New Delhi: India stands at a pivotal moment in its quest to achieve a $7 trillion economy by 2030. Forecasts by the Ministry of Finance, Government of India as well as by the International Monetary Fund, project a GDP growth rate of 7% for FY 25 and 6.5% for the following two fiscal years respectively, positioning India as the fastest-growing economy among the major G20 countries. This strong GDP growth trajectory of the country will entail a significant surge in energy demand.
India’s energy landscape is undergoing a transformative journey, marked by the commitment to achieve net-zero emissions by 2070 and meeting a target of 50% of its electricity requirements from renewable sources by 2030. Therefore, energy security, along with the paradigm shift towards providing power supply through cleaner energy sources, has become country’s fundamental necessity.
In navigating this path, RTC-RE (Round the Clock Renewable Energy) stands out as the lynchpin. RTC-RE not only guarantees uninterrupted power supply to fulfil the energy demand of industries but also aligns seamlessly with the Indian government’s ambitious targets of attaining 500 GW of installed capacity from renewable sources by 2030. This underscores the critical importance of RTC-RE in India’s energy transition journey.
Recognizing the critical importance of RTC-RE in India’s energy transition journey, the government has taken several policy measures. These include renewable-plus-storage tenders, the National Wind-Solar Hybrid Policy, schemes facilitating the sale of renewable and thermal power together (later expanded to encompass any non-renewable energy source) and guidelines for procuring RTC-RE power from grid-connected clean energy projects. Additionally, the Ministry of New and Renewable Energy (MNRE) has also issued guidelines for tariff-based competitive bidding processes for RTC-RE power projects, further facilitating the integration of renewable energy into the country’s power mix.
Moreover, in the fiscal year 2021-22, Commercial and Industrial (C&I) consumers accounted for 36.2% of the nation’s total power demand, equivalent to approximately 412.9 Billion Units (BU). Projections indicate a Compound Annual Growth Rate (CAGR) of 8.2%, with an anticipated demand of 775.3 BU by 2030 (Source: 20th EPS, CEA). Notably, tariffs discovered in renewable energy with RE-RTC tenders have remained highly competitive compared to conventional sources. Tariffs in the recent bids have ranged from Rs. 4.0 to Rs. 4.5 per unit, significantly lower than the Rs. 5.2 per unit discovered in recent medium-term bids for coal-based projects. However, C&I consumers still face challenges in meeting peak power demand solely through standalone solar and wind projects, leading to continued reliance on thermal power sources. Consequently, there has been a notable uptick in interest among C&I consumers towards transitioning to RTC-RE, driven by the benefits of uninterrupted power supply and cost savings. Furthermore, RTC-RE power presents a viable and green alternative for C&I consumers.Future Opportunities
While standalone wind and solar projects will continue to be awarded through auctions, going forward, the share of more RTC-RE renewable energy projects in auctions will increase substantially. Additionally, Government’s announcement of viability gap funding (VGF) for the development of Battery Energy Storage Systems with capacity of 4000 MWh, is a welcome step towards mass adoption as storage cost continues on the downward trajectory over the next decade.
Way Ahead
To support this growth, prioritizing research and development initiatives aimed at substantially reducing the per-unit cost of storage technologies is imperative. This effort could be supported by government interventions such as Viability Gap Funding (VGF).
Additionally, the development of a robust Policy and Regulatory Framework for widespread implementation of RTC-RE, similar to Renewable Purchase Obligation (RPO) trajectories for standalone Solar, Wind, and other renewable sources, can incentivize investment and product development. Mandating a portion of energy demand to be met through RE RTC can create substantial opportunities for developers and attract investments.
Moreover, advancements in renewable profile forecasting can enable excess energy to be auctioned in Day Ahead and real-time markets, ensuring cheaper power availability and reducing market volatility. These measures collectively pave the way for a more sustainable and resilient energy future in India.
[This piece was written exclusively for ETEnergyworld by Devansh Jain, Chairman, Renewable Energy Committee, PHDCCI and Executive Director, INOXGFL Group]
