Dealing with Issues Around Decarbonisation – India’s Stellar Solar Story

India's path towards Net Zero is of particular importance for achieving the global climate targets due to the sheer size of the country and its economic dynamism.

India’s path towards Net Zero is of particular importance for achieving the global climate targets due to the sheer size of the country and its economic dynamism. Its commitment at COP26 at Glasgow, 2021 was for creation of 500 gigawatt (GW) non-fossil power generating capacity by 2030. Since that announcement India has made impressive strides in the renewable energy sector, positioning itself as a frontrunner in the global renewable energy market. Central government policies and initiatives, technological advancements, and significant foreign investments, India has witnessed remarkable growth in renewable energy capacity, and today the country is ranked fourth globally in terms of the total solar capacity installed.

With a population of around 1.4 billion India has a massive demand for energy to fuel its rapidly growing economy. It is said that every year, India adds a city the size of London to its urban population, involving vast construction of new buildings, factories and transportation networks. Coal and oil have so far served as bedrocks of India’s industrial growth and modernisation, giving a rising number of Indian people access to modern energy services. This includes adding new electricity connections for 50 million citizens each year over the past decade. But in its pathway to net zero emissions by 2070, most of the growth in energy demand this decade would have to be met with low-carbon energy sources.

How is the Switch from Fossil to Non-Fossil Based Energy being Addressed?

In the years following the signing of the Paris agreement, India took a view that it must stop new thermal power projects and rev up renewable energy capacity. The government of India has set a target of 292 GW of installed solar energy capacity. According to estimates, 292 GW capacity would require at least six lakh hectares of land, which is close to impossible given India’s dense population.

So the approach has gotten more tempered and policymakers in India have taken the approach that while the renewable energy sector was one of the critical sectors, the country could not lose sight of its vast coal reserves nor can it give up traditional power generation i.e, thermal altogether. So while the thrust on renewable energy obviously continues, there is a revised plan of building further thermal capacity of around 20,000 megawatt (MW) per annum. There is a huge degree of push on transmission and distribution; transmission because new networks have to be connected to the power grids and carry this new load and distribution because there are many positive changes from installation of smart metres to time of day pricing. India is endowed with abundant solar energy which is capable of producing 5 trillion kw of clean energy.

At the same time, India has been aggressively pushing towards a more sustainable future by investing heavily in renewable energy sources with solar energy at the forefront of its efforts.

Many states in India have already recognized and identified solar energy potential and others are lined up to meet their growing energy demands with clean and everlasting solar energy. The top five states for installed renewable capacity in India are Rajasthan, Gujarat, Karnataka, Tamil Nadu and Maharashtra.

India’s target of achieving 50 percent of installed electric power capacity from non-fossil fuel-based energy resources by 2030, outlined in the Nationally Determined Contributions (NDCs) appears to be well ahead of schedule. Already out of an overall installed electricity capacity of 425.5 GW, nearly 43.8% 186.46 GW non-fossil fuel-based capacity has been installed in the country. Of this solar power accounts for an impressive 57.9% of the nation’s total renewable energy output.

But even as the country celebrates more solar power projects, there is a forewarning from experts that solar can be used only in the day and then there will be rising pressure on grid engineers to find power after sunset at affordable rates. To facilitate the transition from fossil fuel-based sources to renewable energy sources, it is essential to make it dispatchable and available round the clock. In August 2023 the Ministry of Power and New & Renewable Energy issued the  ‘National Framework for Promoting Energy Storage Systems’ which is a very clear recognition that as India steps up renewable power it will have to manage the imbalance between sunshine hours. The thrust rightfully so, on rapidly scaling up storage systems is receiving governmental attention both through the new policy framework as well as via subsidies.

This push is not just on battery storage which is expensive and has certain difficulties, but on  large-scale Pumped storage plants (PSPs) capacity. PSPs  can generate power continuously for a long duration, depending on the storage capacity of the reservoir.  India’s current PSP capacity stands at 4,745.6 MW from eight plants, and surveys are being carried out for expansion of PSP capacity to 50 GW across 39 projects.

PLI Scheme in High efficiency Solar PV modules:

The union cabinet has also approved the introduction of the Production Linked Incentive scheme for ‘National programme on High Efficiency Solar PV Modules’ for achieving manufacturing capacity of GW scale in High Efficiency Solar PV Modules.

By making the transition to renewable energy a crucial component of its ‘Make in India’ programme the PLI scheme aims to develop and build an entire ecosystem for manufacturing of high efficiency solar PV modules in India, and thus reduce import dependence in the area of renewable energy.

The PLI scheme focuses on direct employment of about 1,95,000 and indirect employment of around 7,80,000 persons with import substitution of approximately Rs.1.37 lakh crore. The government has also allocated a total capacity of 39,600 MW of domestic solar PV module manufacturing to 11 companies with a total outlay of Rs. 14,007 crores. By October 2024 manufacturing capacity totaling 7,400 MW is expected to become operational; by April 2025 a capacity of 16,800 MW and the balance 15,400 MW capacity by April 2026.

As per the National Solar Energy Federation of India (NSEFI) India’s manufacturing capacity for solar modules will touch 100 GW by 2026 or 2027 with another 100 GW of cell manufacturing capacity.

Private Sector is Leading the Renewable Energy Wave in India:

Both domestic and foreign investors are contributing to the installation of solar power plants in the country. Over the past three financial years, India has attracted a total of $3.8 billion in foreign direct investment (FDI) in the solar energy sector.

Recently Adani Green Energy (AGEL) commissioned a 180 MW solar power plant in the Jaisalmer district of Rajasthan. Incorporating next-generation bifacial solar PV modules and horizontal single-axis solar trackers to maximise generation through better module efficiency and sun tracking throughout the day, the 180 MW solar plant is expected to produce around 540 million units (kWh) of electricity per year.

It was a  very proud moment for India when engineering major Larsen & Toubro (L&T) commissioned its first indigenously manufactured electrolyzer at the green hydrogen plant at Hazira, Gujarat earlier this month. Equipped with an  indigenously manufactured  Electrolyser Processing Unit (EPU) ML-400, the L&T plans to leverage its giga-scale plant in Hazira to meet the growing demand for green hydrogen, maximising product localization through enhanced local supply chain, and automation for cost-competitiveness.

A continuing Thrust Towards Renewable Energy Despite Challenges:

Battery storage continues to be expensive, which makes deploying an off-grid solar in rural areas a challenge. To expand energy supply in rural areas the union government has initiated programs like ‘PM Surya Ghar: Muft Bijli Yojana’ to encourage   solar rooftop panelling in maximum households. The Union Budget of 2023-24, has allocated a corpus of 7327 crore to the solar power sector. Under the  Solar Park Scheme, more than 50 solar parks with a cumulative capacity of 38 GW are to be built.

Driven by increased capacity, India solar waste, end-of-life photovoltaic (PV) panels and associated electronic components is expected to increase from 100 kilotons in FY 20202 2023 to 600 kilotons by 2030. Government measures such as Extended Producer Responsibility (EPR) regulations for electronic waste, including solar panels and draft rules for the management of solar waste seek to address this issue.

Despite solar energy being the leading contributor, India is further diversifying its renewable energy portfolio especially in terms of wind energy, which contributes nearly 27.27% to India’s renewable energy generation.

Going forward, India’s renewable energy sector is poised for continued expansion with skill, innovation and finance for energy capacity addition.

Vaishali Basu Sharma
Vaishali Basu Sharma
Vaishali Basu Sharma is an analyst of strategic and economic affairs. She has worked as a consultant with India’s National Security Council Secretariat (NSCS) for nearly a decade. She is presently associated with New Delhi based think tank Policy Perspectives Foundation.