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India’s renewable energy push has not just helped reduce greenhouse gas emissions from thermal power generation, but also fuelled economic development and improved electricity access and security. Globally, India now ranks fourth in renewable energy capacity, with 145 GW of installed capacity (excluding large hydro-power), as per data with the Union Ministry of New and Renewable Energy (MNRE). Government programmes in bioenergy, wind and solar power have driven these advancements. To sustain this growth, the country needs a thorough assessment of the barriers to clean energy transition, focusing on implementation challenges in each sector. It also needs structured interventions that create demand-driven markets for wind, solar and bioenergy, and facilitate a domestic industry, covering the entire value chain.
Compressed biogas (CBG), a non-fossil fuel produced from feedstock such as agricultural residue and solid waste, is a cleaner alternative to imported compressed natural gas or CNG (CBG and CNG have similar properties and calorific values). India aims to establish 5,000 CBG projects across the country under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme. But the sector faces some key challenges.
Many CBG plants are operating below their designed capacity. Insufficient feedstock procurement impedes operations. Limited CNG infrastructure curbs potential to extend gas pipelines to CBG plants, hampering gas sales. Expanding gas pipeline around the plants can ensure complete gas offtake. In rural areas, incentivising the conversion of tractors and two-wheelers to use CBG can create a demand for the fuel.
CBG sees erratic biomass supply because of a scarcity in machinery for agro-residue harvesting. Well-directed incentives to promote domestic manufacturing of such machinery can be supported via subsidies. Encouraging farmer-producer organisations to act as feedstock aggregators can help replace third-party entities, while ensuring profit-sharing among farmers.
People are unaware of fermented organic manure (FOM), a by-product of CBG. Agricultural institutes must develop standard operating procedures for FOM enrichment and train farmers in FOM application techniques.
The Reserve Bank of India has classified CBG as a priority sector for lending, yet banks show little interest in financing these projects, citing low profit margins and lack of standardisation. Several banks demand high collateral for loans, with interest rates as high as 11.5 per cent. Establishing a government-backed guarantee programme will incentivise financial institutions to offer loans more readily.
There also exists a shortage of technical personnel in maintenance and operation of CBG plants. This results in leakages or inefficient operations. Skilling programmes on biogas development should be introduced through national skill training institutions.
Wind contributes 32 per cent or 45 GW of the country’s total renewable energy capacity, second to solar power. This is meagre. The country has the potential to generate 700 GW from wind power and the Union government aims to expand wind capacity to 172 GW by 2030—140 GW from onshore projects and 32 GW from offshore projects. Achieving the target in just six years seems a tall order, given the fact that India added 2.2 GW in 2023. At this rate, India will need 57 years to achieve 172 GW.
ACTION POINTS • Expand gas pipeline around compressed biogas plants. This can ensure complete offtake of the clean fuel • Launch offshore wind energy project on pilot basis to allay investors’ fears • Provide guidelines and incentives to encourage repowering of older wind farms with newer, more efficient turbines
The new government, therefore, needs to assess and remove the challenges that hinder the growth of the wind energy sector. For instance, wind power generation varies across the year as a result of seasonal patterns. Developers in Tamil Nadu, Gujarat and Karnataka say that wind power generation is usually at its peak in May, June and July, and at its lowest in December and January. To ensure that fluctuations in the wind energy supply do not hamper business, the Centre in 1992 introduced an annual energy banking system, where the grid acts as the energy bank. The system allowed developers to inject their excess supply into the grid and withdraw during the deficit period. However, in 2019, the government scrapped the system as the variable supply was leading to “grid imbalance”. Though a monthly banking system has since been in place, new developers do not find it attractive. This scenario can be improved by extending the scope of the energy bank to a few more months during the lean generation period.
The government should also streamline capacity expansion. For instance, land acquisition is a significant hurdle for onshore wind projects. This can be addressed by simplifying the acquisition process, clarifying land-use policies and ensuring equitable compensation for landowners.
In terms of offshore wind energy, India’s vast coastline holds the potential of generating 70 GW of wind power. But so far, India does not have any offshore wind project. In February this year, the government issued tenders for seabed lease rights for 4,000 MW offshore wind power projects in Tamil Nadu and Gujarat. But officials with MNRE say the bidding process received lukewarm response from investors. To allay the investors’ fears, the government can launch a project on a pilot basis and prove the profitability of offshore wind. At the same time, rigorous environmental impact assessments and mitigation strategies must be in place to protect marine ecosystems. Experience in other countries shows that construction and operations of offshore wind energy projects could interact with marine life. The projects increase ocean noise, which could affect the behaviour of fish, whales and other species.
The government must provide guidelines and incentives to encourage repowering older wind farms with newer, more efficient turbines, and fostering collaboration between domestic and international experts to promote innovation and reduce costs.
India has made tremendous strides in solar energy development in the last decade. The installed capacity from solar has increased from 1.2 GW in financial year 2013-14 to 82 GW in 2023-24. In other words, the contribution of solar energy has increased to 6.5 per cent of the total energy mix from less than 0.4 per cent a decade ago, according to data with MNRE. To maintain the current growth pattern, the government needs to remove challenges that have led to delays in deployment timeline, in integration with the grid and in power procurement practices.
According to MNRE, states such as Rajasthan, Gujarat, Karnataka, Tamil Nadu, Andhra Pradesh and Telangana contribute nearly 80 per cent of installed wind power capacity. This leads to uneven regional concentration of solar generation in western and southern parts of the country. Efficient transmission of solar power from these regions will require strengthening the power system interface for enhanced grid stability. Since gestation periods for setting up transmission corridors are higher than solar power plant construction, prior assessments to fast-track deployment can be undertaken.
ACTION POINTS • Prioritise projects that combine solar and wind energy, which will lead to round-the-clock generation of power, in high-potential zones • Improve operational management of DISCOMs to boost adoption of rooftop solar • Provide DISCOMs flexibility to exit expensive thermal power purchase agreements to procure solar power, offset carbon emissions
The government can also prioritise projects that combine solar and wind energy in high-potential zones. Such solar-wind hybrid plants will lead to round-the-clock generation of power—from wind in nighttime and from solar in daytime. Renewable power integration in the grid can be seamless when coupled with battery storage devices.
Additionally, this would boost the domestic battery manufacturing industry that, in turn, would make tariffs cost-competitive. Since installation of solar plants has a huge land footprint, promoting alternative sites for solar energy such as floating solar power plants, producing crops and solar energy from the same land, or using mini- and micro-grids in areas with social and agricultural challenges will be useful. Detailed interventions such as manufacturing of floater beds and reducing developer risk in mini-grids are required.
The new government also needs to keep in mind that almost all the growth in solar energy has been from utility-scale models; adoption rates in solar rooftop segments are considerably low. Currently, rooftop solar contributes nearly 13 GW, with only 30 per cent from the residential sector. Improved adoption rates in rooftop solar will require better operational management of power distribution companies (DISCOMS), such as in billing efficiencies, power procurement practices and in technical aspects like residential metering arrangements (net, gross or virtual).
The growth in solar power is strongly correlated with the performance of DISCOMS. For instance, delays in approvals and subsidy disbursement to consumers reduce end-user confidence. DISCOMS also need to undergo urgent reforms to have flexibility to exit expensive thermal power purchase agreements. This will prompt them to procure cheaper solar power while offsetting carbon emissions from early retiring of thermal power plants. Finally, power distribution should not be used as a political tool; let sound economic principles dictate the cost.
This was first published in the 1-15 June, 2024 print edition of Down To Earth