Race has just begun..!

Keynote Address at RE Assets, July 6, 2023, New Delhi

At the outset, I would like to congratulate Firstview for organizing this event and also thank them for inviting me here.

When Firstview invited me to deliver the keynote address, I wondered what I should be talking about?

If we look at the installations, more and more capacities are being added. There are issues, constraints, etc. but these are also well-known and are being addressed in the right kind of forums.   If we look at technologies, they are generally getting upgraded and the technological issues are also well understood by those who are involved. If we look at policies, these are in place and new policies are being introduced.

All said and done, there is a significant forward movement with technology improvements, a reduction in costs, and more investments.

I thought, a look at the development statistics and figures in RE, might throw up some interesting facts and we might be able to draw some conclusions for this conference.

If we look at the developments globally, the total worldwide installed solar and wind capacities have surpassed 1 TW each. In the case of Solar, it is around 1.2 TW and in the case of Wind, 1 TW milestone was achieved in June this year. However, in terms of units of electricity generation, wind should be generating more on account of a generally higher Plant Load factor. 

In 2022, the total electricity generation in the world was around 28000 TWh with Wind being 7.6% and Solar 4.6%, and total clean energy including bioenergy and hydro constituted 30% of the total generation. In a few years, this 30% will become 40%, and then 50%, and so on… because the spending and investments in clean energy have been steadily increasing. In 2022 investments in clean energy were 1.7 times of that in fossil fuel plants.  So on the one hand, the combined generation of Solar and Wind accounts for only 12% of the total generation, which given the worldwide hue and cry on climate change and RE, does not appear to be a very big number. On the other hand, increased investments will result in increased penetration of RE in the power system, and this percentage as I said will continue to increase.

If we talk of India, wind capacity stands at 43 GW and Solar capacity at 68  GW, so the combined capacity is more than 110 GW, which is around 26% of the total installed capacity.  The total installed RE capacity including large hydro is around 174 GW. Coming to generation from these plants -  in 2021-22, RE accounted for 170 BU, which was around only 11.5% of the total generation.

Looking at the future developments, at COP 26 in Glasgow, India already announced that it will meet 50% of its energy requirements from renewable energy by 2030.  

As per the National Electricity Plan 2023 of CEA, the total installed capacity by 2031-32 is likely to be around 900 GW of which nearly 600 GW will be based on RE including 122 GW of wind and 365 GW of Solar, which means as per this plan in the next 8 years, we should be adding nearly 8 GW of wind power and 36 GW of Solar power every year. NEP also talks about a BESS capacity of 47 GW/ 236 GWh. A number of policies and measures have been announced from time to time. We have Repowering Policy, Offshore Policy, Hydrogen Policy, BESS Policy, EV Policies etc.

All this points to the fact that going by the pace of developments we have today, next 8 years are going to be very hectic.

On a time scale of 8 – 10 years and beyond, we should not be looking at very precise numbers as there always will be differences between the planned and actual realizations. However, the NEP is based on a lot of analysis with various established models and, therefore, these are serious numbers.

It is important to note here that we have only been talking about the power sector but there are other sectors such as Transport, Buildings, Industry, Agriculture, domestic etc. where electricity is only a part of the energy input. For example in 2020, nearly 20% of the total energy consumption in India was in the transport sector , which also accounted 50% of Oil Consumption. Now, we see an increasing effort to introduce Electric Vehicles and the EVs are capturing a segment of the transport market. According to CEEW, approximately one-third of the four-wheelers and half of the two-wheelers sold in 2030 could be electric, and could further increase to 75 per cent and 90 per cent, respectively, by 2050. Thus clearly, phasing out of diesel-petrol vehicles is underway. This is part of the energy transition that we are looking at.  I am not sure if NEP has considered this possibility in its plans. Ideally, all these EVs should run on green energy. Similarly, it is possible that more and more electricity is used in Industry, domestic and agriculture sectors instead of oil /coal/gas/ diesel or even biomass etc. In fact, e-cooking is being encouraged by the Government with appliances such as induction cooktops, electric pressure cookers, etc. All this will add to the electricity demand.

Demand is bound to grow because of these “energy transition” developments and also because of the changing rural and urban landscape, greater urbanization, education, and economic development.

If we look at electricity as the main carrier of energy, a main challenge would be to also make it available in a distributed manner, where Solar, Wind, micro hydro, small hydro combined with battery packs can play a major role. Thus storage devices, even other than electric batteries such as thermal storage, gravity storage and pumped hydro – small and big can play an important role.

It is possible that hydrogen, which can be generated using renewable energy, piped, stored, and transported - also emerges as an energy carrier. Green hydrogen can possibly use existing delivery networks of petroleum and gas to reach where it is needed – in transport, cooking, industry etc.

Whether it is electricity or hydrogen, Renewable Energy is going to be the primary source.

There are always market barriers of land, connectivity, infrastructure, pricing etc. but these can be overcome.

I give you an example from wind energy –

Till 2000, it was assumed that Indian conditions were suitable only for smaller wind turbines (250 kW – 500 kW) and the wind turbines that were being installed in India, were much smaller than those being installed in other parts of the world. This was a constraint that was imposed without a strong rationale. In 2000, none other than Tulsi Tanti broke this barrier by building larger wind turbines and that completely changed the market. Today, we have wind turbines in the range of 2-3 MW and up to 5 MW ratings are being offered. In China, they have set up a 16 MW wind turbine. No one prevents us from building larger wind turbines.

Lastly, I would like to mention that there are lot of discussions going on about offshore windfarms. If we have to build 600 GW of RE by 2030 and much more later, Offshore will become a necessity. No doubt, today it is relatively costlier but it is just on the brink, and with scale and the right kind of ecosystem, it will become viable.

Perhaps we should examine new innovative mechanisms for the creation of Solar and Wind Parks including Offshore Parks. I can think of PPP models in which a large developer, which can also be a PSU sets up the basic infrastructure including transmission corridors and the other investors come in to set up individual plants.   

Technology, methods, and approaches keep evolving and today we also have sessions on use of robotics in RE Assets. I wish you all the best in today’s conference. I would sum up with a single sentence.

“In RE - the Race has just begun..”