Renewable Can Stand on Its Own But the Nature of Power is Intermittent: Debasish Mishra, Deloitte India – EQ Mag Pro
It is a massive amount of change that is happening and all these segments whether it is energy or mobility, they are very much interconnected and their changes are also dependent on each other.
In a conversation with ET Now, Debasish Mishra, Partner, Energy, Resources and Industrials Leader, Deloitte India talks about the shift to renewables, policy changes, the linkages with the auto sector, storage capacities and more. Edited excerpts:
India has set a renewable energy target, a target for solar, a target for wind, so on and so forth. How practical is it to reach these targets in a certain timeframe? How feasible is it given on ground challenges, given our own cycles of movement in India?
India has done tremendously well in last 5-7 years in the area of renewable investment. In fact, most of the investment is on the generation side. Incremental investments on the generation side are happening. In 2014, we had 33-34 gigawatt of renewable capacity and some time back, we crossed 100 gigawatt of renewable capacity.
India has set itself a target of 450 gigawatt of renewable capacity by 2030 and that is our commitment to the global community. And given the fact that solar PV now comes at around Rs 2, Rs 2.30 on a regular basis, it has come to a point where it is economical to do renewable. So we are very much on track in terms of achieving energy independence.
A big chunk of our energy requirement comes from fossil fuel. How soon do you think we will be able to shift the majority to renewable energy?
That will take few decades. In fact, the power sector depends almost 75% of its fuel from the coal side and that is not going to go away in a hurry. We are at a point of time where renewable plus storage will soon become a viable option for utilities.So it might take India time till 2050, 2060 to actually turnaround the case where we are more dependent on renewables than fossil fuels.
The other angle to moving to renewable energy is also the costs involved. Can India really afford this transition to renewable energy or do you think we will have to invest on war footing?
India is very nicely placed. We are between Tropic of Cancer and the Equator and we have ample solar potential. And solar because of PV prices, Photovoltaic panel prices have come down in this particular region. But the point is the intermittency of this energy, this comes only during the day time, it comes for 250 days in a year or 300 days in a year, that we will overcome if storage prices come down.
Today storage prices are around 140 dollars, what is expected is in the next four, five years that will come to around 80-90 dollars. So solar plus storage will become utility scale and it will come at a price point where even utilities will not prefer to go for pole based power and they will go for this kind of storage based renewable power.
Renewable can stand on its own but the nature of power is intermittent, that is the challenge we have today. Soon with technological advancement around storage, we will overcome that as well.
The other angle is the kind of disruption that it brings with it, for the auto sector as an example. Do you think the auto sector in India is ready for this big transition and the entire multiplier effect that it has with various components, commodity costs and of course, the overall cost which is involved to try and bear this disruption?
The future of energy, the future of mobility is also going through a massive amount of transition. The internal combustion engine in India is already in the middle of a transition. You would have seen CNG, LNG and a lot of cities are now connected to the gas grid. So India’s mobility transition will go through a kind of gas based mobility also but what we are also expecting is that by 2030 to 2035 we will have electric vehicles, we will have hydrogen based fuel cells related mobility and we will have this gas based and the IC engine based mobility.
The market will go through a lot of changes and some of the changes in certain micro segments will happen much faster than other segments. A lot of two wheeler EVs are getting launched and that is a segment where India is a very large market.
When that adaption happens at the right price point, then that would change the way India is consuming diesel and petrol today. So the entire planning has to be recalibrated going forward. It is a massive amount of change that is happening and all these segments whether it is energy or mobility, they are very much interconnected and their changes are also dependent on each other.
Storage is a challenge, transportation of hydrogen based energy could be a challenge. With renewable energy as a whole, bidding processes in India take a little while until they become clearer or more transparent. What are the challenges you see for moving towards green hydrogen based energy implementation?
The biggest challenge the sector is facing is the financial health of the discoms. Often the Central government has very ambitious plans around renewables, around green hydrogen, but lot of the implementation will happen with states.
Discom financials are not at their best of the conditions. Although, India has gone up from 33 gigawatt to 100 gigawatt, most of the equipment, particularly solar is imported. The government has come out with the production linked incentive schemes and India is trying very aggressively to create that manufacturing ecosystem.
We are pretty well placed to take advantage of giga factories for storage, green hydrogen and electrolysers. These are at very nascent stage of development in the entire global world as well. So if India can latch on to that and becomes the manufacturing hub for storage, for electrolysers for fuel cells. Then India will become a net exporters of all this
I will say that it is a risk right now being import dependent but if we can create that manufacturing ecosystem. There are large corporates who have through scale and use of technology and capital deployed, really brought down the price points. India is probably doing the right thing to make that happen in the next wave of adapting new energy.