The year 2021 proved to be a milestone for those working to reduce climate change and its growing effects. The world witnessed the intensity of climate disasters, such as wildfires in North America, cyclonic storms in India and more recently Typhoon Rai which wreaked havoc in the Philippines. All this has pushed climate change to the top of the global agenda like never before. We saw world leaders, including Prime Minister Narendra Modi, gather in Glasgow for COP-26 and 29 more national commitments closer to the summit, bringing the total to 74 countries, which account for 90% of global GDP. represent. ,
In 2022, all Renewable Energy (RE) players will have to double the hard work already done to achieve the RE targets set out in COP-26, such that India will meet half of its total energy needs from renewable energy by 2030. and get net zero. 2070.
So, if 2021 was a new launching pad, 2022 is the year in which RE development needs to be driven higher to hit the country’s stretch climate goals, which include cutting the economy’s carbon intensity by 45%. Is. The challenge is clear now that the government has revised its target of 500GW non-fossil-based installed capacity from 450GW by 2030. The current year will indicate how our accelerated drive toward these stretch goals pans out.
For its part, Renew Power is pitching in. We have added 1.5GW of operational RE capacity so far in 2021-22, taking our total installed capacity to 7.4GW. We are on track to reach our aspirational target of 18GW by 2025. Yes, it is about meeting business goals, but it is also about being part of an ‘all hands on deck’ national effort to meet India’s climate goals. Clearly, ReNew and its RE industry peers have a big task ahead of them. In view of this, I would like to suggest some key measures in 2022 to enable the RE sector to accelerate its capacity expansion and innovate faster.
More Auctions: Given the challenges of gaps in renewable energy, there should be an improvement in grid resilience through more auctions of RE projects by Solar Energy Corporation of India (SECI) round the clock. This will ensure flexible, on-demand power enabled through storage. SECI has done a great job so far and the program it runs should be expanded immediately, as India will need at least 15-20 auctions for at least 30-40GW annually in the coming years.
In addition, battery storage systems will go a long way in addressing the challenge of intermittently stopping RE sources and improving the production profiles of renewable energy projects.
In addition, as the share of renewable energy in the country’s energy mix increases, there will be a need to improve grid resilience and enhance transmission networks.
Discom Health Checkup: There is an urgent need to address the financial health of power distribution companies (discoms), so that they invest more in grid upgrades for absorption of 500GW of non-fossil fuel capacity. Licensing of this area is an ideal solution. This will enhance consumer choice, drive demand for RE and increase investor confidence. The government has taken some positive steps. The government’s reform-based and result-linked, revamped distribution sector scheme is expected to improve the operational efficiency of discoms by providing performance-linked financial incentives.
Protect contracts: Ensuring the sanctity of contracts is crucial to ensure that some states do not question signed power purchase agreements (PPAs) or excessively delay payments to RE players. If PPA contracts are not honored, it affects the business environment in any sector. While there are substantial legal precedents in the power sector to enforce contracts, the Center can work closely with states to ensure greater adherence to contracts.
Taxes and Fees: As RE players need to boost their efforts, rationalization of duties and taxes will surely help. Developing a local manufacturing ecosystem will be challenging if the import duty for battery storage and green hydrogen equipment is not kept low for the next 3-5 years. GST on RE should be maximum 5%.
Green light for green hydrogen: To meet climate goals, green hydrogen is the exciting new frontier. If developed rapidly, it could reduce pollution used in hydrogen production and India’s heavy reliance on expensive fossil fuels (by 2020 95% of global hydrogen production was gray hydrogen, with green hydrogen a minor was 0.1%). This will be important in decarbonizing the harsh chemical, industrial and transportation sectors.
It is encouraging to see that the center has been able to explore the potential of green hydrogen and launched the National Hydrogen Mission last year. But greater investment in electrolysers, as well as targeted policy interventions such as clear green hydrogen obligations, will help the cause.
In this context, ReNew has partnered with L&T to develop green hydrogen capacity. At a broader level, multi-stakeholder partnerships involving scientists, industry, multilateral institutions and investors will play an important role.
Our RE targets for 2030 are both attractive and challenging. The coming year will be crucial for India’s once-in-a-lifetime clean energy transition and in determining whether we reach those life-saving climate goals for generations to come.
Sumant Sinha is the Chairman and Chief Executive Officer of Renew Power.
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