At COP last year, India pledged to reduce the emission intensity of its industrial sector by 45% by 2030. A total of 50% of its electrical consumption will be from renewable sources.

Getting ready for this transition has taken enterprises a lot of thinking, investment, and reorganisation. MNRE (SECI) and state-level nodal agencies are rigorously working on promoting standalone solar and wind tenders, wind-solar hybrid systems, round-the-clock (RTC) power, offshore wind projects, solar rooftops, captive and group-captive distribution for commercial & industrial (C&I) sectors.

New low CAPEX and cost-competitive business models across the RE sectors are also tailoring our approach towards carbon-free consumption and a net-zero future.

Building renewable assets is a tough task; getting them to work in a short time is tougher still. At this critical, result-oriented time, it is important to strike a balance between short-term risks of uncoordinated action and long terms risks of insufficient or delayed action, says Sharad Pungalia, MD and CEO, Amplus Solar. “Large-scale mobilisation of green capital, especially in the emerging economies, is mandatory for things to move in the right direction.”

The scopes of transition are different, says Kunal Saxena, general manager, Strategic Initiatives, Amp Energy India, “It includes carbon emission while production, emissions while sourcing utilities and raw materials for production and further down streams to clients using the product.”

As of 28th February 2023, India’s total renewable energy (RE) capacity is 168.96 GW with 82 GW at various stages of implementation and about 41 GW under tendering stage. This includes 64.38 GW of Solar Power, 51.79 GW of Hydro Power, 42.02 GW of Wind Power, and 10.77 GW of BioPower. In solar, our built capacity in terms of both decentralised and distributed generation through parks, plants, and on-site installations contributes to 7% of India’s electricity generation.

Though the potential for solar and wind is immense, a lot of projects lack scalability and sustainability. The reasons are high project costs, and lack of stable market ecosystem.

In April 2022, the government imposed a 40% basic customs duty (BCD) for imported solar modules and 25% on solar cells. Further, the approved list of models and manufacturers (ALMM) order for 2023-2024 was suspended for a year.

Both the moves were intended to cut down on the import of poly-silicone wafers, the essential component to manufacture solar modules from China and provide a fillip to Indian manufacturers to achieve economies of scale and amp up indigenous manufacturing. Though this is not a long-term solution, the suspension is said to have set the pace for domestic players to close the gap between supply and demand. The Production Linked Incentives (PLI) programme is expected to further boost the long-term PV value chain (poly-silicon-ingot-wafer=cell-module).

“MNRE’s year-wise bidding plan and quarter-wise bidding calendar for the current financial year for 50 GW of renewable energy capacity annually for the next five years to achieve 500 GW by 2030 will result in an uptick in capacity addition in solar that will, in turn, be reflected in numbers soon. By the same pattern, achieving the 280GW target by 2030 would not be a challenging task,” says Sourya Choudhary, chief revenue officer-utility business, Amp Energy India, which recently won a SECI PLI program Tranche II bid to set up a 1GW capacity cell and module manufacturing facility in India.

Goutam Samanta, head, PV Technology, Juniper Green Energy Pvt Ltd says there are more points to ponder and act upon. “India does not have enough BOM capacities for cell and module manufacturing to cater to domestic manufacturing sectors currently greater than 20 GW market. The distributed solar sector on both on-grid and off-grid markets are growing at a very slow rate. The bottlenecks are off-takers and Discoms.”

Consistent policies that favour developers, consumers, and discoms, attract investment and tech transfer are essential to driving greater adoption, especially those that ease the mechanics of open access trading like the green open access & GNA initiatives. Developers are hoping the SERCs would work for early adaptation of the same.

On the commercial viability front, more than vanilla solar or vanilla wind projects, hybrids will help to meet the country’s rising utility-scale power demand. “Bundled projects can achieve 50-60 percent CUF (capacity utilisation factor),” says Pungalia.

Creating and applying tested models will help to achieve scale and deliverability. Amplus is planning to replicate its systematic RESCO (Renewable Energy Service Company) model for its green hydrogen projects too. “We plan to set up distributed manufacturing facilities under BOOT arrangement for green hydrogen consumers in the C&I sector,” Pungalia outlines the brand’s plan.

In terms of capacity and technology addition in the lucrative green hydrogen market, big portfolio companies are working to widen the market. Adani is investing in a renewable energy capacity addition of about 125 GW. L&T already has an operational green hydrogen plant in Gujarat, with a daily production capacity of 45 Kg of green hydrogen, used under captive consumption. Work is underway to increase the share of green energy trading from 7% to 25% by 2024.

Emerging distributed energy resources such as the solar PV market, battery energy storage systems (BESS), and electric vehicles (EVs) will see a substantial rise in the next few years in India’s RE landscape. However, electrification is where India’s immediate future lies.

“The government is exploring options to implement hedging through a virtual power purchase agreement (VPPA) on its exchange. With growing prosumers (consumers who produce and consume), the Indian Electricity Exchange (IEX) is exploring blockchain peer-to-peer (P2P) opportunities in energy trading. IEX has set up India’s first gas exchange (IGX) and carbon exchange (ICX) through its subsidiaries. The plan is to increase the share of Green Energy trading from its current level of 7% to 25% by 2024,” informs Samanta.

“The demand is only rising and globally markets have heavily incentivised the RE value chain. For India to have a global edge, continued stable long-term government support is a must,” Pungalia tells us.

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