Emerging grid parity with conventional power and the short gestation periods for setting up these capacities are making renewables a more realisable option. Smart energy has an impact on five key areas, namely energy security, energy access, energy pricing, climate change and its stimulating impact on job creation and securing investment.
With respect to energy security, it must be highlighted that there is a power deficit in the country in spite of the fact that per capita consumption of electricity (879 units per year) is significantly lower than that of China (2,500 units) and of the US (12,500 units). The shortage is likely to increase in the coming years. The solution lies in ramping up power capacity based on renewable energy. Our existing smart energy capacity of approximately 30GW saves us forex worth almost $4 billion a year, calculated on the basis of the cost of importing coal.
In terms of energy access, the country has about 300 million people with no access to electricity. Renewable energy sources are abundant, and their reach is wide, especially solar power.
India is vulnerable to climate change on account of the strong correlation between temperature and agricultural output. The country must work towards reducing carbon emissions. Our existing renewable energy capacity saves about 55 million tonnes of CO2 emissions per annum.
As far as pricing is concerned, wind and solar power are already cheaper than diesel-generated power. Wind power has already achieved grid parity and solar power is expected to achieve such parity in the next couple of years.
Smart and sustainable energy sources have a bracing impact on job creation and securing investment. It’s estimated that clean energy sources have led to the creation of 391,000 direct jobs and 1.2 million indirect jobs in India. Further, it is estimated that 4.5 million direct jobs would be created by 2030 in the off-grid renewable energy sector.
We must boost clean energy investments, by private businesses and investors, with the help of a new set of enabling policies and regulations to facilitate the scaling up of the sector. The new government needs to adopt a two- pronged approach to tackle issues in the near-and-medium term and in the long term.
The near-and-medium term approach requires action on immediate issues to incentivise investments in the smart energy sector, which has seen a slowdown in the past couple of years. Some action points are creating demand for sustainable energy power by enforcing regulatory provisions, enabling renewable-deficient states to contribute toward the national agenda in promoting renewables, incentivising inter-state transfer of sustainable energy generated power, providing soft loans or hedging costs for sustainable energy projects, institutionalising centralised forecasting for wind and solar power generation, support for solar roof tops on residential segments, etcetera.
The long-term approach requires a focus on strategic developments, such as growth in offshore wind power (which has huge potential), creation of energy storage options for smart energy power, growth of hybrid installations (of wind and solar) for optimum utilisation of combined renewable energy resources at suitable sites.
All this would require concerted action and support from all stakeholders.Sumant Sinha is chairman and CEO, ReNew Power