With installed capacity of around 1.5 lakh MW (40%), India stands 4th in renewable energy capacity , 4th in Wind Energy and 5th in Solar Energy. Initiatives such as National Solar Mission, PM-KUSUM Scheme, PLI Scheme, RPO etc. have led to 250% Increase in installed capacity between 2014 to 2021.
Government has announced increasing installed capacity to 500 GW and meeting 50% of energy requirements from renewables by 2030. However, meeting these ambitious targets implies average annual deployment of 25 GW of solar and 11 GW of wind which is challenging due to
- Variability in Electricity generation makes grid integration difficult.
- Inadequate power storage infrastructure
- Location specific potential makes power evacuation difficult Ex: Ladakh
- Replacement of Feed-in-tariff with Reverse auction has made projects unviable.
- Poor financial position of Banks
- Withdrawal of concession on open access charges by states
Issues specific to Solar Energy
- Higher import dependency (78%) on solar modules
- Higher customs duty (40%) on Solar modules
- Limited progress on Roof Top Solar
- Issues specific to Wind Energy
- Slowdown in Wind Energy capacity addition.
- Limited progress in harnessing Wind Energy in states such as MP, Rajasthan
- Lack of focus on off shore wind energy projects
Trends in Subsidies in Energy Sector
According to CEEW Report, Government spent almost nine times more on subsidies for fossil fuels than for clean energy.
Higher subsidies for clean energy would attract more private investment, boost power storage infrastructure, encourage domestic production of solar modules, optimally utilise renewable energy in resource rich states and thus enable us to meet the target of 50% energy requirements.
Hence, subsidies for fossil fuels should be phased out gradually and subsidies for clean energy should increase. The National Electricity Council should be set up to lead dialogue between centre and states on electricity subsidy reform.