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GlobalData’s Purushottam Uniyal considers how renewables can help bridge India’s power deficit
The shortage in India’s electricity supply is hindering its economic and societal growth. The country has been unable to meet its electricity requirements for the last few years and was also unable to achieve installed capacity targets for conventional generation sources.
Conventional sources are scarce and their price volatility in the international market is making it difficult to secure a fuel supply for new power plants. According to the Load Generation Balance Report (LGBR) published by the Central Electricity Authority (CEA), there were shortages of 8.5% and 9.8% in terms of both energy and peaking availability between 2010 and 2011.
Renewable energy sources are developing at an unprecedented rate and significant capacity was added during the 11th five-year plan (April 2007–March 2012). Unlike conventional sources, renewable energy growth far surpassed pre-defined targets.
This trend will continue for at least the next decade as the government is committed to increasing the size of the renewable energy share in India’s power generation mix due to energy security and environmental concerns. This will help to bridge the demand-supply gap and will also support India’s growing economy.
In March 2012 the government set up a committee to develop legislative and policy changes to speed up capacity additions from renewable power sources such as wind, biomass and solar.
The committee will be headed by a senior official from the Ministry of Power and include representatives from the Ministry of New and Renewable Energy (MNRE); power Distribution Companies (DISCOMs); the Central Electricity Regulatory Commission; state electricity regulatory commissions from renewable-rich states such as Tamil Nadir, Gujarat and Rajasthan; and power project funding agencies Power Finance Corporation and Renewable Energy Corporation.
The panel has made it mandatory for DISCOMs to comply with Renewable Purchase Obligations (RPOs), outlined measures to penalise DISCOMs if obligations are not met, suggested amendments to the Electricity Act 2003 to allow regulators to frame innovative market instruments such as Renewable Energy Certificates (REC) to facilitate development of the renewable power market, made RPO compliance mandatory for captive power generators and bulk electricity consumers, and suggested policy measures for biomass-based power projects.
As of March 31, 2012, renewable energy sources accounted for approximately 24.5 GW (12%) of the total installed capacity of 200 GW. Total renewable installed capacity will increase to 50 - 55 GW at the end of the 12th five-year plan (March 2017), contributing more than 20% to the total installed capacity.
In the 13th five-year plan (April 2017–March 2022), this growth trend will continue and total renewable capacity will cross 90 GW and is expected to approach near to the 100 GW mark.
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