Highlights from Economic Survey for RE Sector in 2021

The Economic Survey, which receded the annual budget of the government, is a widely anticipated document, seen more as a sort of white paper on what the government of the day considers its key achievements, and indications of the way ahead. To that extent, the latest Economic Survey document, all 442 pages of it in fact, is a fairly simple read for once, with no major prescriptions for the Renewable energy. However, in highlighting the many achievements of the sector, it does put perspective on the future targets we have.

For starters, it highlights how India, in the process of ensuring the fastest growth in share of renewable energy capacity, has managed an 18 times growth in solar energy to 49.35 GW, in the past 7 plus years. This, even as overall renewable capacity grew over 2.9 times.

However, taken without large hydro, Renewable energy’s share of generation remains under 11%. Including large Hydro, it would cross 26%.  Keep in mind that the country has set its 2030 goals based on generation, with renewables including large hydro expected to achieve the 50% mark. Taken along with expected growth in electricity consumption of 5-6% under most scenarios, that is a huge gap to fill. To put that in perspective, even with these numbers, India’s annual coal consumption by 2030 could be at 1.5 billion tonnes, almost twice the current levels, to meet its overall power needs.

On rooftop solar, the survey states that only 5.87 GW has been set up till date, while reiterating the target of 40 GW by December 2022. One honestly hopes that the authors have no simply given up on rooftop solar, and we still have hopes for a renewed effort to get closer to these targets by 2024, if not 2022.

2024 is also when almost   50 solar parks with a capacity of 33.82 GW are expected to be developed, under the Ultra Mega Solar Power Projects (UMREPP) and large solar park schemes, which have their own target of 40 GW by 2024.

A similarly ambitious target of 30.8 GW under the PMKUSUM scheme remains in limbo, with barely any movement in the 10 GW ground mounted solar plant component yet. The survey states that as of 31st December, 2021 over 77000 standalone solar pumps, 25.25 MW capacity solar power plants and over 1026 pumps were solarised under individual pump solarisation variant. Implementation of feeder level solarisation variant under component C which was introduced in December 2020 has also started in a number of states.

A scheme for setting up 12 GW Grid-Connected Solar PV Power Projects by government entities (including Central Public Sector Undertakings) is under implementation. Viability Gap Funding support is provided under this scheme. Under this scheme, Government has so far sanctioned around 8.2 GW of projects.

Phase-III of the Off-Grid Solar PV Applications Programme for Solar Street Lights, Solar Study Lamps and Solar Power Packs was available till 31.03.2021. Till December 2021 over 1.45 lakh solar street lights were installed, 9.14 lakh solar study lamps were distributed and about 2.5 MW solar power packs were set-up as reported by State Nodal agencies

On the new flavour of the sector, Wind Solar hybrid parks, it confirms that about 4.25 GW of wind solar projects have been bid out so far, with another  1.2 GW under bidding.

What the survey does not mention however is the increasing divide between states leading the solar push, and those falling behind, in overall RE capacity additions. Thus, even as Rajasthan surges, most other states in North India, and almost all of the East, has fallen well behind. The situation in the north could of course change as the massive project planned for Ladakh moves ahead.

Similarly, the survey  does exhort the need to plan better for energy storage, and the importance of not being left behind in the race to develop better technologies and have better control over supply lines. The survey highlights the PLI scheme for solar manufacturing as well as battery technology as key steps towards this.