Context:
In her seventh consecutive budget speech, the Finance Minister outlined measures that underscore India’s dedication to transitioning to clean energy. These measures include developing policies for pumped hydro storage and creating energy transition pathways to support nuclear energy and improve energy efficiency. However, the recent record-breaking summer heatwaves, which increased power demand, highlight the challenges posed by a growing economy and a warming climate.
Relevance:
GS3- Environmental Conservation
Mains Question:
Discuss a roadmap for investing in a cleaner, flexible, and resilient power grid that will help our economy grow sustainably and create jobs in the clean energy sectors. (10 Marks, 150 Words).
Milestones Achieved:
- For the current government, energy security and the clean energy transition have been priorities. This focus is evident from three significant milestones India has reached in the past decade.
- First, near-universal electrification was achieved through the Saubhagya scheme, with independent surveys by the Council on Energy, Environment, and Water (CEEW) indicating that about 97% of households were electrified by 2020.
- Second, the country experienced a five-fold increase in installed renewable energy (RE) capacity, making India the fourth-largest globally in RE capacity.
- Third, there was a 40% reduction in aggregate losses of power distribution companies (discoms), reaching an all-time low of about 15% in 2022-23.
Associated Challenges:
- However, India faces challenges in rapidly decarbonizing its power system while ensuring quality and affordable power for consumers. Additionally, India’s power sector must brace for stronger headwinds.
- Annual electricity demand has been growing by 7-9% each year since the COVID-19 pandemic, with peak demand increasing even faster.
- Climate change-induced weather extremes exacerbate these challenges. Discoms find it difficult to meet unplanned surges using affordable options and existing network capacity, leading to power outages.
Way Forward:
Raise Targets for Renewable Energy and Storage:
- To address these concerns, the government must raise targets for renewable energy and storage systems beyond 500 GW by 2030.
- Despite past efforts to add renewable capacity, its share in India’s power generation mix is only 13%.
- Previous power supply shortages and anticipated rising energy demand have led policymakers to consider new coal capacity.
- Instead, we should aim to increase the share of renewables in India’s power generation mix and scale up storage solutions. Renewables and storage can support peak demand, are cost-competitive, and can be built more quickly.
Accelerate the Deployment of a Diverse Range of Clean Energy Resources:
- Second, accelerate the deployment of a diverse range of clean energy resources. In 2023 alone, China added 300 GW of solar and wind capacity, while the European Union added 73 GW.
- As of March, India’s cumulative renewable capacity was 144 GW, with another 128 GW in progress. This comparison underscores the need to rapidly and extensively deploy clean resources.
- This requires tapping into the renewable energy potential in more states, speeding up grid connectivity, and ensuring access to suitable, conflict-free land for timely project commissioning. Diversifying from solar energy to other clean technologies would also help India meet its evolving demand.
Improve Energy Availability:
- Third, implement measures to improve energy availability. During FY23, only 6.3% of India’s power generation was procured through power exchanges, with the rest sourced through bilateral agreements.
- The low liquidity (volume being traded) in the power exchange presents risks of price volatility. This limits both buyers and sellers from relying on the exchange for power procurement and value recovery, thus constraining our ability to integrate renewables at scale.
- India needs innovation in bid designs to attract renewable energy developers to sell power on the exchange, along with setting up capacities for long-term contracts.
- For example, under the RE Implementation Agency-led bidding process, RE developers might be required to allocate part of the project capacities for merchant sales, in addition to the bid quantum for long-term contracts.
Effective Maintenance and Utilization of the Coal Fleet:
- Fourth, ensure effective maintenance and utilization of the coal fleet. Even as more renewables are added, coal continues to play an important role.
- CEEW’s analysis of MERIT data shows that in FY24, over 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 that year due to planned maintenance or technical faults.
- State regulators must revise norms to enable timely maintenance of the coal fleet and compensate for investments to make select coal plants flexible.
Accelerate Digitalization:
- Finally, accelerate digitalization to enable discoms and consumers to actively participate in India’s energy transition.
- Smart meters can help discoms accurately forecast power demand, improve network planning, and integrate renewables cost-effectively. Over 11 million smart meters have already been installed in India, with half located in Bihar and Assam.
- However, India is still far from its target of 250 million smart meters. Discoms need to overcome their hesitation and look to Bihar and Assam for inspiration, as they are already experiencing benefits such as reduced losses and timely bill delivery through smart metering.
- It is crucial to prioritize consumer privacy and system preparedness against cyberattacks in regulations and digitalization efforts.
Conclusion:
All eyes are on the Indian government to deliver in this critical decade. Investing in a cleaner, more flexible, and resilient power grid will help the economy grow sustainably and create jobs in the clean energy sectors.
