Renewable Energy – Wind, Tidal, Geothermal, etc.

Renewable power, when it isn’t sunny or windy


From UPSC perspective, the following things are important :

Prelims level : Merchant Sales

Mains level : India's ambitious renewable energy targets and the challenges associated with intermittency and peak demand

India pledges new climate crisis goal: Net zero by 2070 | Latest News India - Hindustan Times


Central Idea:

India aims to achieve its goal of becoming greenhouse gas (GHG) neutral by 2070 through the addition of renewable energy (RE) capacity by 2030. However, to address the challenges of intermittency and peak demand, there is a need for robust storage capacities, deeper power exchanges, and innovative bidding processes.


Key Highlights:

  • India targets RE capacity by 2030 to achieve GHG neutrality by 2070.
  • The country has made significant progress with solar and wind energy added.
  • Long-term power purchase agreements (PPAs) with state discoms have facilitated RE growth.
  • Favorable policies and reduction in capital costs have spurred competition and foreign investment.
  • Peak power deficits are growing, necessitating innovative solutions to match demand patterns.
  • Bids for renewable projects now require hourly demand matching, akin to traditional power sources.
  • Storage solutions, such as pumped hydro and battery storage, are crucial for grid stability.
  • Excess power generated can be sold to commercial consumers or on power exchanges.


Key Challenges:

  • Meeting peak demand and demand patterns poses a challenge for intermittent renewable sources.
  • Reluctance of discoms to accept must-run renewable energy hampers adoption.
  • Capital costs of storage solutions, like battery storage, remain relatively high.
  • Lack of vibrant power exchange markets limits opportunities for excess power sales.
  • High merchant sales may impact project bankability, requiring guaranteed floor prices.


Main Terms:

  • GHG Neutrality: Achieving a balance between emitted greenhouse gases and those removed from the atmosphere.
  • Power Purchase Agreements (PPAs): Contracts between electricity generators and buyers, often discoms, for the sale of electricity.
  • Renewable Purchase Obligations: Mandates requiring power utilities to purchase a certain percentage of their electricity from renewable sources.
  • Firm and Dispatchable Renewable Energy (FDRE): Renewable energy sources capable of meeting demand fluctuations, akin to traditional power sources.
  • Levelized Cost of Energy (LCOE): The average cost of generating electricity from a particular source over its lifetime.


Important Phrases:

  • Must-Run Status: Requirement for uninterrupted operation of renewable energy projects, except for safety reasons.
  • Intermittencies: Variations in energy production from renewable sources due to weather conditions.
  • Peak Deficits: Shortages in electricity supply during periods of highest demand.
  • Round-the-Clock Demand: Consistent electricity supply matching consumer demand throughout the day.
  • Merchant Sales: Selling excess electricity generated beyond contractual obligations on the open market.


Useful Statements:

  • “Storage capacities are central to maintaining grid stability as we expand renewable energy capacities.”
  • “Innovative bidding processes now require renewable generators to match demand patterns akin to traditional power sources.”
  • “Reluctance of discoms to accept must-run renewable energy hampers India’s renewable energy goals.”


Facts and Data:

  • India aims to add renewable energy capacity by 2030.
  • Peak demand is expected to grow in the coming years.
  • India’s power exchanges have witnessed increased trading activity but still lag behind developed economies.
  • Battery storage costs are currently estimated, compared to for pumped hydro.


Critical Analysis:

The article underscores India’s ambitious renewable energy targets and the challenges associated with intermittency and peak demand. It highlights the importance of storage solutions and innovative bidding processes in ensuring the viability of renewable energy projects. However, challenges such as the reluctance of discoms and high capital costs of storage solutions need to be addressed to accelerate India’s transition to a greener energy landscape.


Way Forward:

  • Implement policies to incentivize discoms to accept must-run renewable energy.
  • Invest in research and development to reduce the capital costs of storage solutions.
  • Enhance power exchange markets to facilitate the sale of excess renewable energy.
  • Provide guaranteed floor prices for excess power sales to improve project bankability.
  • Continue to innovate bidding processes to better match renewable energy supply with demand patterns.

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