Indian solar sector booming, but now comes the real test
Lack of an efficient and reliable T&D infrastructure that can handle the kind of solar power being injected into the grid poses a major challenge in the way of realising the country's solar potential
The power sector is growing like never before to cater to the ever- increasing needs of a rapidly developing economy, and it is solar energy which has emerged as a pacesetter. Registering a phenomenal 32-fold growth in generation in just six years, the Indian solar industry has really risen to the occasion. In fact, it is poised to grow by leaps and bounds the way so many developers are lining up one mega solar power project after another. Up against a tough target of 100 GW by 2022, India's installed solar capacity is 16 GW now. The impressive growth notwithstanding, challenges remain.
One of the biggest hurdles in the way of realising India's solar potential is lack of an efficient and reliable transmission and distribution (T&D) infrastructure that can handle the kind of solar power being injected into the grid. Solar in India would have everything going for it had the transmission system been growing in sync with the increase in generation. But the fact remains that our transmission lines have not been upgraded adequately to withstand this additional load of electricity. If ignored for long, this widening gap will put immense pressure on the existing transmission lines, which may even result in system collapse. The stakes in the solar sector are so high that we cannot afford to have any breakdowns. We have to be constantly at it by upgrading the grids and coming up with new ones to match the outflows created by new solar projects, just as Andhra Pradesh is doing. As and when the Andhra Pradesh government formulates a plan for a new solar project, it has a parallel plan on T&D going. Apart from encouraging private investment, we should rope in utilities and enable them to acquire the financial firepower to invest heavily in grid infrastructure and make large-scale green electricity purchases.
Upgrading transmission and distribution lines assumes utmost importance. The way the solar sector is growing, all states should take it upon themselves to upgrade their T&D system in accordance with the increase in installed capacity. If they fail to do so, they could find themselves in a difficult situation like Punjab. Cashing in on the solar overdrive, Punjab is poised to achieve an installed solar capacity of 1 GW soon. But the T&D network in the state has not been upgraded adequately to evacuate this additional electricity. Though the government has asked the Power Grid Corporation of India Ltd (PGCIL) to build separate transmission lines in the form of National Green Energy Corridors to evacuate renewable energy, the PGCIL is likely to put up only inter-state transmission lines, at least in the initial stages. States governments will be required to invest in capacities on their own.
Bogged down by grossly deficient transmission capacities, we lose millions of kilowatt hours of electricity to inter-state transmission congestion. High T&D losses can make solar power a highly unfavourable proposition. Though the government, in association with the National Thermal Power Corporation (NTPC) and the PGCIL, is doing its bit to upgrade its substations and T&D lines to reduce T&D losses, the efforts need to be redoubled. We cannot afford to operate with this redundant network of transmission lines. We should gradually upgrade our grid ring system from 440 KV to 765 KV, and then to 1,200 KV, so that electricity can be optimally transferred to the central ring and suitably distributed among power-deficient areas of the country. The process of upgrade from 66 KV to 132, 220 and 440 KV should take place simultaneously. We must ensure that each unit we generate reaches its rightful destination. The entire exercise will prove to be a wasted effort if we are not able to upgrade our grid infrastructure in consonance with the growth in solar generation capacity.
When it comes to providing grid connectivity to solar projects, the rooftop segment, which accounts for 40 GW of the 100-GW target for 2022, presents no problem as rooftop solar power is distributed smoothly in a well-defined network. It is the 60-GW ground-mounted solar projects which pose a major challenge as these projects will eventually be connected to the grid. When we talk of grid connectivity for solar projects, the one thing that we find lacking is consistency of flow. Be it thermal, nuclear or hydel power, there is a certain consistency of electricity flow round the clock. In power plants using conventional sources of energy, the flow of electricity, design and T&D network are all planned as per the estimated outflows from these plants. Thermal power plants can easily burn more or less coal to generate power as per the demand. But this is not the case with solar. While the T&D infrastructure for solar power is designed to withstand peak loads, the inconsistency in flow at different times of the day leaves the potential grossly underutilised and makes power systems prone to breakdowns and volatile fluctuations. This may be a bigger issue for larger solar projects, potentially leading to problems during peak usage periods.
Solar energy is intermittent. It cannot provide the same amount of power throughout the day. While solar power generation can falter on a cloudy day, we can, on the contrary, have more solar electricity on a bright and sunny day than is actually needed. This disparity in the flow of power poses one of the biggest challenges and calls for massive upgrades or even redesign of the grid infrastructure. Since solar energy cannot be stored at this point of time, how we manage the power generated at a specific point presents an equally stiff challenge. Maintaining grid stability can become a major challenge when a large amount of intermittent solar power is injected into the grid. This problem can, however, be overcome with modern technological breakthroughs and advancements like smart grids and solar energy storage solutions.
But the situation can become even more challenging when the share of renewable energy in total power generation goes up in due course of time, and yet the constant flow of electricity is lacking. While 10% is a challenge, it is still manageable. Beyond that, the task is increasingly difficult. Since many large solar facilities are in remote locations such as
deserts where grid infrastructure doesn't exist, we need to find a viable way to connect to and store solar energy, as and when needed.
Lack of storage poses one of the biggest challenges in the solar sector. We will have to create batteries so that whatever power is generated can be stored and distributed 24x7 as per the requirement. There has to be consistency in the flow of power to the grid to keep volatile fluctuations to a manageable extent. With the integration of storage facilities, we will also be able to use solar energy at night and regulate its supply during the day. The US and some European countries are working on solar batteries to address the problem of storage. We may have a solution in a couple of years with research going on at a furious pace in these countries.
Containing costs through R&D is another formidable challenge. Costs will go down if indigenous R&D is encouraged. But India lacks in R&D. It has a long way to go. Let's pump enough money into R&D and create a mindset for research. Why can't India develop its own technologies and export them to build foreign reserve rather than depending on imports and foreign capital? Collaborative and outcome-based R&D can make India a world leader in PV technologies, but we also need closer industry-government collaboration for these technologies to achieve scale.
One more area that we need to work on is reducing the costs of modules and inverters, and enhancing their efficiency. As the costs of modules and invertors are going down, so are the bidding prices. Though production costs have declined on account of cheaper capital, technological innovations and falling prices of equipment, inefficiency continues to be a major hurdle before the solar industry. While the best panels in the market convert at the most 35% of sunlight into energy, most modules have an efficiency rate of just 15%. Many companies are working on more and more compact modules and inverters to make them more efficient.
Solar developers also need to guard against the tendency of depending too much on grants, especially if they are looking at commercially viable ventures. Though the solar industry is supported by government incentives like lower duties, tax concessions and guaranteed purchases by state utilities, these concessions can be withdrawn as and when the government's financial considerations get the better of its commitment to clean and green energy. Facing severe fiscal deficit, the central government may not stick to its obligation to fund mega-projects, leaving cash-starved state governments in no position to buy power from either the Centre or private developers. To counter this situation, solar developers should do everything to make their businesses commercially sustainable without depending overly on grants.
State utilities, too, should take responsibility and rise to the occasion. The surge in production of solar power should be matched with large-scale guaranteed purchases from state utilities despite the drain this costlier source of energy puts on their finances. In the long term, the answer lies in transforming state utilities into financially robust profit- making enterprises through power reforms. On a positive note, the gap in the cost of conventional and renewable energy is gradually narrowing down, thanks to technological breakthroughs and economies of scale.
Last but not the least, fast-paced advancements pose another big challenge. Every two- three years we have a new technology, which makes the old one obsolete. This is what big developers are doing to stay ahead of competition. Blessed with abundant sunshine and vast tracts of non-cultivable land to run solar projects, India—given the conducive business environment and favourable government policies—can virtually become a global solar superpower if it takes these challenges head on.