Future of Power Generation: Decentralised Renewable Energy

India is home to the second-largest population in the world and is one of the fastest-growing economies. Hence, according to BP’s (The British Petroleum Company plc) Statistical Review of World Energy, India’s primary energy consumption hit 809.2 million tons of oil equivalent in 2018. On this metric, the country is behind only China and the U.S. when it comes to renewables. The Government of India is targeting an ambitious goal of 175 gigawatts (GW) of renewable energy capacity by 2022 and aiming for 450 GW by 2030. Coming to renewable energy systems, over the past few years decentralized renewable energy has gained traction.

Decentralized refers to any system that uses renewable energy to generate, store, and distribute power in a localized way. It includes small devices such as biomass cooking stoves, solar lanterns, integrated solar home systems (SHS) that power multiple devices or appliances for a single household, and smaller generation and storage resources that feed isolated or localized distribution networks. 

Decentralized renewable energy (DRE) solutions are well-established in meeting small-scale rural energy needs in an affordable, reliable, and carbon-neutral manner. These types of transitions offer substantial support to address energy poverty that acts as a tool in uplifting economic prosperity, human well-being, and environmental conservation envisioned under the Sustainable Development Goals (SDGs).

Fossil fuels and funding renewable energy

According to a report, it has been found that from INR 15,740 crore in 2017, the total subsidy for renewable energy in India fell by nearly 45% to INR 8,577 crore in 2020. The study found that support for fossil fuels has increased, hitting INR 70,578 crore in 2020. Without substantial support, implementation of renewable energy can be challenging. Therefore, there is a need to reform fossil fuel subsidies that can generate valuable additional resources for economic recovery from COVID-19 and investments in clean energy.

There is a need to redirect a share of coal tax revenues to clean energy and support communities, regions, and livelihoods impacted by the transition from fossil fuels to renewable energy and help ensure a just and equitable energy transition. For example, The Government of India should encourage public sector undertakings, which are currently investing more in fossil fuels, to set ambitious targets for high levels of investment in clean energy.

Applications of Decentralized Renewable Energy (DRE)

New and innovative technologies are created to surpass the conventional uses of electricity. These are not just limited to lighting but to create livelihoods. DRE-powered ecosystems unlock socio-economic co-benefits by impacting sectors such as healthcare, education, livelihoods, irrigation, etc.

Education: The quality of education depends upon the availability of basic infrastructure such as classrooms, water and sanitation facilities, electricity, and digital learning tools – all of which need reliable electricity to function effectively. There is a great divide between schools in rural areas and schools in urban areas. For example, schools in rural areas often use inefficient modes of cooking to prepare mid-day meals. This pollutes the premises and affects the health of everyone around. Implementation of DRE in schools can generate interest of the students to learn about renewable energy.

Livelihoods: India is majorly an agrarian economy, yet farmers and the rural population remain poor and underserved. The power consumption by the agriculture sector in India is close to 18%, whereas its contribution to the GDP stands at 20%. Even after subsidized electricity, these discrepancies remain. Instead of alleviating the issue of lack of energy access, low tariffs and free electricity have increased the financial stress of the discoms. This was amplified even more by the transmission and distribution (T&D) losses added with electricity theft. Therefore, there is a dire need for support to a decentralized form of energy generation for electrification, processing units, storage, and irrigation to address the current as well as growing agricultural needs. An integrated approach and implementation of all renewable energy sources can transform rural activities, ensure enhanced income generation, promote growth, and help discoms to improve their efficiency.

Interventions needed for strategic growth

With renewable energy power now cheaper than conventional power, it has become attractive for discoms. At the same time, many industrial and commercial establishments also find renewable energy power, especially solar, cheaper than the cost of sourcing power from the discoms. Aggressive targets and push from governments have resulted in a significant increase in RE capacity in the country. In recent years, the government has started awarding large projects through reverse auctions. This has resulted in global investors setting up large projects at very low tariffs that enhanced competition in the market. However, there are few steps that can be taken at the earliest.

The regulatory measures by GOI can focus on sustained integration of DRE plants into conventional infrastructure, DRE grid standards, and community-based ownership models of decentralized generation. Simultaneously, India can work on indigenous manufacturing and vertical integration of RE equipment, providing cost-reduction benefits to the project developers. Given the potential of distributed renewable energy, and with draft NEP 2021 endorsing RE, the time is ripe to bring in DRE technologies for supporting the decade-end goals.



The views expressed in this article are the author's own.

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