Mainstreaming Renewables: Global focus on making the energy transition

Global focus on making the energy transition

Energy is required to fuel economic growth but it also leads to emissions. While India has low per capita emissions, it is still the third largest polluting country in the world. The electricity sector is the largest emitter of carbon dioxide. The industry and transport sectors follow next. The emissions from the Indian electricity sector increased at a compound annual growth rate of 5.7 per cent from 727 million tonnes of carbon dioxide (mtCO2) in 2013-14 to 961 mtCO2 in 2018-19. Given the adverse effects of emissions on the environment and public health, there is a pressing need to cut down emissions in the country. After the Paris Agreement, many countries including India vowed to reduce their carbon emissions. India’s Intended Nationally Determined Contribution (INDC) targets a 33-35 per cent reduction in emission intensity by 2030 from the 2005 levels. However, developing countries including India still face challenges in meeting the targets owing to inadequate infrastructure.

However, despite challenges, the Indian government has been proactive in promoting renewables to cut down emissions. This has resulted in ambitious renewable energy target of 175 GW by 2022 and 430 GW by 2030. The cost of renewable energy and energy storage has been falling, which is facilitating sector growth. In a recent tender by the Solar Energy Corporation of India (SECI) for renewable energy plus storage, the prices discovered were lower than the price of electricity produced by coal-fired plants. In February 2020, the Greenko Group and ReNew Power Limited emerged as the successful bidders in SECI’s 1,200 MW renewable-cum-energy storage tender with guaranteed peak power supply. The Greenko Group secured 900 MW of pumped storage capacity at a weighted average tariff of Rs 4.04 per kWh and a peak tariff of Rs 6.12 per kWh. Meanwhile, ReNew Power secured 300 MW of renewables-plus-battery storage capacity at a weighted average tariff of Rs 4.30 per kWh and a peak tariff of Rs 6.85 per kWh. For the renewable energy supplied during off-peak hours, SECI will pay a pre-specified tariff of Rs 2.88 per kWh. The falling prices are further going to drive the economics of renewable energy and make it a favourable choice for energy generation.

Further, several key developments have taken place in the energy sector between 2016 and 2019, including universal electrification under the PradhanMantriSahajBijliHarGharYojana (Saubhagya) and a 7 per cent reduction in energy intensity. Significant progress has been made in promoting renewable energy through subsidy schemes such as the PradhanMantriKisanUrjaSurakshaevamUtthaanMahabhiyan (PM- KUSUM), schemes for rooftop solar deployment, the provision of renewable purchase obligation under the National Tariff Policy, the development of solar parks, and the construction of power transmission network under the Green Energy Corridor projects. Recently, the Union Budget 2020-21 announced that the PM-KUSUM scheme will be expanded to provide stand-alone solar pumps to 2 million farmers and grid-connected pumps to 1.5 million farmers. The PM-KUSUM scheme was launched in 2019 with the aim of expanding decentralised solar generation by replacing agricultural pump sets with stand-alone and grid-connected solar water pumps. The Union Budget also proposed to launch a scheme to enable farmers to set up solar power capacity on their fallow/barren lands and sell surplus power to discoms. There is also a proposal to set up solar projects alongside railway tracks on land owned by Indian Railways.

In addition, supporting research and development as well as financial incentives for off-grid and decentralised renewable energy have also played an important role in increasing renewable energy uptake.

International experience

The German long-term energy strategy is rooted in “energiewende” or energy transition. It plans to expand the share of renewable energy in gross electricity consumption from 38.2 per cent in 2020 to 80 per cent by 2050, taking its share in the final energy consumption from 16.5 per cent to 60 per cent. The country, which was highly dependent on nuclear energy, has begun phasing out its nuclear power plants in the aftermath of the Fukushima nuclear disaster in 2011 in Japan. It plans to significantly reduce its nuclear power capacity by 2022. Further, Germany has plans to phase out its coal-based power capacity by 2038. This has been enabled by a massive increase in renewable energy capacity over the past 20 years to reach 49 GW of solar, 53 GW of onshore wind and 7.5 GW of offshore wind capacity at present. The continuous policy development has been a key factor in the growth of renewable energy capacity in the country. However, increasing the share of renewable energy requires a large amount of flexibility. Germany has deployed many flexibilisation solutions in generation, grid expansion, demand response, storage in terms of batteries or power-to-heat or pumped storage, sector coupling and power-to-x technologies.

Likewise, Switzerland also decided to phase out nuclear power after the Fukushima disaster, although it has not set a timeline for this. The country has committed to reduce 50 per cent of its greenhouse gas emissions under the Paris Agreement. Switzerland’s energy mix consists of about 60 per cent of hydropower. It will need to substitute nearly 40 per cent of the electricity mix with new renewables and large hydro in order to eliminate nuclear and fossil-fuel based power. Most of the European countries are facing a common issue – the stabilisation of electricity demand. Although energy efficient sectors such as e-mobility are growing, heavy industries that consume more energy are also growing.

Switzerland aims to become carbon-neutral by 2050. One of the key focus areas for the energy sector is hydropower. It is a source of firm power and has economic advantages as well. Demand-side measures that can be taken include tenders to help enhance efficiency in the energy sector. Community renewable energy projects offer a good way to promote non-conventional energy while saving network costs. In India, these projects can be in the form of community rooftop projects. These can incorporate smart metering and blockchain technologies as well. On the financial side, incentives such as tax exemption can drive the uptake of renewables.

Energy storage

Energy storage has various applications including renewable energy integration, electrical energy time-shift and electric supply capacity, ancillary services, transmission and distribution infrastructure services, and customer energy management services. The US has energy storage systems aggregating 31.2 GW in capacity, which accounts for nearly 3 per cent of the country’s total installed generation capacity. The country delivered around 2.5 per cent of its power through storage as compared to 15 per cent in Japan and 10 per cent in Europe. An adequate compensation mechanism has been devised based on how closely operators follow the despatch signal. In the UK too, a smart network storage system of 6 MW/10 MWh was deployed to enable the UK power networks to manage electricity demand during peak hours. It is the first large-scale battery support to the national grid built at a cost of GBP 18.7 million. The choice of storage technology will depend on whether the system is being designed for frequency regulation or peak load management or network protection. Policies and regulations have been critical to opening up energy storage markets in other countries. Therefore, the existing regulatory framework for storage needs to be strengthened.

To sum up, efforts to mainstream renewables are under way in countries across the world. However, the success of these initiatives depends to a large extent on supportive policy and regulatory frameworks to drive the energy transition.

Based on a panel discussion amongst

R.P. Gupta, Special Secretary, NITI Aayog; Ravi Seethapathy, Chair, ISGF working group and chairman, Biosirus, Inc., Canada; A.K. Verma, former Joint Secretary, Ministry of Power; Christine Falken-Grosser, Divisional Head, Bilateral Energy Cooperation, Federal Ministry for Economic Affairs and Energy, Germany; Jean-Christophe Füeg, Ambassador, Swiss Federal Office of Energy; and ShalabhSrivastava, Country Director, RTI India