2016-06-30 / HFE
For renewable energy to thrive, we need to think big
Renewable at the fore
Renewable energy is serious business and a gradual transformation to green energy is non-negotiable in order to avert an environmental catastrophe. World over, more and more people are accepting and adopting green energy alternatives into their daily routine. This has been ably supported by government agencies. Even though the levelized cost of generating clean energy is high as compared to conventional methods, the marginal cost of producing output through solar and wind is almost zero.
Germany, the undisputed leader
Today, several countries are proactively embracing the opportunity to switch to greener alternatives. Germany offers a great example in this context, replacing fossil fuels with wind and solar energy. Deriving around 27% of its power from renewables, the country has found significant support from public for its energiewende initiative – an aggressive transition with a goal to produce 80% of electricity from clean sources by 2050. Encouraging a culture to promote the growth of renewables, a collective desire to abandon nuclear power plants and regulations permitting citizens to profit from selling their energy to the grid are all efforts in creating the right ecosystem. Preferential access to renewables has resulted in wholesale power prices to slump.
China – the manufacturing hub for renewables
Not far away, China – the world’s workshop for wind and solar, invested $110.5 bn in clean energy in 2015, making it highest among all the countries, according to a study by Bloomberg New Energy Finance (BNEF). Among other factors, the government’s commitment to replace heavily polluting thermal power plants and a reduction in its feed-in tariff policy for onshore wind farms, contributed significantly to this tall order.
Progressive reforms in Japan & the USA
Likewise, Japan has also recently amended its feed in tariff (FIT) policy under Act on Special Measures for Renewable Energy, to expedite and promote the use of solar on a wider scale. The revised regulations come into force post April 2017, include a new certification system and a new tendering program for PV projects, making tariffs more competitive. An ambitious 80 GW of PV capacity has been approved, out of which 34 GW is already constructed. Industry veterans are optimistic about the future of solar in Japan and are hopeful that it will cross 100 GW by 2030.
In the US, California has passed a landmark climate bill SB 350, to implement clean energy on a larger scale over the next 15 years. The bill aims to build energy efficiency in the state by 50% by 2030.
India, fastly catching up
India’s leadership in establishing the International Solar Alliance (ISA) which was launched at the UN Climate Change Conference in Paris (COP 21), is a part of the government’s big bet on solar. The aim of the ISA is “to address the specific needs of the solar resource rich countries located between the Tropic of Cancer and the Tropic of Capricorn.”
The government’s commitment to the growth of renewable and its efforts have fructified, by attracting an 80% rise in solar power financing that now stands at $5.6 billion. India’s target of 175 GW of renewable energy generation by 2022, got off to a good start with nearly 12 GW likely to be installed by 2017. At the beginning of this year, the government asserted sanctioning of 30% capital subsidy for rooftop solar installations to residential, government, social and institutional segments, which is expected to support total rooftop capacity of 4,200 MW till this budget is exhausted.
The push for decentralized renewable solutions like mini grid, in additional to solar, is expected to generate 500 MW of power to supply energy to the farthest corner. However, the ultimate success of India’s big bet on solar will require focus on research, affordable project financing, and viable solar projects that will pass on the benefit to end consumers.
As we stand today, both solar and wind integration into the grid faces resistance from grid operators. However as our economy grows , grid size increases and new technologies related to scheduling and forecasting are in place, integration issues are likely to be resolved. Initiatives by the current ministry, like green corridor and emphasizing on improving the overall infrastructure is likely to smoothen the last tumbling block.
Energy surplus – not a figment anymore
Very recently, Germany experienced a phenomenon of energy surplus, wherein the output actually exceeded the national demand. This was possible due to higher contribution from renewable energy generating facilities. Similar feat was observed in Denmark last year.
As they say, the journey of a thousand miles begins with a single step. It’s early days yet for the renewable energy sector, but with the necessary action plans in place, can India become an energy surplus nation in near future, emulating on the lines of Germany?
Contributed by Rahul Munjal, Founder and Managing Director, Hero Future Energies