Why budget 2017 must think beyond solar & wind: Anand Pattani

The Indian government has set the ambitious target of 175,000 MW of installed renewable energy capacity by 2022. To succeed this goal will need current support, through policy and fiscal initiatives, extended in the 2017 Union Budget. 

Renewable energy has traditionally struggled for financial viability against thermal generation, but in India solar is becoming an increasingly viable option. A recent study by the Centre for Science and Environment recommended housing societies replace diesel generators with rooftop solar systems after calculating the cost of power generation for a diesel generator set, including the capital cost, is Rs 27 to Rs 33 per unit compared to a rooftop solar tariff of less than Rs 10 per unit. Similarly, with industrial customers often paying cross subsidies to ensure more affordable domestic tariffs, falling costs have made captive solar plants a more viable option for some businesses than taking power from the grid. 

To date, solar energy has been central to the government's renewable energy plans, capacity has increased by more than 200 percent since Narendra Modi took office. Power and Energy Minister Piyush Goyal has indicated that rooftop solar will receive further tax breaks in the forthcoming budget. The industry anticipates that around 9 GW of solar photovoltaic might be installed in 2017.

Solar alone, however, will be insufficient to meet the government's renewable energy targets. As a result, the level of policies and incentives that have helped solar mature are now being applied successfully to wind; and we expect this to continue in the forthcoming budget. 

To increase wind's tariff competitiveness the Solar Energy Corporation of India recently invited competitive bids for setting up 1,000 MW of wind power projects. Over the past five years, wind turbine generator costs have fallen by circa 20 percent. Wind generation is also being supported by government subsidies for repowering, ie the replacement of older low capacity turbines with new higher capacity equipment, and halving the excise duty on carbon pultrusions used for many wind turbine components.

Wind and solar are intermittent sources of electricity, a challenge being addressed by rapid advances in the cost and efficiency of large-scale electricity storage technology. By combining various intermittent renewable energy sources with advanced electricity storage and distribution technologies we can create microgrids. 

Microgrids have the potential to support both the Smart Cities Mission and plans to bring electricity to the 200 million Indians – mostly in rural communities - currently unconnected to the grid. Last June the government proposed the development of 10,000 renewable microgrids and mini-grids with a combined capacity of 500 MW. Challenges exist however, in terms of funding and viability due to the price differentials with state discoms. This is an area the forthcoming budget could take steps to address. The government needs to re-emphasise and expedite the ambitious Green Energy Corridor programme to convey renewable electricity and strengthen renewable energy infrastructure.

Waste to energy (WTE) has huge potential as a source of renewable energy and, because it is independent of the weather, is not intermittent like wind and solar. Currently seven WTE projects are operational, generating 92 MW, with 30 projects under implementation - which will enhance capacity by 241 MW on completion. More than 150 MW capacity of additional WTE projects are in various stages of tendering. In addition, the nodal agencies of states such as Punjab and Haryana have announced biomass based projects for participation by developers. Once this capacity comes on stream, India’s WTE capacity will go up by six-fold. 

While the government is giving Rs 15,000 crore to municipal corporations over the next three years under the Swachh Bharat Mission for cleanliness, waste-management and waste-to-energy projects, an increased allocation or a dedicated fund for such bio-power projects would serve to meet the goals of increased energy from renewable sources and a cleaner India. 

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Anand Pattani is the country manager & managing director of Black & Veatch India