Renewable Energy Trends 2017

8 significant trends that are creating waves in renewable energy sector in India.

With India targets to have 225 GW of renewable and clean energy sources by 2022, the renewable energy sector will witness a new dawn. Renewables Global Status Report 2017, released by REN 21, reveals that India accounted for 5 per cent of the world’s renewable-energy capacity and invested around ` 64,990 crore in the sector in 2016. Further, according to a report by global consultancy Ernst & Young, last May India came in second to only China in the renewable energy attractiveness index.

Here we highlight some of the major trends that are creating waves in renewable energy segment.

1.
Attracting investments
The most significant trend in renewable energy sector in India is the large-scale replacement of domestic investors with global investors, mentioned U B Reddy, Managing Director, Enerfra Projects (India) Pvt Ltd.
Historically, renewable energy was dominated by wind and almost completely built by Indian promoters with other businesses such as textiles, cement, food, and petroleum. Now, along with solar, the industry is driven by global private equity and utility investors. According to Reddy, the trend towards large auctions will accelerate this further as only a highly capitalised player has the ability to provide the necessary bank guarantees and assurance to raise capital.

Without question, foreign capital is necessary and welcome in India. However, Reddy admits, “A sense of balance is important—a balance that has been maintained in the thermal sector for historical reasons.” While both domestic and foreign investors can bring up the assets, domestic capital is more effective in re-investing dividends, original capital and its gains within India, creating sustainable jobs and infrastructure. “PE investors will typically sell the assets after a certain horizon and take dividends, original capital, and gains outside India,” Reddy warns.

He adds, “India needs to acknowledge this trend and take corrective measures to bring back the balance. China has done this very effectively.”

2.
Solar modules finally become cheaper!
Globally manufacturing capacities for solar modules have seen a big ramp up in last few years. This has resulted in significant drop in module prices and thus making it more affordable and within the reach of consumers, informs Sitapathy Chavali, Founder and CEO of Greenrays Enersol Pvt Ltd. Today solar plant as an alternate source of power is actively discussed by many industries, whereas earlier it was never taken seriously due to its high cost and technology or policy challenges.

3.
Storage is the next big thing
A 2014 market study by the Indian Energy Storage Alliance has estimated a market potential of 15-20 GW of storage by 2020. In its recent update, which takes into consideration current opportunities as well as a detailed overview of various growth scenarios and key government initiatives, the Alliance has revised the potential significantly to over 70 GW and 200 GWh by 2022.

In India, the energy storage market for off-grid renewable energy in India would be worth Rs 16,500 crore by 2022, reports the Council on Energy, Environment and Water (CEEW).

According to Kunwer Sachdev, Founder and Managing Director, Su-Kam, “Storage is the next big thing in the renewable energy sector as providing power as and when needed by the consumer is the important factor that contributes to its growth.”

Shailesh Patni, Head – Sales and Marketing, Jyotitech Solar LLP adds, “The storage battery technology shall be a part of future energy infrastructure apart from hybrid of solar and wind for better utilisation of external power evacuation, lower cost of generation and catering to grid peak demands.”

4.
Falling renewable energy costs
In India, renewable energy sector has promised to deliver cheaper electricity in almost every passing tender. Today the price of solar energy is lower than the price of thermal and nuclear energy. On 12th May, India recorded its lowest-ever solar tariff of ` 2.44/unit of electricity.
Cost of solar power has also reduced dramatically. B.S. Yadav, Managing Director, Ultimate Sun Systems, observes, “From $60 per watt in the mid-70s to less than $1 per watt, today. Andhra Pradesh touched a record low of ` 4.63 per kilowatt hour (Kwhr) for a 25-year tariff. Even if we add the distribution costs, it will be lower than the current cost of commercial power in 12 states. Recent bids for thermal power in Andhra Pradesh were ` 4.27-4.98/Kwhr, the difference with solar energy being quite marginal. As coal prices increase over the next 20-30 years and solar costs come down, it makes more sense investing in solar.”

This may be good news for the procuring utilities but it has got lenders worried on the sustainability of the projects and the security of their loans.

5.
Competitive bidding to achieve low tariff
In India, competitive bidding has replaced the earlier feed-in tariffs system where a fixed tariff was decided for renewable power producers. However, Dr Sanjiv Kawishwar, Sr. Vice President, ReGen Powertech reveals, “Competitive bidding has put huge cost pressure on wind sector players. Tariff per unit (kWh) is going down below survival level for wind and solar industry. It may have positive impact in the long term but the negative impact on the wind industry is visible and companies are reducing every day.”
Today every state wants to keep the last bid price as baseline and wishes to achieve still lower tariff. Kawishwar further cautioned by saying, “Due to competitive bidding the cheap, low quality wind turbines will be connected to grid and that may not last for designed life time. Every wind turbine manufacturing company have downsized the manpower as well as operations and will close down if the situation does not improve.”

Kawishwar anticipates that wind energy installations may fall by 80 per cent this year and existing companies will not be able to sustain such a down trend.

6.
Solar rooftop net metering
Policy initiative and favourable implementation of solar rooftop net metering process in most states is a significant factor which will drive the growth of solar industry in consumer sectors like residential societies and industries, believes Chavali from of Greenrays Enersol Pvt Ltd. He said, “This not only helps the end-user in monetising the unused rooftop space of the building or industry, but also allows selling of excess power to discom, thereby doing away with storing of power in costly batteries banks.”

This will fuel next wave of growth in solar industry where retail consumers like residential and commercial societies, industrial units will reap the benefits and can save on their power bills. However, he suggests, “Discoms to encourage and process net metering requests on fast track so that benefit can really reach the end users.”

Jimmy Desai, Director, PV Power Tech said, “Solar is now becoming a mainstream choice of energy for the masses. The drop in prices has made it cheaper in most cases compared to conventional power sources like coal based power and diesel based power generation.”

One of the sectors within solar which is benefitting from this trend is solar rooftop. “We at PV Powertech are seeing a huge surge in request for solar rooftop solutions from not just private organisations but also from small housing societies and individual house owners,” admits Desai.

He forecasts, “Rooftop will be in a very short time one of the large source of power generation in the country. It will effectively phase out the Diesel based generating systems which are not just expensive but also detrimental to the environment.”

7.
Peaking power from hydro plants

With proposed target of 175 GW of RE generation by the Power Ministry by 2022, the net load curve across India is most likely to follow a belly and a steep neck shaped curve which rises in the morning during the day, falls rapidly in the afternoon and then rises steeply again to meet the evening peak. According to Ashok Sethi, COO and ED, Tata Power, this shift in load curve would lead to a requirement of 70 GW of peaking power. Stabilisation of power prices in the long run, ensuring energy security and integrating renewables into the grid, can be best achieved through hydro power in the form of “peak capacity”. Every country goes for exploiting its renewable resources for its long term energy security. Therefore, Sethi suggests, “India should also exploit its hydro power and its “peak power” capacity to achieve economic tariffs, energy security, grid stability and integration of solar and wind power into the grid.”

Peaking power from hydro plants (pumped storage units and hydro plants with peaking pondage) is more cost effective compared to other sources such as gas based thermal power plants, opines Sethi.

Gas price is very volatile and this natural resource is not available in India. India has identified 63 pumped storage sites with a potential capacity of 96524 MW. However only plants with a capacity of only 4,785 MW have been constructed so far and plants with a capacity 6,930 MW are at various stages of development. Construction of pumped storage plants is a huge opportunity for India to achieve grid stability, energy security and integration of renewables at economic prices without incurring significant natural cost.

8.
Advancement in solar lighting
Over the past few years, solar lighting technology has evolved manifold thanks to continuous innovation in the product development process. Old model solar street light with external battery box has become a thing of the past. According to Sreejith Sreenivasan, CEO, Sun World Solar Systems, “One of the most significant technologies we notice is for solar lights. New all-in-one solar lights made a drastic change in the market.”

Old model solar street light with external battery box, the external wiring has many disadvantages like robbery of batteries from battery box, poor performance in the rainy season, more product cost and maintenance cost with small life span. “Sun World Solar Systems comes with the perfect solution in the market. Our solar lights come with lithium PO4 batteries inside the LED panel. Efficient LED lights and solar panels make our lights one of the favourites to our customers,” claims Sreenivasan.

He adds, “Comparing to normal old model solar lights, our solar lights get into the hands of customers for one-third price comparing to old model solar street lights with low service costs and outputs the best performance even in rainy season. We provide 3 years replacement guarantee for our lights which makes us the trusted one.”