India is blessed with huge potentials of solar as well as wind (onshore and offshore) energies, then down the line in next (say) five years what should be the ideal power mix for us?
This is true that India has very high potential of solar as well as wind for converting into energy. Our country receives solar radiation of 5 to 7 kWh/m2 for 300 to 330 days in a year, power generation potential using solar PV technology is estimated to be around 20MW/sq. km and using solar thermal generation is estimated to be around 35MW/sq. km.
The Indian energy sector has lately witnessed a rapid growth in an effort to meet the demands of a developing nation. However, continued use of fossil fuels is set to face multiple challenges like depletion of fossil fuel reserves, global warming and other environmental concerns, geopolitical and military conflicts and of late, continued and significant increase in fuel price. Renewable energy source like solar and wind are the solutions to the growing energy challenges as they are abundant, inexhaustible and environment friendly.
If you look at considering all the aspects, solar Energy in India is one of the most exciting and thriving industries in the world right now. Main reason is that source’s unique confluence of favourable Supply and Demand factors. On cost fronts, we have also optimized the fabrication of modules that have been declining rapidly in recent years and is near to achieve grid parity.
India is now trying to expand its green energy portfolio by harnessing the entirely unexploited offshore wind energy potential along its 7,600 kms coastline. The focus on offshore has increased in recent years partly due to its global rise and partly due to the ongoing lull in the onshore wind energy segment.
Offshore wind energy has multiple benefits over onshore. “The biggest advantage of offshore observed worldwide is that the generation profile is much flatter compared to onshore farm.
As far the as wind energy is concerned, the basic framework for offshore project development in India is provided by the National Offshore Wind Policy 2015. So far, sites have been running many wind projects near coasts of Gujarat and Tamil Nadu through a programme called Facilitating Offshore Wind in India (FOWIND). The FOWIND project came up with eight potential zones in the two states that are most suitable for offshore wind development.
India is also planning to install five more LiDAR (Light Detection and Ranging) systems, including two in Gujarat and three in Tamil Nadu soon.
In terms of way forward to India efforts on development of on and offshore projects, it is evidenced from the LiDAR data collected in Gujarat, generation from installations will be more evenly distributed across the year, while 60 per cent of the generation from onshore projects tends to be concentrated in three to four months. Despite suitable conditions, the pace of development has been slow and the 5 GW target is out of reach given project gestation is 6-7 years. While the government is busy preparing the tenders, supply chain issues have been left unaddressed.
In this case of wind, again cost has become another parameter to challenge. The capital cost of offshore wind projects is roughly five-seven times higher than onshore projects. While turbines account for 60-80 per cent of the capital cost of an onshore project, they are only 30-50 per cent of the cost in case of an offshore project. Instead, the share of grid connection costs is higher at 15-30 per cent in case of offshore wind due to the requirement of laying sub-sea cables.
However, even though offshore wind capacity development is more expensive, the economics can work out if VGF is provided along with tax breaks and technology benefits. Further cost reductions will need to be achieved through turbine designs customised for low-wind conditions, low labour cost as well as tax waivers.
At present, tax burden on the industry is estimated to be 30-31 per cent. Developers have been requesting the government to waive off the custom duties and impose only the 5 per cent goods and services tax (GST), in line with the concessions being provided to oil and gas industry. This is crucial considering that most of the projects are, at present, dependent on foreign technology.
Based on the above, it can be said that optimal energy mix make the energy sector transition a powerful driver for the government’s reform plans to increase the robustness and sustainability of power supplies while expanding affordable energy access. These goals are behind the government’s “24×7 Power for All” initiative to provide access to 245 million people without power by 2019.
This has been possible with the downward trend of cost of solar panels and newer technology options like battery energy storage systems. In fact, the reduction in cost projections is very aggressive for battery energy storage technology so as to render them financially viable.
To achieve the mix, a horizon of 10-12 years is sufficient to gear up the systems and policies in the right direction. We must keep focus on today’s energy mix and plan for optimal generation capacity mix which is primarily aimed at finding out the least cost optimal generation capacity mix, further which may also be required to meet the peak electricity demand and electrical energy requirement of the next few decades. In this context, planning for optimal generation capacity mix for India gains tremendous importance so as the future generation capacity mix will be cost effective as well as environmental friendly.
Can we manufacture better solar arrays at a cheaper rate than that Chinese manufacturers offer?
This is fact that Indian solar companies have been highly dependent on China in terms of importing components. Modules account for nearly 60% of a solar power project’s total cost. It was estimated that over 80 per cent of solar cells and modules are imported from that country because of its competitive pricing compared to domestic manufactures.
Many sources reported that India’s solar industry is largely dependent on procurement of raw materials from China. The same is not the case for wind equipment but for solar about 85 per cent of cells and modules are still imported, mostly from China. “India’s current domestic manufacturing capacity stands at around 11 GW for panels and 3GW for cells, although some capacity remains unutilised due to price and quality concerns. Since the world in entirety and India specifically is looking at diversification of trade markets, this is an opportunity to dramatically improve our capabilities in domestic manufacturing of solar equipment.
On this front, India is also looking to play a larger role in global energy supply chains in the backdrop of the disruption caused by the pandemic and with the Self –reliance progarmme, India currently has considered in scaling up a domestic manufacturing capacity beyond 3 GW for solar cells and recently awarded a manufacturing-linked solar contract that will help in establishing additional solar cell and module manufacturing capacity. Here, clean energy projects now account for more than a fifth of India’s installed power generation capacity, with the country becoming one of the top renewable energy producers globally with ambitious capacity expansion plans. In this context, China remains India’s second largest trading partner after the US. India’s exports to China rose 3.8% to $17.1 billion in 2019 while imports contracted 7.5% to $68.3 billion during the same year.
We must, however, keep in mind that near-term development and execution of Renewable Energy (RE) projects is not hampered with our plant set under self –reliance manufacturing. A dedicated strategy the need of the hour and to scale up local manufacturing, Indian manufacturing industry look forward to put in place a long-term policy, coupled with infrastructure and the right incentives to support the same. Another factor of investment into R&D, which is imperative, and policy makers and top thinker need to think about complete vertical integration if we want to attempt self-sufficiency in solar equipment manufacturing. It is not enough to just set up units to make cells, modules or wafers. It should also need to gear up production of ancillaries including inverters, glass, back sheets etc.
Besides boosting domestic manufacturing, our country should also need to take a forward-looking approach to the manufacturing of equipments for renewable. No doubt battery technology is all set to be a gamechanger, as it addresses the intermittency of renewables and can transform electric mobility. Many initiative of Energy Effcieincy Services Limited (EESL) are praise worthy. We believe that this segment will become critical for the growth of RE in the coming years.
Are we (as a country) self-sufficient to design and produce all power electronics products to store, integrate and control mainly the renewable energies (with variable generation outputs)?
My answer is yes, we are.
However, that said in the solar segment though a few companies in India are doing local manufacturing they have not been able to keep up with the paramount quality one gets from trade from other part of the world. It is sometimes at a cheaper rate than what the vendors here in India provide. On this front, quality in manufacturing needs to occupy the central point of attention.
Besides solar, even the lithium batteries for Electric Vehicles (EVs) are sourced from outside India due to the non-availability of Lithium in India. Hence, many manufacturers feel that it would not be appropriate to boycott trade relations with other countries. Other than electronics parts in the EV industry, Indian electronic industry is mainly depending upon for Lithium-based batteries for EVs.
As a massive and game changer initiative, India has taken step to become self-sufficient to design and produce all power electronics products to store, integrate and control mainly the renewable energies. Here, one of our main products, EV battery-swapping stations for two and three-wheelers is going to be set up in different parts of the country. It will use four different type Lithium-based batteries out of which two are sourced from other world by our battery partners. A disruption will directly impact our end-user choice and price parity. In the meantime, we are also working in alternative electronics equipments and battery technologies to minimize the dependency on any other country.
Are we still dependent on the import of passive electronic components that increase the cost of our power electronic devices?
Let’s understand perspectives of electronics that include passive, active, electro-mechanical and associated components.
Passive electronic components are components that consume energy and do not produce energy. A typical example of passive electronic components would be resistors and capacitors, they are not active components like diodes, transistors, ICs and LEDs. Note that, the current growth drivers of Indian electronics market for domestic manufacturing are LED lighting, automotive electronics, energy meters, solar energy, mobile phones and IT products such as tablets. Local mobile phone makers are also expected to drive demand for their components.
When it comes to energy sector, the electronics industry is going through an exciting phase. Demand for electronic products is on the rise, electronics is playing a major role in energy sector, and innovations are happening with increased efficiency and frequency. With the new setting of vision of self –reliance India program, Manufacturers of electronic products need to focus on continuous improvement in order to stay ahead of the pack.
A few tech trends that will impact the electronic components industry are convergence of technologies that allows a single device to use multiple technologies and provide varied services, followed by miniaturisation which is expected to increase and will impact the traditional components market, as most of these components will be replaced by chip components and integrated circuits. Artificial intelligence is another one, which has moved beyond consumer products and is also available in several industrial electronic products and lastly going green where manufacturers will need to shift focus from discrete components to integrated components in order to benefit from the changing tech landscape in the country.
One should note in the mid that upon massive move to self-reliance India program, the Indian Electronic Systems Design and Manufacturing (ESDM) industry is on its way to achieving its full potential in terms of both production and design capabilities. India’s domestic electronics production had exceeded imports in last couple of years. This indicates that the ‘Make in India’ initiative is beginning to have a positive impact on domestic manufacturing. Favourable business policies for the domestic electronics sector have undoubtedly played their part, particularly in facilitating the setting up of manufacturing facilities for smart phones, set-top boxes, televisions and other appliances. This presents an opportunity to the electronic components manufacturing industry of the country. Over the next five years, accelerated local manufacturing of electronic products to cater to growing domestic demand will drive the market for electronic components in India.
However, this will only be possible if the Indian electronic components industry can transform itself into the best-in-class manufacturing hub as few of issues related to passive components are high capital costs, inefficient supply chain for raw materials, non-availability of advanced manufacturing equipment, logistics inefficiencies and infrastructural bottlenecks and lack of skilled labour, need focused approach.
What is your take on India’s initiative to produce big indigenous energy storage facilities and components required for that?
India has a great ability to get into sunset industries rather than sunrise industries and the future belongs to only two things and the country needs to put its entire scientific community behind two aspects storage and batteries. Without storage and batteries India has no future.
Secondly, the future lies in electric mobility. This is going to happen worldwide and if India is able to take the lead in these two things it will take lead globally. In every other sector, we have got in too late in the game but in these two sectors we are exactly where the world is. People may say whatever but we are exactly where the world is. If we are able to make technological breakthroughs in the areas of storage and batteries, if we can make a massive break-through in electric mobility, India will leap-frog the world.
Just think of Renewable Energy, India’s biggest asset, is its sun and its renewable energy but this renewable energy cannot be tapped fully without storage and without a huge and massive break-through in our ability to link it with transmission and distribution and make massive improvements.
In my views, it is a major push in EVs across India will naturally help to spur the stationary storage industry given the synchronicities across lithium-ion batteries at present and the likely reduction in battery costs for both sectors as a result.
Recently, Solar Energy Corporation of India (SECI) has now released two major tenders including 1.2GW of solar PV combined with 3,600MWh of energy storage connected to the national grid.
The country needs energy transformation and we need to look at four objectives access to energy at rational prices, improved security and independence, greater sustainability and economic growth. We need to completely re-frame our oil policy to look at this. If we need to clean up India and provide better life for our citizens, we need to focus on these areas.
With appropriate policy support through this mission, Indian companies will be able to diversify into energy storage business. I also have opinion that through Make In India initiative, India will able to compete with the countries like China, Australia, Germany, USA, Taiwan, South Korea other Li-Ion manufacturing countries. In my views, such focused program will not only boost production, improve air quality in cities along with reducing India’s oil import dependence, enhance the uptake of renewable energy and storage solutions but also expand dimensions of products across the entire Energy storage value chain.