India’s power sector has witnessed transformational change over the past decade, with large capacity additions across both the generation and transmission segments. Meanwhile, the renewable energy sector has also grown significantly with timely policy actions and strong investor interest, leading to India emerging as a leading global investment hotspot for renewable energy. The government and the industry are now focusing their attention on emerging areas of growth such as green hydrogen, energy storage, digital power systems and offshore wind. Raj Kumar Singh, Union Minister for Power and New and Renewable Energy, shared his perspective on the progress of the power and renewable energy sector in India at various recent industry events. Excerpts…
What we have done in the power sector has brought us to the forefront of the world in energy transition. The fact that India was a developing country is in the past now. We can all be proud of the fact that we are now competing with the best in the world, and that is true for infrastructure as well. Our objective is to transform the country into a developed one, and we shall achieve this when we fulfil the basic requirements of a future-ready infrastructure. We are transforming the country and modernising it at a very rapid pace.
India’s rate of growth after the Covid-19 pandemic is at 7.2 per cent, which is faster than other developed countries that are growing at approximately 1.5 per cent. Their rate of inflation is approximately 9 per cent, whereas ours is at about 5-6 per cent. This has been possible because we planned for it and one of the major parts of that plan was investments in modernising infrastructure.
The budgetary allocation for capital expenditure has increased five times from 2014 onwards, and has tripled in the past four years. In 2020, the capex stood at Rs 3.4 trillion, which was then increased to Rs 5.5 trillion in 2021-22, Rs 7.5 trillion in 2022-23 and Rs 10 trillion in 2023-24.
“We have become one of the fastest countries in transitioning to nonfossil fuels.”
In the power sector, thousands of villages and hamlets that did not have access to electricity have now been electrified. On August 15, 2015, we were given the target of electrifying every village in thousand days. This was achieved in 987 days – 13 days ahead of the target date. We connected 28.6 million homes in 19 months, which the International Energy Agency called the largest and the fastest expansion of access in the history of the power sector.
We have added 190,285 MW of generation capacity since 2014, transforming India from a power-deficit country to a power-surplus one. Today, our established capacity stands at 421,901 MW, which is close to double the peak demand of 223,000 MW. Since we are undergoing a renewable energy transition, the bulk of our capacity additions will be towards renewable energy.
Starting with a focus on the conventional sector, we have added a significant amount of capacity because we connected the whole country into one grid, operating on one frequency. This is the largest single unified grid in the world, and it is fully integrated and can transfer approximately 120,000 MW from one corner of the country to another. We have transformed the country into one power market, the power exchanges being one of its components.
“We will emerge as one of the bigger manufacturers of green hydrogen and green ammonia. Our green hydrogen and green ammonia will be the cheapest in the world because of the natural advantages we possess.”
We have strengthened the distribution system by investing Rs 2,017.22 billion under the Deendayal Upadhyay Gram Jyoti Yojana, the Integrated Power Development Scheme and the SAUBHAGYA scheme, among others, for constructing approximately 4,000 new substations and upgrading about 3,000 substations.
Alongside, we have added 75 million transformers, each serving three to four villages. Since 2014, we have added 182,801 ckt km of transmission lines, connecting the whole country into one integrated grid running on one frequency. The net result of this is that the availability of power in rural areas has increased from 12.5 hours per day to approximately 20.5 hours, while in urban areas, it has gone up to 23.5 hours.
Transmission lines in India deploy some of the most cutting-edge technologies in the world, such as the 800 kV HVDC, and span some of the most challenging terrain in the world. When we apply for transmission connectivity, it is approved in 60 days, a process that typically takes two to three years in other countries. However, there are issues in certain areas of transmission that need to be addressed.
We have put in place rules, laying down the rights of consumers. We have a grievance redressal mechanism at the divisional, superior and chief engineer levels to address grievances in case discoms carry out any unplanned load shedding. This is necessary because we have sufficient capacity, and we are duty-bound to provide stable power supply, which means no one has the right to do load shedding.
“We have added 190,285 MW of generation capacity since 2014, transforming India from a power-deficit country to a power-surplus one.”
In renewable energy, we have changed our stance to become one of the fastest countries in transitioning to non-fossil fuels. During the COP21 meet in Paris in 2015, we had pledged to have 40 per cent of our capacity generated from non-fossil fuels by 2030, which we were able to achieve in 2021. Currently, it stands at 43 per cent.
About 25-27 per cent of the electricity we consume comes from non-fossil fuels. Our non-fossil fuel capacity stands at approximately 185,000 MW, with an additional 88,000 MW under installation and about 55,000 MW under construction. The share of renewable energy in the electricity mix has increased from 6.4 per cent to 12.5 per cent over the past nine years. In the past year, 85 per cent of all capacity addition has been in renewables.
Foreign direct investment in the renewable sector has increased to $11.1 billion, which is 3.7 times the $3 billion received in 2014. Since 2014, the solar capacity added is 23 times the capacity installed prior to that, which now stands at 64.3 GW. The solar tariff has reduced from over Rs 6 per unit in 2014 to less than Rs 2 per unit (Rs 1.99 per unit) in 2020-21. Loan disbursements by the Indian Renewable Energy Development Agency for renewable energy projects have increased by about six times, from Rs 143,200 million as of March 31, 2014 to Rs 827,770 million over the past nine years.
Supply chain disruptions are important issues that require immediate attention as they need to be diversified, especially in light of critical minerals availability. Thus, solar module manufacturing capacity has increased ten times, growing from 2.4 GW per annum in 2014 to 25 GW per annum in 2023. Additionally, indigenous solar cell manufacturing capacity of 6 GW per annum has been installed in the country over the past nine years. Wind turbine manufacturing capacity has increased by 1.5 times, rising from 10 GW per annum in 2014 to 15 GW per annum in 2023.
We will emerge as one of the bigger manufacturers of green hydrogen and green ammonia. Our green hydrogen and green ammonia will be the cheapest in the world because of the natural advantages we possess. As a result, several countries have put up trade barriers against it. We have fought against these measures, and it has proven to be fruitful as some countries have lowered their trade barriers, while others have yet to do so.
Our cost of producing renewable energy is the cheapest in the world. We have placed a strong emphasis on increasing the volume of electrolyser manufacturing. The International Solar Alliance successfully launched the Green Hydrogen Innovation Centre. Further, technologies such as carbon capture utilisation and storage need to be accelerated and shared.
In Glasgow, India promised to reduce its carbon emissions intensity by 45 per cent by 2030, which is anticipated to be achieved before the stipulated time. Today, India’s per capita emissions are one-third that of the global average, which is one of the lowest in the world. The nation will not compromise on ensuring energy availability for our growth.
Notably, the country is responsible for only 4 per cent of the legacy carbon dioxide load in the environment, whereas our population accounts for around 17 per cent of the world’s population.