India Encourages the Evolution in Solar Power Infrastructure: Ken Research
Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of a country
The dropping costs for solar and wind energy and high enthusiasm for hydropower has increased the renewable energy generating capacity and is also expected to increase by the year 2030. With the improvement in battery technology that would enable weather and time dependent solar and wind power to serve as round-the-clock power sources will help reduce coal use in the power generation sector in India. The battery price has already fallen and was estimated to reduce further. This trend will encourage the solar power with battery storage that will be cheaper than coal-fired power. India’s installed power plants capacity and power generation are using various fuel types such as thermal conventional, nuclear, large solar thermal and renewable energy sources. The renewable power sources are wind(both onshore and offshore), solar photovoltaic (PV), concentrated solar power(CSP), small hydro power(SHP), biomass, biogas and geothermal. The renewable power market includes hydro, small hydro, biopower and solar thermal energy resources.
The leading players in the solar thermal power in India are Reliance Power Limited, Megha Engineering and Infrastructure, KVK Energy & Infrastructure and LANCO Infratech. The latest solar electricity price per unit was reduced compared to the recent years and the Indian government has raised its solar capacity target to 100GW by the year 2030. According to the study “Solar Thermal Power in India, Market Outlook to 2030, and Update 2017-Capacity, Generation, Power Plants, Regulations and Company Profiles”, in India around 65GW of new thermal power plants are already in the pipeline along with new solar plants. This scenario threatens a rise in power surplus at a time of moderate growth in this sector and will follow a collapse in plant load factor (PLF). Therefore, the collapse in PLF can bankrupt many projects burdening the lenders. Majority of the banks in India are already under enormous bad debts and the surplus power is a threat to the bank as well as the nation’s economy. Therefore, the solar power growth is a blessing, but can become a curse with much state of affairs.
Solar power generation is great while the sun shines and stops at sunset. The power consumption soars during evening. It was also observed that the thermal power remains idle during the day and is ready to pick up the slack when solar production suddenly stops. Such strained idleness evolves huge hidden costs while estimating the solar power generation initialization procedures. If the cost of the solar equipment is decreasing then it is true that the solar power has become cheaper than coal based power. Solar power generation is sporadic because the process is inevitable during night and on cloudy or foggy days. The Indian government is promoting solar energy through economic and promotional incentives like capital investment or interest subsidies, tax holidays on earnings for 10 years, generation based incentives, accelerated depreciation, viability gap funding, and financing rooftop solar as part of home loans.
India’s power sector is most diversified with sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. The demand for electricity has increased rapidly and is expected to rise further in the coming years. GE Energy Financial Services (GEEFS), Greenko Energy Holdings, Private equity (PE), Mahindra and Mahindra, Hero Future Energies, Tata Capital, CDC Group Plc, Japan’s JERA Co, International Finance Corporation (IFC) are few major investors in the development of the Indian power sector.
The power sector was identified by the government of India as a major key sector to focus and promote sustained industrial growth. Pradhan Mantri Sahaj Bijli Har Ghar Yojana, no clearance required for solar PV (photovoltaic) power, solar thermal power projects, and solar parks, Street Lighting National programme (SLNP), Power for All program, Development of Solar Parks and Ultra Mega Solar Power Projects are few initiatives by the government of India to boost the Indian power sector. Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of a country. The existence and development of adequate solar power infrastructure is essential for sustained growth of the Indian economy. India's solar power capacity is an addition to the already existing power sector creating immense opportunities in power generation, distribution, transmission, and equipment. The Indian government’s immediate goal is to generate two trillion units of energy in the near future which is doubling the current production capacity to provide continuous electricity for residential, industrial, commercial and agriculture use.