Renewable energy (RE) is a polarising subject. Everybody has an opinion. The most informed are, of course, the scientists and engineers exploring and extending the limits of the possible. Close behind are venture capitalists and private equity players, crystal-gazing with eyes firmly focused on return on investment.
The geopolitical policy wonks air their thoughts on energy security. The socio-political ideologues also have a field day. At one end of the ideological spectrum, there are the “Drill baby, drill” fanatics. At the other end, there are the deep greens who believe cost doesn’t matter; economic development doesn’t matter; fossil fuel usage must halt.
In the midst of this, the periodic International Renewable Energy Conferences (IRECs) provide a global forum for RE players to display their wares and suss out competition. Delhi recently hosted the fourth IREC, a huge affair with over 9,000 delegates.
The DIREC was backed by the ministry of renewable energy (MNRE), partnered by Norway and Germany. It’s part of the Renewable Energy Policy Network for the 21st century (REN21) initiative. Ren 21 is an inter-governmental global policy network.
DIREC saw the usual combination of political speeches, technical papers, trade exhibitions and so on. Most of it was business as usual. Visitors got a sense of trends across a range of technologies and fuel sources.
India’s RE interests are delineated by compulsion. Energy demand is growing at over 8 per cent per year and will accelerate as per capita climbs. Current capacities are inadequate with peaking deficits in the 14 per cent range.
The MNRE estimates that India’s grid-connected power capacity must scale from 148 Gw (current) to 460 Gw by 2030. (1 Gigawatt=1,000 Megawatt=1,000 Kilowatt=1,000 Watts. Power units are calculated in multiples of 1 Kw-hr.) By 2030, primary energy demand will rise from 400 million tonne of oil equivalent (MTOE) in 2010 to over 1,200 MTOE. If the fuel mix remains unchanged, India will import 94 per cent of its crude and 30 per cent of its coal by 2030.
Power capacity must double in eight years and treble within 20. To do this, without becoming hostage to peak-oil, there must be a massive thrust on RE. Policy makers have woken up to these realities by fits and starts. The urgency has recently grown.
The RE capacity (grid+off-grid) amounts to 16 Gw. About 11 Gw is wind, mostly installed by the private sector. Major resources are now being deployed in solar. There’s also bio-fuels research and biomass generation.
“Capacity” is misleading in most RE sectors. Solar and wind usually generate around 14 to 15 per cent and 22 to 25 per cent of rated capacity respectively. So the actual RE contribution to generation is much less than rated capacity.
The incentives for investing in RE include subsidised loans and tax-depreciation breaks. In addition, preferential tariffs are offered. That outlines one problem — cost. Every unit (1 Kwhr) of solar photo-voltaic (PV) power wheeled on the grid is reimbursed at Rs 18.44. That’s about six times as expensive as thermal. Costs must reduce dramatically for solar power to go mainstream. Similar, if less dramatic, issues exist in other RE sectors with solar thermal costing around Rs 14/ unit and wind roughly Rs 6-7.
However, there’s huge potential for scaling up. The Global Wind Energy Council estimates that India has a potential 90Gw of RE capacity, including 48 Gw wind, 14 Gw of small hydro and 26 Gw of biomass. In addition, the solar potential is roughly estimated at 20 Mw per square kilometre of open, shadow-free area, implying an enormous 657 Gw across the nation.
The National Solar Mission targets 20 Gw of solar capacity by 2022, up from the current minuscule 0.06 Gw. India is also implementing the world’s largest wind resource assessment programme of wind monitoring, mapping and complex terrain projects.
Biomass, which now has 0.7 Gw capacity over 100-odd projects, uses crop wastes. Over 540 million tonne of annual crop and plantation residues could translate into 16 Gw of grid power. Another 5 Gw could be produced if sugar mills switched over to state-of-the-art cogeneration.
There are multiple technical issues with many RE sectors. Adapting gensets for biomass is tough and biomass has high carbon footprints. Wheeling “intermittents” like solar and wind onto grids is hard. Many materials and much key equipment in the solar value chain are prohibitively expensive, and IP-intensive.
Apart from technological barriers, cost and sustainability are serious issues. RE may be cleaner than fossils during generation but it has environmental impacts. Hydro power damages environments, materials used in turbine blades are “dirty”. Lowering costs and carbon footprints across entire value chains will depend on many technical breakthroughs.
Ideally, a combination of technical advances and economies of scale should trigger cost reduction that allows RE to be competitively priced versus thermal. In that regard, an over-reliance on generous preferential tariffs and tax breaks may actually prove a hindrance. And there is still an apparent disconnect between work done in government labs and research institutions and commercial needs.
