By Manoj Kohli
Executive Chairman, SB Energy India, SoftBank Group
Thanks to several factors like the global concern for energy security, access to clean energy, financial viability, advancement of technology, falling costs and ambitious government targets with policy support, growth in renewable energy (RE) deployment is healthy and increasing year-on-year.
Since 2015, investment in RE by developing economies has exceeded that by developed countries. During FY2017, the global renewables industry saw fresh investment worth over USD 280 billion. Due to economic growth and increasing energy demand, more and more developing nations are willing to adopt renewables and expand investment in the sector. Thus, this trend of developing countries outpacing developed nations as leaders in the RE is likely to continue in the long term.
For several decades, hydroelectric power has been the sole flag-bearer for the RE industry as a mainstream and cost-competitive source of energy. But now, renewable technologies like solar and wind have already started giving stiff competition to hydroelectric power with rapid and large-scale capacity building. During the last fiscal, India and several nations received lowest-ever solar and wind tenders bids – many lower than conventional power tariffs. Achieving grid parity saw solar and wind technologies together increase installed capacity by 150+GW in FY2017, which was more than the net capacity added for coal, natural gas and nuclear power combined.
The Government of India has set a target to achieve 175GW RE installed capacity by 2022, and has been working aggressively towards this by providing policy support and calling for several international-level RE project bids. The efforts of the government are bearing fruit, as FY17-18 saw 9.1GW capacity installation from utility-based solar, signifying a growth of 72% in comparison to previous year installations. In addition, the push for electric vehicles across the transport industry is set to increase the demand for clean energy. With huge RE potential and strong Government support, the Indian RE sector is set to grow at a fast pace over the next decade.
After overcoming the cost challenge for development of RE projects, the sector now needs to address concerns related to the highly variable nature of the energy produced by renewable projects. More focus needs to be given to evolving energy storage technologies which can provide existing power systems the required flexibility to address RE variability and allow easy integration of renewable power.
The development of RE industry across the globe is the need of the hour, to provide a clean and sustainable environment to all citizens and importantly, at an affordable cost.
First published for 2nd Global RE-INVEST 2018 at re-invest.in.