Expansion of RE capacities will lead to a carbon-neutral economy

India ranks fourth in the world in terms of installed renewable energy capacity for both solar and wind energy. India has set a goal of reducing the country’s carbon intensity by less than 45 percent by the end of the decade and achieving 50 percent cumulative electric power installation by 2030. Furthermore, by 2030, we want to create 5 MT of green hydrogen. According to forecasts from Invest India, India’s electrolyser production capacity is expected to reach 8 GW per year by 2025. The cumulative value of India’s green hydrogen industry will reach $8 billion by 2030, and the country will need at least 50 GW of electrolysers or more to ramp up hydrogen production.
Given these changes, which are raising India’s renewable energy index worldwide, the following study focuses on growth possibilities, financial needs, and our performance index. The talk also mentions that we are on the right track to achieving energy independence.
Achievements and improvements under the Green Energy Corridor
India’s renewable energy journey has reached new heights, and renewable energies are now being used in previously untapped sectors. Apart from the power sector, there have been capacity additions, particularly in solar energy, which grew from 10 GW in 2014 to 69 GW by November 2022. When the Solar Mission announced the target of 20 GW by 2022 in 2010, the industry had only achieved close to 12 GW of solar capacity in the first three-quarters of the FY. Looking at these factors, Shirish S. Garud, Director of Renewable Energy Technology at TERI, says, “The higher target of achieving 100 GW by 2022 announced by the government in 2015, followed by suitable policy and regulatory measures, is responsible (possible), along with industry support.” Aside from the power sector, notable achievements include using green fuels such as ethanol, bio-CNG, ethanol blends in gasoline, and biomass in boilers. We have installed a capacity of more than 70 GW of the 100 GW target, which has been balanced at various stages of procurement.
Gautam Mohanka, MD, of Gautam Solar, takes this opportunity to highlight how this project is addressing the challenges of conventional energy through the creation of a dedicated transmission network for renewable energy. “The project has several beneficial improvements, including improved integration of renewable energy into the grid, increased transmission capacity, reduced transmission losses, facilitation of power transfer between states, promotion of renewable energy development, increased energy security, decreased dependence on fossil fuels, and most importantly, a reduction in carbon footprint,” he explained further.
Neelav Samrat De, General Manager & Head of Department, Market Management, ANDRITZ Hydro Pvt. Ltd., speaks of its impacts on tariff bids for solar power projects and off-grid solar solutions. “We are constantly witnessing lower tariff bids for solar power projects.” Moreover, off-grid solar solutions are increasing, which will eventually help the country achieve 24×7 power for all, including rural areas, helping job creation. The Make in India and Invest in India policies promulgate local manufacturing enhancements. Due to this, the dependency on China, for once, will reduce in the coming years.
The Green Energy Corridor is a comprehensive plan for the evacuation and integration of the 32,713 MW (today over 41,000 MW) of renewable energy capacity addition during the 12th Plan Period. According to Ajay Devaraj, Secretary General of the Indian Wind Power Association (IWPA), “its focus is on developing the transmission system and controlling infrastructure to increase RE capacity in the renewable-rich states of Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Rajasthan, Madhya Pradesh, and Tamil Nadu.” Transmission networks, both intrastate and interstate, coupled with establishing a Renewable Energy Management Center (REMC) and the control infrastructure such as reactive compensation, storage systems, etc., have been proposed to evacuate the estimated capacity addition in these states.
“While this is a step in the right direction, the speed of implementation is a cause for concern.” The gestation time for an adequate transmission network is twice the time taken to add renewable capacity. “While stranded renewable energy capacity is already a reality, certain short-term solutions have been provided, but much more is required,” Devaraj adds. In this context, the report “Transmission System for Integration of Over 500 GW of RE Capacity by 2030” from the Ministry of Power provides directions for moving forward.
Challenges in transitioning to clean energy and a green economy
Financing will be a major hurdle as we plan to expand our programme. “High-interest rates in Indian markets are not good for the RE sector. “However, the availability of climate finance, particularly ESG funds, long-term low-interest pension funds, green bonds announced by the government, and moving forward with carbon credits and climate funds established by international communities would benefit the program,” Garud explains. Also, more and more multinational and large Indian public and private corporations and other companies are committing to programmes like RE 100 and announcing their carbon neutrality targets, creating markets for renewables in India and globally.
“All major Indian states have huge RE potential and are now looking at the RE sector to attract investments and create employment opportunities. They are also coming up with attractive industrial development schemes and creating new market segments in India,” Garud adds.
The geopolitical tensions have created several challenges for progress toward clean energy and a green economy. Some of the key challenges include limited access to resources, including raw materials for solar panels; trade barriers that have hurt imports; hesitancy in investment; a lack of cooperation among nations; diverted attention from the green economy; security concerns; and a lack of international support, Mohanka notes and suggests. It is important to note that the situation is complex and multifaceted, and it is crucial to address the geopolitical situation to progress towards a greener economy.
The global issues in the region have benefited the development of hydropower projects in Jammu, Kashmir, and Arunachal Pradesh. “There is an ambitious plan to develop over 10 GW of hydropower projects in Arunachal Pradesh, given China’s presence in the north”, says De. Due to requirements derived from the Indus Water Treaty between India and Pakistan, several significant projects are already in the building process in J&K.
The geopolitical situation has hit different players in the renewable energy space differently. Devaraj is concerned that because of these tensions, input prices for wind energy have increased, but e-reverse auctions continue to churn up unsustainable tariffs. He further stresses that this is likely to put the execution of the project under severe strain. On the positive side, increased RE capacity reduces the burden on fossil fuels, thereby contributing to energy security.

Regional developments create multiple business opportunities.
From April 21 to November 22, India generated 1092.51 BU (billion units) of electricity, of which 296.86 BU (or 27.17 percent) were generated from non-fossil energy sources. These include nuclear, large hydro, and renewables, including small hydro, solar, wind, and bioenergy. This is a healthy mix of renewable energy and a positive step towards meeting our international commitments. Adding to this, the government recently announced a hydrogen mission with an investment target of 19,744 crores.
Several steps can be taken to reduce interest rates in India’s domestic renewable energy market, including government support to lenders and investors, risk reduction through a strong regulatory and policy framework, standardisation of documentation, and capacity building of local banks and institutions for low-cost finance. Also, increased competition from new industry players will drive down interest rates.
Concerning regional growth, it provides several possibilities for new investments, products, solutions, and technology in the renewable energy sector in India as more regions invest in renewable energy, the demand for renewable energy products and services increases, which in turn drives innovation and technology development. “This creates opportunities for new companies to enter the market and for existing companies to expand their Mohanka highlights. Additionally, as more regions adopt renewable energy, economies of scale are achieved, which can further drive down costs and make renewable energy more financially viable.
Underlines the nationwide shift toward introducing innovative storage solutions to mitigate grid instability from renewable energy. Recently, a focus shift has been seen towards pumped storage technology. Various central PSUs have floated tenders seeking heat-based storage. “These are the indications that innovation is about to come.” The recently announced green hydrogen policy is another step in obtaining green hydrogen from green energy, which is none other than non-fossil fuel-based renewable energy.
Interest rates result from complex macroeconomic policies and cannot be considered in isolation. Comparing western market interest rates with those obtained in the domestic market may not be appropriate. However, we can look at the risk-versus-return profile of the domestic market compared to the western market. Regional growth plays a vital role in this context by creating opportunities and opening doors for new investments, products, solutions, and technology. This is already happening in states like Gujarat, Karnataka, Madhya Pradesh, and Tamil Nadu, which are addressing the risk-versus-return equation.
An example is the capacity expansions occurring in Gujarat, which are unconnected with SECI. Karnataka has also opened its doors and made major strides in addressing regulatory uncertainty. Madhya Pradesh is holding its Global Investment Summit in the second week of January 2023 to attract investment. Tamil Nadu has announced the setting up of solar parks across all districts in the state, adding 20,000 MW of solar capacity; in addition, it is developing 4,000 MW of offshore wind in collaboration with MNRE and the Government of Denmark. Contrast these developments with capacity additions in western markets, and one can see that India is doing a lot better.
Shirish S. Garud, Director-Renewable Energy Technology, TERI
States now looking at the RE sector to attract investments and create employment opportunities.
 
Neelav Samrat De, General Manager & Head of Department, Market Management, ANDRITZ Hydro Pvt. Ltd.
Off-grid solar solutions are increasing, which will eventually help the country achieve 24×7 power.
 
Ajay Devaraj, Secretary General of the Indian Wind Power Association (IWPA).
We require more alternative choices than the available short-term solutions for renewable energy.
 
Gautam Mohanka, Managing Director, Gautam Solar
Addressing the geopolitical situation will help us to progress towards a greener economy.