Amisha Yadav @CCMS Bureau
The solar sector has grown from infancy to eligible adulthood. But the promising way forward is not without pitfalls. I would call it a case of the ‘strong jockey, weak horse dilemma’ which is a metaphor for the legacy burden of Discoms acting as a barrier to renewable energy adoption. The commercial interests of Discoms cause inertia in identifying the right diagnostics for sustainability and a lack of dynamic policy mechanisms. While solar energy will have a larger road presence in the drive to decarbonize the economy, it will have to mature in many areas to be accepted as a firm power. Even then, it alone cannot take on the challenge of target 2070 without the support of wind, biofuel, hydro and other new and renewable energy sources. But times have never been so opportune as it is now to unleash a new paradigm shift.
Let’s first take the sunny side of the solar story. It has crossed some key milestones to harbour the ambitions of making our planet greener. Technologically, it is viable today. Similarly, economically and financially, it is proven viable as well. But commercially, it is not there exactly. This is where the Discoms put a spoke in the Solar’s wheel. But it’s not entirely the Discoms’ doing. They are also carrying out the social-welfare agenda of the government that seeks to (or should) ensure that electricity is affordable even to the poorest of the poor while being sustainable and available for all.
For investors, solar energy is viable even though they sell it at Rs 2.50 a unit. It’s the easiest game in the world. Invest the money, and forget for 25 years. Keep paying off your debt while netting a decent ROI. It is sometimes argued that even running a small retail shop is more complex and risky than a utility scale solar power project. But for Discoms, it is not that rosy. By the time they wheel the same power to the households, they cough up about Rs 3.75 a unit. There is a system level cost that Discoms incur. Additionally, they have to factor in the cost of debt servicing and subsidies. That’s why Discoms are wary of losing big revenue-generating commercial customers to the solar alternative. This is where we need government intervention, a policy that can address the energy trilemma of equity, affordability and sustainability.
Understanding the problem is essential and there is currently a deep policy conundrum. The actors are moving in a crisscross manner. The renewable energy sector is evolving, but much less than its true potential. Government intervention is needed. It’s important to know on what precise issue the government has to intervene to harness this unutilised potential. As far as utility-scale projects are concerned, the investment value chain has achieved business sustainability. But the challenge lies in small-scale investments. What about bringing the residential sector and irrigation under the renewable energy umbrella? I think distributed solar generation needs a strong push. It has a high potential to decarbonise the economy. The future policy focus of the government has to be on this segment and on supporting the ecosystem for the integration of renewables into the grid.
Energy systems are extremely complex. Deep socio-economic and environmental inter-linkages, nonhomogeneous social structures, the pace of urbanization, changing lifestyles, inequality, industrial growth patterns, and sectoral trade-offs, all impact energy demand. There are a lot of puzzles that need constant policy interventions and fixes. That’s why the importance of a dynamic policy framework cannot be belittled.
A lot of industries have direct primary energy consumption. Unless we understand the sector in totality, it would be very difficult to make a non-carbon transition. Industries like steel, cement and glass etc. require high intensity energy. But solar power in its raw form is not an efficient replacement as a fuel for such industries. For this, green hydrogen is a good alter- native.
Intermittency, variability, system- level cost, and ancillary support services bring us to the ubiquitous debate about storage systems. If solar and wind power are going to be the future energies, it all depends on the storage infrastructure. Given how erratic the weather pattern is becoming the intermittency of generation will only increase. The need for storage was never so pressing. When we talk about storage, lithium batteries should not be at the top of our priority list. Because India doesn’t have ample mineral resources to produce lithium batteries. China owns the majority of the global reserves of the basic battery ingredients Nickle, Cobalt, Lithium and Graphite. Too much dependence of our transition pathways on lithium batteries may corner us in future at the geopolitical mercy of a handful of countries. Batteries will be the new oil if we do not develop other technologies and systems for storage. The private sector, government and academia have to join ranks more closely to intensify research and development. Already, there are innovations in storage happening across the world. Those could be leads and the path for India to create its affordable storage systems. A few examples are pump hydro storage, magnetic levitation flywheels, molten salt storage, and hard rock oil mix storage.
Similarly, it is not solar alone. We have to leverage all new and renewable energy sources including bio- mass. It adds stability to the grid, un- like solar and wind. Bio-fuel is another opportunity. Waste to energy provides double the benefits of freeing our cities from solid waste and generating green energy. As we urbanize at a rapid pace, India will generate huge quantities of waste. If we do not convert waste into energy, we have to pay much higher economic costs due to unhealthy and unsafe environmental conditions. But the benefits would be equally large if the waste generates energy. Energy efficiency is another way that can contribute significantly in decarbonising the economy. That’s why we need to have the right problem diagnostics in place to identify effective and efficient policy interventions.