India is likely to obtain 63% of its installed energy capacity from renewable sources (including hydropower) by 2029-30, according to the Central Electricity Authority (CEA). This would significantly exceed the country’s Paris Agreement target of a 40% share of installed energy capacity from non-fossil fuel sources by 2030.
The CEA report estimates that growth in new installed energy capacity will lead to renewables generating about 44% of all electricity consumed in India by 2029-30.
In an information note, IEEFA notes that CEA’s analysis predicts moderate growth in coal capacity, while gas and biomass growth are expected to be negligible. The CEA makes a baseline forecast for thermal power capacity of 291GW by 2030, a clear expansion from the 225 GW in operation in March 2019. But CEA’s bullish conclusion is that thermal capacity will fall from 64% to just 35% of total installed capacity in just 11 years.
The CEA models also take into account that India will need 34 GW / 136 GWh of battery energy storage systems (BESS) by 2030 to balance the reliability and stability needs of the network of 440 GW of variable renewable energy capacity, backed by 73 GW of hydropower and 10 GW of biomass. In view of the rate of technological change and cost deflation in batteries, this ambitious forecast could become prophetic.
Estimates of CEA’s generation capacity mix are based on projected demand obtained through India’s 19th Electric Power Survey (EPS). Projections are adjusted to include estimated solar generation contributions on the rooftops of households and enterprises.
“India dominates the list of countries with the world’s most polluted cities. According to World Bank estimates, air pollution costs are equivalent to 8.5 per cent of GDP. India also faces extreme and growing water shortages in major cities. The transition to clean energy can help the country achieve its goals of strong economic growth and sustainability,” said Vibhuti Garg, author of the IEEFA report.
Garg points out that the drive to create more renewable energy capacity (RE) should not only be reflected at the central planning level, but should also be integrated and coordinated with state government plans. India is making great strides, with 13 GW of solar projects tendered in June 2019 alone.
Gujarat, one of the most active states, announces plans to increase renewable power generation capacity to 30 GW over the next three years. However, IEEFA believes that in order to develop energy security and incorporate an increasing proportion of zero pollution and renewable energy, planners must prioritize the expansion of interstate network quality transmission. This is a critical prerequisite for India to meet its renewable energy ambitions.
IEEFA notes that the adoption of large-scale energy storage technologies is critical to the large-scale integration of renewable energy sources. With technological advances, the cost of battery energy storage systems has fallen at an accelerated rate, 30 per cent less in 2018 alone. India needs to invest its technical and financial resources to build energy storage capacity, which will enable it to absorb more renewable energy into the energy system in the foreseeable future.
“Renewable energy will further help address the problem of air pollution and water stress, as well as mitigate India’s excessive reliance on fossil fuel imports, which cause inflation and erode the value of the rupee,” said Garg.