
THE CONCLUSION:
The Indian government must deliver a cleaner, flexible, and resilient power grid in this critical decade. Such investments will support sustainable economic growth and generate employment in the burgeoning clean energy sector.
UPSC PAST YEAR QUESTIONS:
Q.1 The setting up a Rail Tariff Authority to regulate fares will subject the cash-strapped Indian Railways to demand subsidies for the obligation to operate non-profitable routes and services. Considering the experience in the power sector, discuss if the proposed reform is expected to benefit the consumers, the Indian Railways or the private container operators. 2014
Q.2 Should India continue expanding its nuclear energy program with growing energy needs? Discuss the facts and fears associated with nuclear energy. 2018
Q.3 Access to affordable, reliable, sustainable, and modern energy is the sine qua non to achieve Sustainable Development Goals (SDGs). Comment on the progress made in India in this regard. 2018
MAINS PRACTICE QUESTION:
Q.1 Highlight the challenges faced by India’s power sector in meeting rising energy demands and decarbonizing the power system. Suggest additional strategies to overcome these challenges and ensure a sustainable and resilient energy future for India.
SOURCE:
https://www.thehindu.com/opinion/op-ed/powering-indias-future/article68488195.ece
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