India balancing energy security to meet rising demand

Technological advancements, grid modernisation, and strategic investment plans are paving the way for the nation to achieve its energy goals.

India is at a critical juncture in its energy transition journey, grappling with the dual challenge of meeting its energy security needs while striving to enhance the integration of renewable energy sources. The country’s reliance on oil and coal is deeply entrenched, but a phased and strategic approach is essential with pressing climate commitments and a rapidly increasing energy demand.

Let us explore the country’s current scenario and future prospects for energy security. We will draw insights from industry experts and examine emerging trends within the sector.

Key challenges

India faces several key challenges in balancing its reliance on oil and coal with the need for increased renewable energy integration. A significant portion of the country’s energy infrastructure is built around fossil fuels, making it difficult to transition rapidly to renewables without substantial investment. Also, intermittent renewable sources like solar and wind require robust grid management and storage solutions, which are still underdeveloped in many regions. Additionally, the economic implications of phasing out coal, particularly for communities reliant on coal mining, pose social and political challenges. Moreover, India’s energy demand is rapidly increasing due to urbanisation and industrialisation, complicating the transition. Above all, securing financing for large-scale renewable projects remains a hurdle, especially in global economic uncertainties. Balancing these factors while ensuring energy security and sustainability is crucial for the future of energy in India.

Jayant Sinha from Entruist Power emphasises the necessity of a phased approach in reducing reliance on coal and gas while acknowledging the challenges ahead. He states, “We cannot, overnight, reduce… coal will not go away very soon.” Despite ambitious targets—like achieving 50 percent renewable energy penetration by 2030 coal will remain a significant component of the energy mix in the country for the foreseeable future. Rajesh Arora from Delhi Transco provides further insights, explaining that while India aims for a massive increase in renewable capacity, notably solar, the current dependence on coal stands at 54% of the installed capacity. “We aim to have 500 gigawatts by 2030,” he says, underscoring the need for both solar and wind, bio, and even hydrogen resources to meet growing demands. The focus on solar energy is particularly crucial. Arora notes that “the maximum share is given by solar energy,” with plans to comprise a significant part of the energy portfolio. The financial implications of this transition are significant, as outlined by Gaurav Upadhya from IEEFA. He highlights that developing countries face challenges in meeting their Nationally Determined Contributions (NDCs). “The large amount of financial implication will be there for developing countries,” he warns, indicating that international policies will require accelerated transitions. This shift reallocates revenue from fossil fuel-dependent states and necessitates substantial investments in infrastructure and technology.

A critical concern is the grid’s stability as renewable energy sources, particularly solar, come into play. Rajesh Arora stresses the importance of addressing the intermittency of solar generation through energy storage solutions. “If you don’t have a storage system… you are not going to meet the actual demand,” he emphasises. This highlights the need for advanced storage technologies like battery storage or pumped hydro to balance supply and demand effectively, especially during peak periods.

Moreover, the necessity for improved transmission infrastructure cannot be overstated. Arora explains, “You must improve your power transmission capability… because the consumer is at another end.” Enhancing this capacity is vital for ensuring that renewable energy generated in one region can effectively supply high-demand areas, thus contributing to energy security. Gaurav Upadhya highlights the role of distribution companies (DISCOMS) in this transition, pointing out their current vulnerabilities. “DISCOMS right now is the weakest link in our energy security story,” he notes. The financial strain on these entities could lead to increased electricity tariffs, impacting consumers. This situation necessitates innovative financing solutions and supportive policies to strengthen the energy sector.

Both challenges and opportunities mark the path toward achieving a balanced energy mix in India. As stakeholders collaborate to address these technological, infrastructural, and financial challenges, the transformation narrative is one of resilience and commitment to sustainability.

Aggregate technical and commercial losses

AT&C (Aggregate Technical and Commercial) losses pose a significant challenge to energy security in India. These losses encompass technical losses due to inefficiencies in energy transmission and distribution and commercial losses arising from issues like theft, billing errors, and lack of effective metering. High AT&C losses lead to reduced revenue for utility companies, undermining their ability to invest in infrastructure and improve service delivery. This hampers energy security and affects economic growth, as reliable energy access is crucial for industrial development and quality of life. Utilities must adopt advanced technologies such as smart grids and real-time monitoring systems to combat these losses, enhance regulatory frameworks, and promote customer engagement. Addressing AT&C losses is essential for ensuring sustainable energy supply, improving the financial viability of power systems, and ultimately achieving energy security for the nation.

Reducing Aggregate Technical and Commercial (AT&C) losses in the Indian power sector underscores a critical need for technological advancements and strategic interventions. Rajesh Arora noted a dramatic improvement in losses, stating, “In 2003, losses were around 50 percent, but now they have decreased to about 6-7 percent.” This significant change can be attributed to various post-improvement measures and the digitalisation of collection systems, which have enhanced overall efficiency. Arora stresses the necessity of focusing on technical losses, suggesting that adopting the latest technologies and implementing condition monitoring could lead to further reductions. “If you adopt new technology and state-of-the-art infrastructure, you can significantly reduce AT&C losses,” he emphasises. He points out that government support and sustainable practices are crucial in facilitating these advancements.

Jayant Sinha shares the measures being taken in new substations across India, highlighting improvements in quality. He mentions using higher efficiency transformers, copper conductors, and phase balancing, stating, “We are ensuring all networks are mapped on GIS and conducting load flow analyses to identify where losses occur.” This proactive approach to managing technical losses is vital for enhancing the overall efficiency of the power sector. Integrating advanced technologies like sensors and telemetry allows real-time monitoring, providing immediate insights into voltage, current, and power quality.

Addressing the importance of energy efficiency and demand-side management, Jayant Sinha notes, “Consumers can implement demand-side initiatives to improve efficiency,” suggesting using shunt capacitors for power factor correction. He underscores that customer participation is essential for a holistic strategy to combat losses, combining supply- and demand-side measures. Gaurav Upadhya highlights the ongoing challenges with T&D losses, stating that they are estimated at around 20 percent for 2022. He stresses the urgency of addressing these issues, particularly in rural areas where collection efficiency drops significantly. “In rural areas, the efficiency of collection reduces drastically,” he points out. To combat this, some Discoms have initiated programmes that involve local self-help groups to aid in revenue collection. This innovative approach aims to improve the collection process in regions that struggle with efficiency.

Additionally, implementing prepaid meters is an effective means of reducing commercial losses. Gaurav remarks, “Prepaid meters ensure payment before consumption, eliminating collection issues.” This system allows consumers to pay upfront for their electricity, reducing the risk of revenue losses. A critical theme emerges around the fundamental principle of Measure, Monitor, and Control (MMC).

The importance of comprehensive data collection and analysis cannot be overstated. Accurate metering and monitoring enable utilities to identify vulnerabilities and take corrective actions, ultimately enhancing the efficiency of the entire system. By employing smart meters and other technologies, stakeholders can gain deeper insights into consumption patterns and areas with high losses, leading to targeted interventions.

Accelerating  investments

Power sector investments in India are pivotal to enhancing energy security and meeting its growing demand sustainably. With an ambitious goal to reach 500 GW of renewable capacity by 2030, the focus on renewable energy sources, particularly solar and wind, promises to reduce dependence on fossil fuels and cut emissions. Investments in green hydrogen, battery storage, and grid modernisation further strengthen the sector, addressing intermittency challenges and enhancing grid stability.

India must confront its current limitations to compete with foreign companies offering cheaper solar panels. As Gaurav mentions, India trails behind, particularly when comparing its scale, technology, and the export incentives offered by countries like China. He emphasises that “India needs to invest more in R&D to develop its intellectual capacity” in solar, battery, and hydrogen technologies to bridge this gap.

The government has taken measures, such as the Production Linked Incentive (PLI) schemes and anti-dumping criteria, to protect local manufacturers. However, more is needed, including scaling domestic production capabilities to build resilience and reduce import dependency. “Providing a little bit of protection to our domestic industry” and encouraging collaboration is essential, notes Gaurav. Ultimately, investments in R&D and a sustainable support system are essential to boost the country’s competitiveness and ensure energy security, helping India create a foundation for long-term growth and self-reliance in clean energy.

In conclusion, India’s pursuit of energy security presents a blend of substantial challenges and promising opportunities. The country must balance fossil fuel reliance with ambitious renewable energy targets, requiring substantial investment in technology, infrastructure, and grid stability. Reducing AT&C losses, modernising the power sector, and addressing rural collection inefficiencies are crucial for sustainable progress. Investment in local R&D and supportive policies can reduce import dependence and boost competitiveness in solar, battery, and hydrogen technologies. Ultimately, a phased approach guided by financial support, collaboration, and innovation will enable India to secure a resilient and sustainable energy future.