Why there is an urgent need for collective ownership
Why there is an urgent need for collective ownershipThe Indian government recently announced its intention to bid out 50 GW of ISTS (Inter-State Transmission) connected renewable energy capacity annually for the next five years in order to meet the target of 500 GW of installed non-fossil fuel electricity capacity by 2030.
This is a welcome move, as it provides reasonably long-term visibility to the concerned parties, particularly RE developers, investors, and major off-takers such as distribution utilities (DISCOMs).
Where and how two of the flagship programs, solar rooftop and PM-KUSUM, fit into this larger picture is unclear. Nonetheless, it is worth noting that India’s RE capacity, excluding large hydro, has increased by 66% since 2018. If one goes back even further, in 2010, when the National Solar Mission was launched, even 20 GW of solar by 2022 seemed like a pipe dream.
However, this announcement reminded me of an event a few years ago when the then-secretary of MNRE rattled off a schedule for bids that would allow the country to reach 175 GW by 2022.
Finally, against the overall target of 175 GW of RE by 2022 (100 GW of solar and 60 GW of wind), installed capacities were 63.30 GW and 41.93 GW of solar and wind, respectively, as of December 31, 2022. The point here is that, while announcing a firm schedule of intent is a welcome first step, it remains, well, a first step, unless backed up by solid evidence.
It is, as they say, a necessary but not sufficient condition. Unlike other infrastructure projects, such as highways, where the centre may set the tone by bidding out the project, state-level stakeholders, such as DISCOMs and electricity regulators, may have a significant influence on the final outcomes of a power generation project.
The financial health of DISCOMs, for example, which influences their preference for the cheapest electricity or renegotiation of legitimate contracts, cannot be wished away.
To address this, Renewable Energy Implementing Agencies (REIAs) calling the aforementioned bids would need to have a sufficiently long-duration payment security mechanism in place.
Another focus is on the evacuation infrastructure
It is worthwhile to read the Standing Committee on Energy’s 34th report (January 2023).
“ In response to a query about the reasons for the delay in the completion of the Green Energy Corridor, the Ministry stated: “The InSTS GEC-I scheme has been delayed due to various reasons such as Right of Way (RoW) issues, delay in issuing tenders because of delay in substation land acquisition, delay in award of works due to low bid turnout in various projects which resulted in retendering several times, court cases, forest clearances, etc.”
“ The Committee note that the Intra-State GEC project was started in 2015 with a total target of 9767 ckm transmission lines and 22689 MVA sub-stations. Phase-I of Intra-State GEC which is being implemented by the State Transmission Utilities (STUs) of 8 States has been delayed and given multiple extensions.” It is, therefore, of utmost importance that the inter-state transmission facilities are created in tandem with the envisaged timetable for bid-outs.
Bringing state governments and electricity regulators on board early in the planning process is critical for a variety of reasons. For example, on the one hand, strict compliance with RPOs is a problem in most states, while on the other hand, some states are not ambitious enough in terms of RPO targets. Given that RPOs are the primary drivers of Discoms’ RE power acquisition, this is another area to concentrate on. Another factor that may become more difficult in the future is land availability, especially with the introduction of the Green Hydrogen Mission (GHM). GHM intends to produce 5 million metric tonnes (MMT) of Green Hydrogen per year by 2030.
This land requirement is estimated to be around 5 lakh acres. So, purely from a green energy standpoint, it is obvious that there will be competing demands on land. Add to that the 125 GW of renewable energy capacity required solely for green hydrogen production, and the equation becomes even more difficult.
All of this suggests that the centre may need to act much more proactively with state-level stakeholders to foster a sense of ownership among all, rather than viewing these critical goals as apex-level commitments. Perhaps a mechanism like the GST Council could assist in removing roadblocks in a timely manner.
However, one of the fundamental issues is how we view renewable energy, particularly RE power. What has happened over the years is that REpower has been evaluated at face value, with all of the emphasis on its limitations, whether the variability of solar and wind or retrofitting RE into legacy system dynamics.
What is completely overlooked is the intrinsic value that clean energy derived from renewable resources has in comparison to fossil fuels.
It is telling that we have been unable to account for externalities associated with various energy resources in this data-driven age.
Unless we put a monetary value on these as-yet intangible benefits of renewables, the apple-versus-orange comparison will continue to shape the narrative, to the detriment of renewables.
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Content Credit: ET EnergyWorld