Energy from renewable resources like solar and wind can meet up to 20% of India’s power needs by 2020 if transmission issues are resolved.
A July 2015 research report by a German banking major Deutsche Bank titled ‘India 2020: Utilities & Renewables’, has adjusted its solar power forecast for India to 34GW by 2020, an increase of about 240% from its previous estimation of 14 GW. The report further adds that global players have committed approximately $35 billion to the Indian solar sector, giving rise to the need to adjust the prediction for solar power in India upwards to 34 GW by 2020.
Solar CAPEX in India could well surpass coal by the fiscal year 2019 and capacity addition could overtake coal in the FY 2020, if not earlier. The report predicts that renewables could account for a significant 20% of power capacities in India by then.
Power generation is at its highest between 9am and 6pm, hence solar power can possibly impact day power rates, reducing coal requirement by about 8% by the end of 2020. Savings of $17 billion per annum could be made cutting back on imported coal according to the report. Local IPPs in India have to factor in solar into their expansion plans. Renewable energy obligations have become strictly enforceable and the cost of coal power is set to increase.
Renewable energy can reach 20% of capacity, but faces hurdles in terms of transmission constraints and integration of diurnal power into the grid without peak load management capability. Solar in Rajasthan for one could face issues given the policy target if 25 GW solar versus the peak-demand of 11 GW.
The enforcement of the Renewable Energy Purchase Obligations (RPOs) is seen as a further risk, given the weak finances of state distribution companies. The ability of distribution companies to pay for costly RE and hence large-scale absorption of solar is seen as a concern. Financing, land acquisition, limited domestic manufacturing and returns/reliability of baseline data are also seen as possible hurdles.
Local IPPs have got their own game plan for solar growth, given competitive pricing that can possibly restrict conventional power growth. The possibility of further taxes/levies to fund RE subsidies cannot be ruled out, which can put cost competitiveness at risk.
Welspun Renewables has developed some of the world’s largest and highly efficient grid-connected wind and solar power plants in India. We take pride in our team’s ability to work relentlessly on projects in a time-bound and cost-effective manner. With a 494 MW capacity, we hold one of the largest renewable energy portfolios in India. Towards this goal, we will be setting up 5 GW capacities in the next few years, and of this 1 GW will be commissioned well within this financial year. Through our projects we have mitigated over 1 million tons of carbon emission. Our vision is to hasten wind and solar energy in India by exploiting the abundant renewable resources.