Renewable energy – is it working for India?

Indians are amongst the lowest consumers of power on the globe and yet a significant part of the rural population doesn’t even have a light bulb to brighten up their lives. Current costs of transmission, generation far outweigh the need for consistent access to electricity, a dream still, for most of the remote habitations in the nation. Their hope increasingly lies in Renewable Energy based solutions which are much less complex to install, operate and maintain.

Table 1: Number of people (million) without access to electricity by continent

Source: World Energy Outlook 2011

Coal based thermal plants generate almost 50% of power nationwide and cause more than 70% of combined atmospheric pollution, with adverse local ecological impact and is harmful to humans. Less than 10% of the power that reaches consumers is truly from renewable energy sources, and no, we won’t consider nuclear as one of the contributors. The reasons; nuclear waste is extremely hazardous to all life and most power plants can’t withstand severe natural calamities, followed by their after effects, no matter the bravado i.e TEPCO, Chernobyl, several radioactive poisoning scares, inadequate response mechanisms, quality and other issues as well.

Exacerbating the power generation problem in India, is that for every KWh unit of power generated almost a third is lost due to our poor transmission and distribution infrastructure.

India has a current installed power generation capacity of 180 GW+ which translates into a loss of more than 60 GW worth of power generation. The power generation for the last fiscal was 811 Billion KWh Units as against a target of 830 BU a shortfall of just a little more than 2%.

Power utilities lose between Rs. 50,000 – Rs. 75,000 Crores annually on transmission and distribution inefficiencies as well as theft, more than enough to adequately feed more than 60 million poor annually. This in turn has a debilitating impact on the economics of inefficient Transmission and Distribution utilities, which are mostly bankrupt due to mismanagement as well as having to cater to political compulsions.

Renewable energy has only recently begun to gather steam with the launch of the Jawaharlal Nehru Solar Mission (JNNSM) by the Ministry of New and Renewable Energy (MNRE) which has set a challenging target of 20GW of Multi MW scale solar power plants to be connected to the grid by 2022. When the mission launched there were fewer than 10MW of solar power plants connected to the national grid. As of today approx. 80 MW is online and expected to multiply two hundred times that amount in little over a decade. The MNRE’s Strategic Plan For New And Renewable Energy Sector For The Period 2011-17 was also released in Feb with a view to promote renewables in a concerted fashion. The 12th plan for energy has renewed focus on alternate forms of energy with the shortfalls in coal quality and quantity plaguing the country.

The initial two phases of Gujarat solar made it the choice of developers in India with a capacity of 716MW of Power Purchase Agreement’s (PPA) signed for a single state compared to 704MW under the JNNSM umbrella for the country as a whole. Under JNNSM, 37 developers were awarded PPA’s signed for 615MW (PV & CSP) – under reverse bidding and a further 84MW of PPAs migrated from the original applications for a fixed rate for a period of 25 years. Additionally under the MNRE’s umbrella, 98.05MW was also registered for Generation based incentive under Guidelines for Rooftop and other Small Solar Power Plants.

Source: MNRE Annual Report 2011

The total potential for renewable power generation in the country as on 31.03.2010 was estimated at 90,313 MW (Table 1) excluding Solar whose potential dwarfs all others. Though the two key factors against solar today are, initial cost of plant investment and the lowest efficiency of all renewable technologies resulting in some of the lowest IRR’s in the segment.

The 90+ GW figure includes an estimated nationwide wind power potential of 48,561 MW (54%), Small-hydro power potential of 15,385 MW (17%) and 22,536 MW (25%) from bagasse-based cogeneration in sugar mills based on the Energy Statistics of 2011 released by the Ministry Of Statistics and Programme Implementation.

The geographic distribution of the estimated potential across States, reveals that Karnataka has the highest share of about 14% (12,948 MW ) followed by Gujarat with 13% (11,364 MW) and Andhra Pradesh 10,015 MW (11.1%), mainly on account of wind power potential. The estimates of the Ministry of New and Renewable Energy for solar energy potential are estimated at 20-30 MW per Sq.km. for most parts of the country.

Table 2: Sourcewise and Statewise estimated potential of RE Power in India as on 31st March 2010

India is fifth on the list of wind generating nations and a majority of India’s renewable power is currently contributed by Wind. As of 2011, installed capacity crossed 14.5 GW’s essentially driven by the Income Tax Holiday as well as Accelerated Depreciation model and lately Generation Based Incentives.

There are a few high (PLF) wind corridors left to generate significantly more and the maximum generation of 45GW would only be equivalent to less than a third of a similar rated conventional thermal power plant. The total estimated wind potential will amount to just 5% of the all generation in 2030 with most capacities concentrated in Tamil Nadu, Rajasthan, Karnataka, Gujarat and Maharashtra. However since wind is an inconsistent power generator relying heavily on “banking” of power with state distribution utilities, it is unviable for base load and thus not yet a conventional power replacement. There have been efforts in planning & forecasting of wind generation but haven’t really taken off.

Table 3: Wind Capacity Utilization Factors in some leading wind states

Small Hydro, projects of less than 25MW, is another area of energy where a number of incentives by the MNRE in the form of DPR, Loan and capacity subsidy provided, has ensured a steady stream of projects. An official figure of the overall potential is 15 GW with the installed capacity as on March 2011 - 2953 MW from 801 projects and another 271 projects of 914 MW under construction. MNRE also has an extremely beneficial scheme to promote upgrade / development of watermills and installation of Micro Hydel projects and in select border states, provides almost 100% finance for such microhydel projects.

One of the least exploited sources of renewable energy has been geothermal and tidal to date, with negligible activity occurring in this space. The potential is also one of the lowest in the Renewable Energy space at just 10,000MW with no generating projects on the ground as yet. MNRE in September called for Guidelines for Implementation of R&D-cum-Technology Demonstration and Resource Validation Multi-purpose Project for Power and Energy Generation from Geo-thermal Energy Resources in India to exploit geothermal resources especially those beneath hot springs. Geothermal power plants do not burn fuel like fossil fuel plants, so they release relatively lower air and ground emissions. A case study of a coal plant updated with scrubbers and other emissions control technologies emits 24 times more carbon dioxide, 10,837 times more sulfur dioxide, and 3,865 times more nitrous oxides per megawatt hour than a geothermal steam plant. A caveat here is that there have been concerns around ecological impact as well as geological stability which have also led to unsafe plants being shut down.

Table 4: Emission comparison between a geothermal and coal thermal power plant

Source: A Guide to Geothermal Energy and the Environment - Geothermal Energy Association USA

Biomass consists of 32%+ of the total primary energy use in the country with more than 70% of the country’s population depending upon biomass for its energy needs. Biomass based power projects have seen the slowest growth of them all with barely a GW (excluding cogeneration from bagasse -158 bagasse cogeneration projects in sugar mills with surplus capacity aggregating to 1666.0 MW) installed across 2 decades of government support. This is primarily due to feedstock supply chain, price and availability issues.

MNRE has now started encouraging developers to engage in captive plantations to resolve feedstock issues. The annual feedstock generation through agricultural residue and forest biomass is enough to run 20GW+ of various types of Biomass based power plants. The way forward would be to ensure long term feedstock supply chain issues are encouraged through the use of professional contract management as well as cultivation of captive plantations which have a net positive effect considering use of marginalized land and wastelands.

Municipal solid waste has essentially been a non-starter due to the non-segregation of waste into dry, recyclable and wet waste as well as the supply chain management based on the lethargy of civic run bodies. Also wet waste reduces the amount of power generated drastically and Indian waste is high in moisture, thus reducing the viability of most projects. In May 2011, MNRE under the “Programme on Energy Recovery from Municipal Solid Waste” has allowed for financial support for pilot power generation projects. This scheme provides financial assistance for setting up of five Pilot projects for power generation from MSW in accordance with the decision of the Supreme Court on May 15, 2007, and is also based on recommendations of an Expert Committee. The DHRHP for the IPO of A2Z, highlights the risks of MSW projects.

Large Fuel Cells (MW+) haven’t yet made it to the main stage of power plants with only a few claiming grid sizes but aren’t proven yet. Similarly electric vehicles still can’t replace fossil fuel due to range, availability, scale, etc. though the Chevy volt does seem like a push in the right direction combining fossil fuel for generation of electricity as well. MNRE has also evinced interest in the technology and are looking for products / technologies to further.

Last but definitely not the least, is Solar power, available in the two forms of heat and light. Power plants generating electricity using heat are termed Concentrated Solar Power (CSP) and those using light are Photovoltaic (PV) projects. Gujarat and JNNSM (MNRE) have been the main drivers of Solar grid connected solar power plants in the country.

The installed capacity of grid connected PV power is currently around 80MW and 3MW for CSP across the country, with at least 300-400 MW more expected by end of 2011. A large surge in CSP capacity is expected by end of next year, though deployments with or without storage will be key to its success as a grid technology. Current JNNSM grid policy does not encourage round the clock generation of power using storage mechanisms which limits solar energy tremendously which Gujarat allows.

Grid based Solar is now gathering steam in the country and the associated risks which initially made financial institutions unwilling to lend are now going away. Current drawbacks though also exist in the form of copious land usage, adequate recycling as well as manufacturing and generating efficiencies.

An often overlooked area is Solar Water Heating, which has acquired a decent installed base. Solar’s off grid potential for power and heating is much higher than the expected mainstream capacity addition which the MNRE is currently aggressively promoting. As of Sept 2011, the installed base was 38.5 MW for off grid PV systems and 1.2 Lakh square meters for solar thermal collectors.

Currently power plants based on Solar require twice or more (with storage) of the initial capital for a coal based thermal plant while Wind farms need similar capital, but both generate less than a third of equivalent conventional MW capacities. Geothermal, Hydro and Biomass match conventional plant load factors but generation is limited and biomass suffers from issues as any fossil fuel feedstock based plant would.

Table 5: A comparison of GHG emission per kWh of energy generated

Source: Wikipedia – Comparisons of life-cycle greenhouse gas emissions

To sum up, the sun shines during the day, wind is intermittent, biomass supply chains largely local and limited, geothermal space restricted and small hydro a cap on generation. However, their true impact currently lies in the carbon footprint displacement (Table 5) as compared to similar non-renewable sources.

For now, hope lies in rapidly creating a distributed smart grid powered by various renewable technologies combined with decentralized distribution networks that store energy in the day and release it in the night in a planned and consistent manner. Renewable energy can power some portion of our daily energy diet, but we still need to see a tremendous revolution in its funding, storage, transmission and management for them to compete head to head with conventional power sources.

RE’s quantum leap would come in the form of large scale grid storage technologies, improved energy with Transmission & Distribution efficiencies, aiding round the clock consistent and efficient power generation - which are the need of the hour. With all these easily a decade away, dirty power will continue to stay a reality and Renewable Energy will just be a good to have for now.

The author leads an Advisory organization focused on Renewable Energy Projects and also runs two of the largest renewable energy forums on linkedin.com dedicated to the Indian subcontinent.

You can reach him at ritesh@natgrp.net and the forums at Renewable Energy and Cleantech Forum - India as well as Solar Energy Professionals - India

*Most estimates are availed from government sources which may conflict with other sources (private and government) at various points in time

Editor's Note: Ritesh Pothan leads an advisory organization focused on renewable energy projects and also runs two of the largest renewable energy forums on linkedin.com dedicated to the Indian subcontinent.

You can reach him at ritesh@natgrp.net and the forums at Renewable Energy and Cleantech Forum - India as well as Solar Energy Professionals - India.