Transition from coal to Renewables

In Context

With inflation at unprecedented levels in many countries, concerns over energy security have gained centre stage.

Consumption pattern in India

• Coal is the most important and abundant fossil fuel in India. It accounts for 55% of the country’s energy needs.
  •  The country’s industrial heritage was built upon indigenous coal.

• The India Energy Outlook 2021 report of the International Energy Agency (IEA) said energy use in India has doubled since 2000, with 80% of demand still being met by coal, oil and solid biomass. 

• India has installed 162 GW (1 GW is a 1000 MW) of renewable energy capacity which is 41% of the 402 GW of electricity installed.
  • In 2015, India committed to ensuring that 40% of its energy would be from sources by 2030 as part of its  Nationally determined contributions (NDCs) .
• Recent Issues 

• Pandemic-related disruptions, however, prevented the stock-up of coal.
•  Mining operations were halted to curb the spread of the virus. 
  • It has resulted in a demand-supply mismatch. 
• The capacity of a plant does not necessarily translate into the actual power it generates for the grid, some of it is lost owing to external factors such as heat or transmission losses. 
  • This applies for both renewable and conventional sources.
• India’s national infrastructure has not been designed to account for so much variability in energy generation.

Benefits Transition from coal to renewables

• Low maintenance cost: As compared to the traditional sources of energy like coal-based or oil-based thermal power plants, solar energy has the advantage of almost no requirement of procurement of fuel as well as lesser wear and tear due to lack of movement of parts. 
  • Therefore, return on investment is higher in the long run.

• Sustainable : Solar energy is a sustainable source of energy.
  • Therefore, unlike thermal energy where the government policy is to penalise the usage, renewable energy will always be incentivised to invest additional resources and create more energy capacity.

• Benefiting the environment : Renewable energy is a cleaner source of pollution, thus, benefiting the environment in general and reducing pollution and the associated diseases in particular.
• Atmanirbhar Bharat: Investment by the private sector in renewable energy would also be helpful in fulfilling the Government’s objective of self-reliance. It will also create employment opportunities in the country.
• Economical 
  • This is also economical for the government and households as decentralised connectivity decreases the Transmission and distribution losses.

Hurdles 

•  Land acquisition is one of the major challenges in renewable power development. Identification of land with RE potential, its conversion (if needed), clearance from land ceiling act, decision on land lease rent, clearance from revenue department, and other such clearances take time.
• Technological Barriers: Renewable energy technologies are still evolving in terms of technological maturity and cost competitiveness, and face numerous market related, economic and social barriers.

Governments Policies in this direction 

• National Solar Mission (NSM)
  • In January 2010, the NSM was launched with the objective of establishing India as a global leader in solar energy, by creating the policy conditions for solar technology diffusion across the country
• Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)
  • An ambitious scheme for providing water and energy security to farmers and enhancing their income by making “Annadata also a Urjadata”.
• Solar Parks Scheme
  • Solar parks provide solar power developers with a plug and play model, by facilitating necessary infrastructure like land, power evacuation facilities, road connectivity, water facility etc. along with all statutory clearances.
• Green Energy Corridor (GEC)
  • It aims to facilitate renewable power evacuation and reshaping the grid for future requirements.
•  National coal index (NCI)
  • This index was created to provide a benchmark for revenue-sharing contracts being executed after the auctions for commercial mining of coal.
  • The NCI had to be introduced as the wholesale price index (WPI) for coal has no component of imported coal. 
    • For the last six months, the WPI for Coal has been stable at around 131.
• Other schemes: Various National Schemes like National Action Plan on Climate Change, National Clean Air Programme (NCAP), National Biofuel Policy, etc.

What more needs to be done to make these measures more effective?

• The energy transition will be long and expensive. The fossil fuel-based economic system will have to be redesigned and, in parts, rebuilt for clean energy to achieve scale. 
  • The process will take decades and require massive capital infusion. 
• The financial community has to be sensitised to the need of increasing domestic coal production to meet the growing energy demand. 
•  There is a need to strengthen the steps to promote domestic manufacturing in the Renewable Energy sector (Atma Nirbhar Bharat Policy). 
  • Procurement and use of domestically manufactured solar PV cells and modules have to be mandated for all entities.
•  A single point executive should be appointed to align the interests of the multiple stakeholders (governments, regulators, farmers ) involved in this process and to develop common rules and standards. 

• Transition to renewable energy would depend a lot on inculcating energy-efficient behaviour such as operating ACs, both for commercial and domestic usage, more flexibly through the day and opting for energy-efficient products. 
• The path to achieving 500 GW of renewables needs to be gradual, ensuring an orderly transition as coal is unavoidable in the near future.
  •  Reducing coal imports and increasing domestic production of coal needs focused attention.