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Review: What is the status of ‘Wind’ & ‘Biomass’ energy generation?

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A parliamentary standing committee recently reviewed India’s 2025 action plan for achieving 175 GW of renewable energy target. The committee noted that while targets have been reached in the ‘biomass’ sector, still a lot of work is pending on the ‘wind’ energy side. Here is a review.

In the previous story, we reviewed the solar energy sector in India following a parliamentary standing committee’s recent report of India’s 2025 action plan for achieving 175 GW of renewable energy target. The report also reviewed schemes surrounding other renewable and clean energy sources and their status of implementation.  The progress made in the other renewable energy sectors is reviewed in this story. 

The data for the story has been collated from the same parliamentary standing committee report titled “Action Plan for Achievement of 175 Gigawatt (GW) Renewable Energy Target”, tabled in March 2021. 

India has not achieved the annual ‘Wind energy’ targets consistently

India has the fourth greatest wind installed capacity in the world with a total installed capacity of 37.94 GW as of 31 July 2020 and 64.639 billion units were generated from wind power in 2019-20. Though the target of 60 GW was set to be achieved from wind energy by 2022, as of 31 July 2020, the cumulative commissioned capacity was 37.94 GW, 8.30 GW was under implementation, and 3.10 GW worth bids were issued making it a total of 49.34 GW. 

The government had stipulated annual targets with respect to wind energy since 2011-12. However, except in 2011-12, 2014-15,2015-16, and 2016-17, the targets have not been achieved in the remaining 5 years. The targets varied with each year and were highest, 4000 MW each in 2016-17, 2017-18, and 2018-19.

9 states dominate the wind energy sector

Nine states- Andhra Pradesh, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, and Telangana are predominantly involved in the wind energy sector in India. In the decade under consideration between 2010-11 and 2019-20, Gujarat had the highest installed wind power capacity of 5766.78 MW followed by Tamil Nadu with 4397.61 MW. The installed capacity in Kerala is only 34.75 MW and in Telangana is 128.1 MW by the end of 2019-20.

Shift in tariff regime cited as the reason for not achieving the set target

The reason cited by the Ministry for non-achievement of targets is the shift in tariff regime. The capacity additions till 2017 when targets were achieved, were through Feed-in Tariff (FiT) mechanism. Later, the tariff mechanism was changed to the bidding route. Currently, the wind power projects in India are installed on the basis of commercial viability through a tariff-based competitive bidding process which has brought down the tariff of wind power from over Rs. 4 per unit through FiT to around Rs 2.80 per unit in the bidding regime. 

Offshore ‘Wind power projects’ may be explored

India also has about 36 GW and 31 GW offshore wind power potential off the coast of Gujarat and Tamil Nadu respectively. India is currently in the initial phases of offshore wind power development. Extensive research is required to understand the viability of these projects. Preliminary studies have estimated that the per megawatt cost of the offshore wind turbine would be two to three times the cost of onshore wind turbines. However, it is expected that the strong onshore projects will help to keep the rates in check. The committee has suggested exploring offshore wind power potential in other coastal states as well. The Ministry was also asked to ensure that the shift in tariff regime does not affect the 2022 targets. 

India is close to achieving the ‘Biomass power’ generation target 

The installed total capacity of Biomass Power and cogeneration installed in India as of 31 July 2020 is 9.936 GW as against the 2022 target of 10 GW. That is, the sector is close to achieving its target. Physical targets set for biopower and the achievements over the years indicate that the targets have been achieved in grid-connected and off-grid biomass power and cogeneration between 2010-11 and 2013-14. In the case of off-grid power, the targets were achieved until 2014-15. The targets since then have been combined for grid-connected and off-grid biomass power and cogeneration power plants and have been achieved in 2017-18 and 2018-19 as well. 

The problems faced in this sector are the non-signing of PPAs by DISCOMs, lack of working capital, and non-availability of biomass. Fund utilization is poor like in the case of the solar energy sector. The reason cited for the poor utilization of funds is the requirement of a multitude of documents for sanction and release.  

NNBOMP targets have not been achieved

New National Biogas and Organic Manure Program have failed to achieve targets since 2011-12. Thus, the committee recommended a comprehensive review of the program. Further, the ministry was asked to rework the targeted beneficiaries under the scheme considering the Ujjwala scheme which has impacted the program. 

Only 22% of SHP potential has been harnessed till now

Small Hydro Power (SHP) projects up to 25 MW station capacity are being developed to achieve the 5 GW target set to be achieved by 2022. Against this 5000 MW targeted capacity achievement by 2022 from SHP projects, 4688.16 MW capacity from 1130 SHP projects has been achieved by 30 June 2020. Further, 100 projects of 509 MW are under various stages of implementation. It has been identified that SHP projects have the potential of about 21133 MW of which only 22% has been harnessed. The SHP scheme was implemented between 2014 and 2017. The Ministry has currently proposed to develop the scheme again for up to 2025. The committee has called for setting up targets to harness the entire potential available in the SHP sector. It also added that the Small Hydro Power (SHP) projects starting from 01 April 2017, must be covered under the new SHP Program.   

India has imported Solar PV cells worth USD 11,673 million from China alone

India already has adequate domestic manufacturing capability for wind, biomass, and small hydropower equipment with expert capability, according to the standing committee report. However, with respect to the equipment for solar power, India is dependent on China, Malaysia, Germany, the USA, and Taiwan. The total value of solar PV cells/modules imported by India was worth USD 711 million in 2013-14 which increased to USD 3838 million in 2017-18. On average, between 2013-14 and 2019-20 (provisional data up to December 2019), India has imported 82% of the solar PV cells worth US$ 11,673 million from China alone, signifying its dependence on Chinese imports for achieving the solar targets. 

The committee recommended formulating long term policy for facilitating domestic solar manufacturing capability in India 

As observed in the previous story, one of the objectives of the National Solar Mission launched more than a decade ago was to encourage domestic manufacturing of raw materials and other raw materials.  The committee opined that excessive dependence on imports makes the solar power sector vulnerable to supply-side disruptions. The committee has called for devising a long-term policy for developing and facilitating domestic solar manufacturing capabilities within India so that dependence on imports reduces and in turn helps in employment generation in the country.

Green energy corridor also shows tardy progress

The Green Energy Corridor scheme was launched in 2015 for synchronizing electricity produced from renewable sources, such as solar and wind, with conventional power stations in the grid. Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Madhya Pradesh, Rajasthan, and Himachal Pradesh are the states rich in renewable energy, which are implementing the scheme through their respective State Transmission Utilities (STUs). However, only cumulative 7365 ckm transmission lines and commissioning of 9976 MVA capacity substations during the last 5 years’ period (as of 31 December 2020) has been constructed as against the target fixed at 9700 ckm transmission lines and 22600 MVA substations. The committee recommended the Ministry work on a mission mode with the states involved in Green Energy Corridor to ensure the project is completed on time. 

Large investments required in the next two years 

Funding to the tune of Rs. 2,61,000 crores are necessary for installing 58 GW of renewable power projects over the next two years. However, because of the pandemic, there have been supply-side disruptions, and attracting such a huge investment in the next 2 years might be a difficult task. The Indian Renewable Energy Development Agency (IREDA) is the only dedicated public sector financial institution for financing renewable energy projects in India. The committee asked IREDA to make available necessary capital for the installation of renewable energy projects for projects to continue smoothly. The Ministry is also recommended to mobilize long-term financing and concessional loans through multilateral and bilateral agencies. Furthermore, the committee has recommended IREDA review its project appraisal processes and make loan disbursement stricter for sanctioning large projects to prevent them from becoming NPAs in the future. It also recommended follow-up with special mention accounts category borrowers and expeditious recovery of the outstanding loans. 

Featured Image: Renewable Energy Generation in India

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