September 2023

With this issue, we celebrate our 27th anniversary. As before, it is time to pause and reflect on the past year.

Climate change and energy were central themes at the G20 summit. India demonstrated its leadership by achieving a consensus on a number of key issues such as climate finance and technology transfer. For the first time, the G20 talked about the tripling of renewable energy capacity by 2030, besides promoting several climate policy initiatives including an International Biofuels Alliance. These issues are expected to have a significant bearing on the next summit, COP28, as well.

Throughout the year, India pushed hard to fast-track its renewables development. The industry welcomed India’s plans to start auctioning 50 GW of solar and wind power capacity annually until 2028, more than doubling the current pace. The increase comes as India races to meet its target of installing 500 GW of clean energy capacity by 2030, in order to meet 50 per cent of the country’s electricity needs from renewable sources. It is already the world’s third-largest producer of renewable energy, with over 180 GW of installed capacity sourced from clean and sustainable options.

In the past year, robust national standards for green hydrogen were rolled out. Financial incentives for electrolyser manufacturing and hydrogen production exemplified India’s determination to promote low-emission fuels. The waiver of interstate transmission charges was another significant policy enabler. A new carbon credit trading scheme was also launched.

Having said that, more than 50 per cent of India’s installed capacity is coal based, and there are still growing investments being made in fossil fuels. India has a pipeline of over 50 GW of coal-based power projects planned and under construction. There are a number of reasons for it – coal is able to meet baseload and peak load needs and hence remains the most important resource for meeting demand. The focus, of course, has now shifted to ageing and inefficient coal plants that can be phased out, while newer plants are being cleaned up to meet more stringent emission standards.

A lot of course correction has also happened in the power distribution segment over the year. Most states are getting on board the Revamped Distribution Sector Scheme. The late payment surcharge scheme has shown much promise. Utilities are being made to pay legacy dues through the imposition of additional fines on delayed payments, which has helped to more than halve the outstanding dues. Regulations have also been revised to tighten grid discipline and ensure grid security to contain frequency within the operating band and reduce wide frequency fluctuations. Aggregate technical and commercial (AT&C) losses have fallen from 22 per cent in 2020-21 to 17 per cent in 2021-22 and 13.5 per cent in 2022-23 (provisional), as per the latest Ministry of Power estimates.

Energy demand projections for India remain robust. The next few years will see India taking confident strides in increasing its share of renewable energy sources. However, the path ahead is not going to be straightforward.

Storage needs to be built – both pumped storage and long-duration technologies. Hydrogen re­fuelling infrastructure still remains a major hurdle. AT&C losses need to be brought down to single digits. Payment security must be strengthened so that developers are paid on time. Additio­nal work will also be required to build capacity, enhance forecasting, reduce the time required for obtaining permits and land, improve systemic efficiency and increase investor confidence. The good news is that the state and non-state actors recognise these challenges and are working to address them.

In this issue of Power Line, we bring you the latest insights and trends shaping the power sector’s transformation.

P.S.: We take this opportunity to rededicate ourselves to the mission of the magazine – to be the most trustworthy source of information and analysis for the Indian power sector. We would also like to thank our readers, editorial contributors and advertisers for their continued support.