Challenges in India's Renewable Energy Sector
India is facing challenges in meeting its climate-action targets under the Paris Agreement, primarily due to issues in the adoption of renewable energy (RE).
Unsuccessful RE Projects
- About 40 Gigawatts (Gw) of RE projects, tendered by four government agencies, have not found buyers.
- The projects were pending for over a year as no state government signed power-sale agreements (PSAs) with RE generators.
- These pending tenders make up nearly half of the 94 Gw of RE bids issued in the fiscal year 2023-24.
Falling Costs and Reluctance of SEBs
- The cost of solar power per unit is Rs 2.50, making it the cheapest electricity source in India.
- State electricity boards (SEBs) are hesitant to sign PSAs due to rapidly falling RE prices.
- Prices of solar power are predicted to fall to as low as Rs 1.9 per unit by 2030.
Impact on Investment and Technology Adoption
- Investment in the RE sector is stalled due to the failure to sign power-purchase agreements (PPAs).
- The Central Electricity Regulatory Commission rejected the tariff for the first tender for grid-scale battery energy storage systems (BESS) by SECI.
- BESS technologies are crucial for integrating RE power sources into the grid, managing their variable nature.
Coal Dependency
- Despite RE accounting for 46.3% of installed capacity, coal remains the primary source of actual power generation.
- This reliance on coal makes achieving a target of 500 Gw non-fossil fuel power generation by 2030 challenging.
- Efforts like the PM Surya Ghar Muft Bijli Yojana aim to expand rooftop solar power, but coal continues to dominate.
