India must speed up shift to renewable energy generation
The Ukraine war, the severe heating shortage, and the high energy cost as winter grips Europe have provided new urgency to the shift to green, renewable energy (RE). A recent International Energy Agency (IEA) report predicts the world is expected to build as much renewable capacity in the next five years as it added in the last two decades. The IEA forecasts 2,400 gigawatts (GW) of renewable power will be added worldwide—equal to China’s entire capacity today. Remarkably, over the next five years, 2022–2027, 90% of the energy capacity added will be renewable.
However, India’s progress has been tardy. The Modi government had set a target of 500 GW of renewable energy by 2030. We are generating about 120 GW of ‘green’ energy, accounting for about 29% of the total installed power capacity. The IEA points out we are way below target—India is slated to add only 145 GW by 2030, or about 29 GW in annual installations. The on-ground performance is even worse—only about 13–15 GW is coming into the grid yearly. The IEA says the slow growth of RE power is because of the slowdown in auction awards for solar, wind and hydropower. Among the main stumbling blocks are the state electricity distribution companies (discoms), which cannot sign power purchase agreements (PPAs) with the green generation companies because of their weak financial status. Without robust offtake, renewable energy growth has been slowing.
India’s traditional sources, including coal and oil, account for about 71% of power generation. Coal contributes the bulk, i.e., around 55%, while crude oil and gas make up the rest. With the Ukraine war and the energy crisis, the economics of this dependency has become worse. India imports 85% of its crude oil, and this ratio is not changing in a hurry. On the other hand, coal mines destined to be shut or moth-balled have been opened up. Union finance minister Nirmala Sitharaman acknowledged last month that the dependency on coal is likely to increase in the near future. To meet the shortage, Coal India imported eight million tonnes of coal last fiscal year. All this does not bode well. Coal is a ‘dirty’ fuel that adds to greenhouse gases and global warming. The Ukraine war is not going away in a hurry. These factors require a new energy ‘war plan’ to make the shift to renewable energy faster.