Building out renewables in India could cost $26.5b through 2030, report says
A new study from the Energy Department’s Lawrence Berkeley National Laboratory found that deploying 307 GW of solar and 142 GW of wind capacity in India by 2030 would need around a $26.5 billion annual investment. That spend would be around 20% lower than what was invested across all of the country’s generation resources between 2015 and 2019.
The renewable capacity deployment was forecast to use about 1.25% of land that is labeled as barren or waste. Because solar resources are good across large parts of India, the solar energy buildout—and thus the land use—potentially could be spread out.
India has a target ofd 500 GW of installed non-fossil fuel capacity by 2030, as announced by Prime Minister Narendra Modi at the United Nations Climate Change Conference of the Parties (COP-26) in Glasgow in November. Current nuclear and large hydropower capacity add up to around 50 GW.
Installing 450 GW of renewables by 2030 could help meet Modi’s target, the report said. India hit 100 GW of renewable energy capacity in August with another 80 GW in the pipeline.
The nation added 2,835 MW of solar in the third quarter of 2021, up 14% compared to 2,488 MW installed in the second quarter. Year-over-year installations rose 547%, according to a new report by Mercom India Research.
In the first nine months of 2021, India added more than 7.4 GW of solar, a 335% increase compared to the 1.73 GW installed in the same period in 2020.
Increased raw materials costs, “severe volatility” in module availability and price, curtailment of power in several Indian states, and high freight charges all added to difficulties for project developers, the report said.
According to the Berkeley Lab researchers, India would need about 280 GW of new transmission capacity by 2030, a little over double the transmission expansion already planned through 2025. Most of the new transmission buildout is projected to be driven by a near doubling of electricity demand between 2020 and 2030.
The researchers said that using domestically manufactured solar panels instead of imported panels may increase solar power purchase agreement (PPA) prices by about 10%–15% in the mid-term. Even so, solar power would still be a cost-effective way to meet growing demand instead of building new fossil fuel-based power plants, the report said. That’s because the price of electricity from solar plants has fallen below the variable cost of most existing coal units.
To reach renewable energy capacity targets, India would need to build about 35–40 GW of solar and wind capacity every year this decade, the report said. India’s power sector added about 22 GW per year in the previous decade (including thermal and renewable). Policy and regulatory measures would be needed to increase the pace of deployment.
An earlier Berkeley Lab report found that the least-cost resource mix to meet India’s load in 2030 would consist primarily of a combination of renewable energy and flexible resources as follows: 307 GW of solar, 142 GW wind, and 15 GW other renewables; 63 GW (252 GWh) of battery storage; 60 GW of load shifting to solar hours (including 50 GW agricultural and 10 GW industrial); and flexible operation of the existing natural gas fleet of 25 GW. A coal power plant capacity of 229 GW (23 GW net addition over 2020) also was found to be cost-effective.