At a recent industry event, Union Minister of Power R.K. Singh highlighted India’s relatively low contribution to global carbon emissions and its commitment to ensuring a healthier planet. He also talked about India’s leading role in climate change mitigation and energy transition initiatives, as well as its rapidly increasing renewable energy capacity and focus on storage solutions. Edited excerpts…
Climate change is clearly evident; we can see it every day in the changing weather patterns. India’s population accounts for 17.76 per cent of the global population, and our contribution to the global carbon dioxide load is 4 per cent. Secondly, our per capita emissions are one-third the global average whereas the developed countries are, on average, emitting two to three times the global average. Globally, the per capita emissions are high. While we are not largely responsible for climate change, we are totally committed to leaving behind a healthier planet.
According to some NGOs as well as the International Solar Alliance, India is at number one position for mitigating climate change and facilitating energy transition. We are the only country to have achieved all our NDCs a good 9-10 years in advance. We had pledged our first NDC to reduce our emissions intensity by 33 per cent compared to the 2005 levels, by 2030. However, we achieved that goal in 2019, which is 11 years in advance. We had pledged that by 2030 we will have 40 per cent of our capacity coming from non-fossil fuels. We achieved that target in 2021. According to the International Energy Agency, our rate of growth of renewable energy capacity is the fastest in the world. Today, our renewable non-fossil established capacity is about 188,000 MW and 88,000 MW is under installation.
We have now started coming out with bids for round-the-clock renewables using pumped hydro. Applications are already there for about 30,000 MW of pumped hydro capacity, and sites have been identified. Similarly, we have concluded a bid for 1,000 MWh of battery storage. We have also extended the production-linked incentive (PLI) scheme for setting up manufacturing capacity for battery storage. The primary thing is that we shall not allow the lack of electricity to hinder our growth. Power demand is growing, so we will have to meet 24×7 power supply. Storage is not viable because of its price. Hence, fossil fuel capacity will continue until and unless storage becomes viable. We cannot get to net zero by burning gas or by burning coal. Going forward, we will achieve 500 GW of renewable energy capacity well before 2030. By then, 65 per cent of the country’s capacity will be from non-fossil fuels.
“Going forward, we aim to domestically manufacture state-of-the-art products, which can be achieved by keeping up with the latest technologies in the market.”
We have connected the whole country to one grid, running on one frequency, and added 197,000 ckt. km since 2014. Transmission connectivity, which was previously from point to point, has now been integrated into one single grid and been brought into general network access. Today, electricity can be sold anywhere, once connected to the grid. We have thriving exchanges for purchase of power, both renewable and thermal. We have put in place a suitable regulatory framework to provide assured open access within 15 days to consumers.
Along with this, we have established directives for rooftop solar installations for commercial and industrial buildings and capped the charges to protect consumers from an unnecessary burden. India has now become the most attractive destination for foreign investments in the renewable energy space.
We have formulated regulations to ensure timely payment of bills to generators. We have imposed stringent consequences for failure to comply with the due dates for paying electricity bills. Due to these regulations, the legacy dues of gencos have come down significantly.
The viability of discoms has been a matter of concern since the beginning. To address this issue, we declined them access to loans and grants from Power Finance Corporation Limited, REC Limited and non-banking financial companies. In order to secure a loan from these companies, the discoms were required to come up with a loss reduction trajectory, get it signed by the state government and adhere to it. This has resulted in the reduction of AT&C losses from 22.8 per cent to 16 per cent for all discoms.
“We already have 5.8 million tonnes of green hydrogen manufacturing capacity at different stages of development. This will be the cheapest in the world due to the low cost of renewable energy in India.”
With regard to module manufacturing, at present, we have 25,000 MW of module manufacturing capacity and another 48,000 MW of polysilicon to module manufacturing capacity under the PLI scheme. Apart from PLI, the industry is working to increase the total manufacturing capacity to 100,000 MW. Of this, 50 per cent will be for cells to modules. Earlier, 80-90 per cent of polysilicon used in India was imported from other countries. Meanwhile, 90-95 per cent of cells and modules were sourced from other countries. We had proposed a 25 per cent duty on cells and a 40 per cent duty on modules, but it did not work. Therefore, we have now proposed another non-tariff barrier to ensure that quality standards are met. We have mandated a list of modules and manufacturers to verify the manufacturing process in order to further safeguard the prescribed quality standards. This will promote domestic manufacturing and further promote the Make in India strategy. Another barrier that we faced came in the form of a price hike of 45-50 per cent from manufacturers. Going forward, we aim to domestically manufacture state-of-the-art products, which can be achieved only by keeping up with the latest technologies in the market.
The state governments had issued an order, which prohibited the interstate transmission of renewable energy from a plant set up in a particular state for consumption in another state. The restriction has now been removed. In another development, states started imposing unfair tariffs on the generation of renewable energy from wind and hydro sources. We have curtailed these practices.
We already have 5.8 million tonnes of green hydrogen manufacturing capacity at different stages of development. This will be the cheapest in the world due to the low cost of renewable energy in India. The cost of setting up 1 MW of renewable energy capacity is $600,000, which is unmatchable. Soon, we will come up with a bid for round-the-clock renewable energy using green hydrogen as storage. Once the cost of fuel cells goes down and their efficiency increases, our focus will shift towards round-the-clock renewable energy. For every kilogram of green hydrogen produced, five carbon credits can be secured. Now, when you sell green hydrogen, you can agree to transfer two or three of the five carbon credits to the entity that is buying it from the discom. Many countries have already approached us for a joint crediting mechanism. We have an umbrella agreement that helps entities enter into agreements to sell green hydrogen.
Owing to stringent penalties, we have become one of the leading countries with the lowest emissions globally. The renewable purchase obligations (RPOs) that we are laying down must be followed by the states. Any discom (or any entity) consuming energy is required to follow the specified trajectory, regardless of the standards set by the state electricity regulatory commissions. Additionally, our systems are transparent. We have working payment security mechanisms, security of contracts, and security of payments.