Renewables penetration in Indian electricity grid
The recent report released by Niti Aayog highlights the CAGR (Compound Annual Growth Rate) for various sources in India’s electricity grid over the last decade. While the typical CAGR of new capacity addition is of the order of 5%, renewables to about 20% of the total installed capacity with the CAGR of solar as 62% and wind power by 12 % over the last decade.
The GOI targets of 175 GW of solar and wind by 2022, and 500 GW by 2030 still remain uncertain. The challenges are:
- Regulatory uncertainty due to changing tax regimes, renegotiation of PPAs, cancellation of approved bids in search of better tariffs by the government procurement agencies, etc.
- Poor offtake credibility where final off-takers have six months payment delays are not able to maintain the LCs, are not able to sign the PSA with SECI, etc.
- Transmission congestion issues due to which the projects face curtailment and getting dent in the profitability. Grid stability is yet another challenge.
- Balancing power, and energy storage capacity addition will become a challenge as we move forward. Government’s initiatives are at slow pace to add grid flexibility in the electricity grid.