The year 2017 has been yet another landmark year for the Indian energy sector. At a national aggregate level India recorded net surplus energy for the first time. It also turned to be a net exporter of energy. Renewable Energy capacity addition accounts for more than 50% of the total capacity added in this year. Starting with national level policies, we had the Goods & Service Tax rollout in July. Although electricity supply has been kept out of the GST purview, its impact is felt considering the project development costs saw a price correction in the market. At a high level, there was a change at the ministry with R K Singh replacing Piyush Goyal as the Power Minister.
A comprehensive National Energy Policy was promised to be out by end of 2017 but we only had the release of draft version in June. The draft policy did receive critical feedback on how the supply and demand scenarios’ were forecasted running up to 2040. In a recent comment, the government has said the policy is close to being finalized.
Similarly, a draft policy on introduction of energy storage systems was proposed and again the industry is eagerly looking forward to the final version on that.
On the projects front, large scale project tenders was the order of the day. Wind power projects which for long has sustained on Feed in Tariffs at state level had to compete on a competitive tariff determined through reverse auctions. Solar tariffs first breached 3 rupee/unit mark in the bid for Rewa solar project in Feb and subsequently saw further bids stay below the mark. (Read more about solar bids)
Renewable Energy projects in India: A year-end discussion with Vish Iyer on the second part of the year-end review.
A big news that brought some cheer in the year was the release of the greening of grid report, a report that concluded that integration of 175GW of RE would be a possibility by 2022. The study was a collaboration between the Indian and US governments through the PACE-D programme. However, the analysis did leave some experts asking for details. For e.g. the report claimed energy storage wouldn’t have a great impact on grid integration and was not considered in planning. In return, grid balancing was mainly considered with hydro, gas and thermal power plants. The analysis expects the thermal power plants to operate below their current minimum requirement of 55% PLF.
The economic survey that precedes the union budget had valuable insights as expected. However, an interesting analysis came in the second part of the report released in the second half of the year. The Chief Economic Adviser in the chapter Climate Change Sustainable Development and Energy highlights the energy trajectory in India like projecting RE would account for a 43% of total grid capacity by 2027. The survey chapter also looks at the costs and benefits of different energy sources. Like for instance, looks at the record low solar tariffs and asks a question on whether there is an opportunity lost in land given for solar if they tend to under-perform etc. However, the report did leave some unanswered questions in terms of showing a low social cost for per unit of electricity from coal in comparison to renewables. (Read more about the analysis)
Forum of Regulators signed MoU with National Association of Regulatory Utility Commissioners (NARUC) the US body that represents the state public service commissioners. The MoU is part of the USAID’s PACE-D project, ‘Greening the Grid’. The partnership also aims to look at sharing experience in market design between the two countries.
So yes, there is optimism in the industry (ME INCLUDED). With a new minister at the helm, there have been some radical steps taken in the last few months which has created a new wave of enthusiasm in the sector. As Vish mentioned in the podcast a few times (above), the RE industry now sees a transformative phase as India marches on towards an ambitious goal of 175GW of RE by 2022.
On a personal note, wrapping up five years of blogging on this platform (In case you missed my 5 year review as a clean-tech evangelist, here). More to come for sure. Just that it’ll also include integration of my audio blogging platform aka podcast.