India must de-risk solar power sector: Ajay Mathur, DG, TERI

TERI Director General Ajay Mathur shares a perspective on India’s achievements in the energy and environment space and the institute’s own work.

India has made phenomenal progress on its renewable energy agenda but needs to take urgent measures to mitigate perceived risks by investors on multiple fronts, believes Ajay Mathur, Director General of The Energy and Resources Institute (TERI). In an exclusive interview with ETEnergyworld, Mathur shares a perspective on the development of the country’s energy systems and the major highlights of the institute’s own work. Edited excerpts..

What is your view on the efforts being made towards adopting renewable energy in India? Are we on the right track?

India is marching ahead on its renewable energy journey by implementing one of the largest programmes globally. India’s Renewable Energy (RE) programme with respect to utility scale power had a focus on wind power until 2010, when solar power was also brought into mainstream through a special policy framework launched in the form of National Solar Mission. This helped to set up an ecosystem and evolve a public policy framework that pushed the development of solar power addressing financial and regulatory aspects. These included financing elements (grants and subsidies), fiscal instruments (coal cess, accelerated depreciation, tax holidays for the investment, concessional excise and custom duties on imports), and regulatory provisions viz. Renewable Energy Certificates (REC) and Renewable Purchase Obligation (RPO) with a separate window carved out for solar within the overall provisions, priority for solar power in merit order dispatch schedules, and waiving off transmission/evacuation charges for solar power in CTU system.

Enthused by the initial success, Government of India revised targets of renewable energy to 175 GW by 2022 with solar and wind targets of 100 GW and 60 GW, respectively. Dynamic policy push by the Government has made the target look achievable with solar tariffs seeing continuous fall breaching grid parity levels much earlier than envisioned. At present, the total installed RE capacity has surpassed 75 GW at the end of 2018, with wind and solar capacity of about 35 GW and 26 GW respectively.

It is evident that the progress in solar has been phenomenal. However, perceived risks by the investors have increased manifold in the recent past on account of various reasons, including cancellation of tenders, lack of clarity on the impact of GST, and imposition of safeguard duty on imported panels. This has dampened the investors’ sentiments as substantial capacities are under implementation. In order to ensure continuity in growth of the solar sector with downward trend in tariffs, it is important to work on these issues and initiate de-risking measures. These may include, for example, design of bid conditions to provide level playing field to all investors, adhering to bid provisions post culmination of transparent selection process, introducing steps to handle delays in a reasonable and timely manner where developers have no control (such as, construction of transmission and evacuation infrastructure and land acquisition/ availability). Several of the risks mentioned herein have been addressed to some extent; however, the process should be seen as dynamic and needs to be continued in dialogue with the stakeholders.

What are TERI’s chief recommendations to the government on improving the state of the energy sector in the country?

As India moves rapidly towards having an electricity system with high levels of solar and wind energy, it is extremely important for the country to start looking at mechanisms that can make the electricity system absorb these variable sources of energy. By making both electricity supply and demand more flexible, India can achieve grid integration of fairly high levels of clean energy, thus creating a modern, low cost energy system with reduced carbon emissions. Hence, it is important for India to work on increasing flexibility requirements of the grid using a combination of investment, incentives and technologies that change how and when consumers use energy (including Demand Response Programs); increase the flexibility of power generation, and; encourage development of new energy storage options.

What has been TERI’s role in addressing the issues related to Climate Change?

Climate change has adverse impacts on all sectors especially natural resource dependent sectors such as agriculture and forestry. In order to prepare for adapting to these impacts and building resilience, TERI works with multi-level governments and non- government bodies through its technical inputs. It has helped Maharashtra prepare its state action plan for climate change. TERI’s climate and hydrological modelling assessments help in further developing an understanding of climate variability at different spatial and temporal scales, thus identifying risks for sectors such as oil and gas. Extending the expertise into the domain of forecasting extreme weather events, such as floods, it has also provided information to assist policy planning and disaster management.

In the global arena, its technical inputs to the national government help inform the climate negotiations and put forth the developing countries’ perspective. Creating a robust monitoring and transparency framework is necessary to achieve the set climate targets. With specific focus on Articles 4, 13 and 14 of the Paris Agreement, TERI is working towards elaborating on various elements of the Articles, and providing inputs for national communications and Biennial Update reports to the Government of India.

India’s developing economy has potential for energy efficiency through improvement in the existing technologies as well as introducing new ones in the cooling space. The institute has undertaken research work towards developing various techno-economic feasibility scenarios for HFC phase down in the country, and integrating energy efficiency with the Montreal Protocol. The work carried out by TERI culminated into the India Cooling Action Plan as an integrated policy framework.

Can you brief us on some of TERI’s most important projects in both the environment and energy space?

TERI’s activities in the energy and environment space are broadly focussed on three themes – promoting efficient use of energy, increasing access and uptake of clean energy sources and reducing the impact on environment and climate. In the field of air pollution some of the major projects undertaken by TERI include urban or regional air quality management studies involving monitoring of air pollutants, inventorisation of source emissions, state-of-the-art simulations and modelling of air quality, and development of management plans based on this knowledge; Source apportionment studies for various cities (Bangalore, Unchahar, Delhi-NCR, Ludhiana) to predict urban/regional scale of pollution as well as emerging pollutants, like ozone. TERI is now working on source apportionment studies for Patna and Surat and plans to start work in four more cities shortly; Developing national emission inventory database and knowledge networks; Developing and testing spatial maps and air quality forecasting models for Delhi; Development of emission standards for diesel locomotives in India; Studies establishing the linkage of ambient air pollution with health and agriculture; and, Indoor air pollution in urban buildings and rural households.

We also have multiple ongoing projects in the electricity and renewable energy fields. These include exploring and developing electricity supply mix scenarios for India to 2030; analysing and projecting Indian electricity demand up to 2030 and; developing a roadmap to a flexible, low-carbon Indian electricity system.

India’s transition to a high renewables share in the power system is proceeding on the basis of the low cost of wind and solar as revealed in competitive auctions over the past few years (2.50 – 3.00 Rs/kWh, compared to > 3.5 Rs/kWh for coal). However, variable renewables create challenges for the stability of the power grid, and unless addressed properly, these challenges can raise the total cost of renewable electricity to the power system. TERI is therefore studying options for integrating large shares of cheap but variable renewable energy with the grid, without compromising on either reliability or cost. It is involved in multiple studies analysing the technical impacts of increasing the levels of renewable-energy based generation (with focus on solar rooftop) on distribution networks in India and suggesting possible mitigation measures. Work on pilot implementation of Battery Energy Storage Systems (BESS) at the distribution network level has also been initiated.

Apart from research studies, TERI is also helping to build the capacity of engineers in various electricity distribution companies on a wide variety of topics related to electricity distribution, demand side management and integration of renewable energy in the electricity mix. In this context, TERI recently organised capacity building programme for 860 officials from six distribution utilities in Southern Grid region on demand side management and energy efficiency. Similar programmes are also planned for utility officials in North Eastern Grid region. In addition, TERI recently organised a capacity building programme on Grid Management and Power Market Development for Kerala State Electricity Board Ltd. (KSEBL) officials to upgrade their skill set directed towards this changing paradigm.

Source: energy.economictimes.indiatimes