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My recent representation to the Union Power Minister based on the news article "Renewable energy: Why there is an urgent need for collective ownership" (see this report) needs to be elaborated further on in the context of relevant studies from around the world, which are of huge relevance to the Indian economy. Whereas the focus of my representation was on the electricity sector, the larger and relevant ramifications to the national economy should become obvious.
In order to look into larger relevant ramifications to the national economy, it should become obvious that the capital investment needed in the power sector to meet the unchecked growth of the demand in the country during the next 25-30 years is projected to be enormous, and can overwhelm the existing model of financing such high cost investments.
Whereas the business-as-usual scenario of relying on conventional technology power plants and the associated infrastructure will devastate our economy from all perspectives, including the all important climate change phenomenon, even the over-reliance on large size renewable energy power projects, such as solar and wind power parks and the associated power lines, also can become unbearable burden on our economy, if urgent and effective corrective measures are not implemented (click here and here).
One news report says: "According to a March 2021 report by a panel of the Indian parliament, India needs Rs. 2.61 trillion (Rs. 261,000 crore) more to fund the balance energy capacity and achieve the target 175 GW of renewable energy by 2022. But the average annual investment in the renewable energy sector has been around Rs. 823 billion (Rs. 82,300 crore) over the past five years and if investments continue at the same rate, the required funds will not be met by 2022" (also click here).
Whereas the cost components of such a financial burden are due to various factors, the societal level cost components associated with the power transmission lines, even in a 100% renewable energy scenario, to carry power from large size power parks to the nooks and corners of the country, will be humongous in addition to the large size land mass diversion concerns.
The associated transmission and distribution (T&D) losses due to a large number of additional T&D lines, subsidies and pilferage will devastate the overall economic future. It is techno-economically feasible to minimise such societal level costs associated with huge investments in such conventional infrastructure, if our society takes a rational approach in diligently examining all the available options to our society. And such saved finances can be used to uplift the vulnerable sections from the clutches of poverty.
The hugely politically motivated decisions in the power sector such as "free electricity to consumers", which have been announced in Punjab and Karnataka, and if followed by other states, alone will lead to unmitigated financial disasters (click here, here, here).
Keeping all these factors in objective consideration, it should become unambiguously evident that the economics of the power sector in the country should be seen from a totally different perspective. There is no alternative but to minimise the societal level costs from the overall sustainability perspective.
Such an objective can be realised only through the effective implementation of decentralised renewable energy sources, of which the rooftop solar PV systems should be a critically important option, wherein the overall societal costs can be made minimum and wherein there will be much clearer feasibility to assign most costs to the individual consumers; as compared to the present scenario wherein almost all costs of power supply is being passed on the the entire society on an un-equitable basis.
At present, the group of consumers with huge energy profligacy, such as a huge residential building complex with monthly consumption of a few thousands of units of per capita electricity, is charged at the same rate as that of a small urban residential consumer; and the avoidable costs associated with environmental degradation (even though the same is due to lavish lifestyle of a tiny number of people) has to be borne by everyone in the society.
There are multiple benefits of decentralised renewable energy sources, especially the rooftop solar PV systems, which can also encourage the end consumers to bear the substantial part of the overall capital cost of establishing the renewable energy sources all over the country, while more or less eliminating the need for additional power lines and substations.
Politically motivated decisions on free electricity to consumers will lead to unmitigated financial disasters
This way, not only the capital cost burden for the state as a whole can come down drastically, but also the need to divert agricultural and forest lands for additional power lines and substations will be minimal, while enormously helping in the safe management of power grid operation.
These and many other related factors should establish the fact as to why there is an urgent need for collective ownership of the overall cost of demand/ supply of electricity. As of now only the state and few corporate entities are bearing almost all the capital costs, and the societal level ecology is bearing all the burden of unacceptable environmental degradation.
These and many other related factors should establish the fact as to why there is an urgent need for collective ownership of the overall cost of demand/ supply of electricity. As of now only the state and few corporate entities are bearing almost all the capital costs, and the societal level ecology is bearing all the burden of unacceptable environmental degradation.
Most of the end users of electricity don't even seem to realise the climate change perspective of such electricity related environmental degradation, which has been the primary reason for the apparent lack of efficiency and accountability in the sector.
Recent reports should indicate the enormity of the need for our country to think rationally and urgently to provide maximum priority to decentralised renewable energy sources, especially the rooftop solar PV systems, and to ensure that most of the energy supply costs are borne by the end consumers on a proportionate basis.
Multiple agency studies, including the IEA report, indicating that solar is the cheapest energy source, and the practical examples within our own borders to show how rooftop solar PV systems are of enormous relevance to our communities, should provide all the persuasion needed by our authorities to embark on a smooth and early energy transition.
In this context, it should be rooftop solar PV systems enormous relevance to India.
The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan Yojana (PMKUSUM) in 2019 of the New and Renewable Energy (MNRE) alone, if implemented imaginatively, can lead to reduce the overall annual grid electricity demand by as much as 25% and will be associated with humongous and multiple benefits to the country, such as better voltage profile across the grid, vastly reduced T&D losses, and optimal utlisation of our fresh water sources.
If reports on rooftop solar has ensured 52 MW generation addition to the grid capacity from over 3,000 housing societies across Maharashtra alone, the potential to add grid quality power across the length and breadth of the country through such rooftop solar PV systems, including the solar powered Irrigation Pump (IP) sets, is immense, thereby satisfactorily addressing most of the chronic issues in the power sector. As a welfare oriented society, we must make all possible efforts to fully utilise such techno-economic developments.
The associated policy initiatives and implementation at various levels of our country can become truly meaningful, if and only if a diligently prepared National Energy Policy, which should effectively cover all such strategic perspectives, and which is prepared with effective participation by various stakeholder groups, are made available to the public at the earliest.
May I hope that the NITI Aayog would work on all the associated initiatives to hasten the energy transition in the country?
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*Power & Climate Policy Analyst. This article is based on the author's representation to Nirmala Sitharaman, Union Minister for Finance, and RK Singh, Union Minister for Power and NRE
Multiple agency studies, including the IEA report, indicating that solar is the cheapest energy source, and the practical examples within our own borders to show how rooftop solar PV systems are of enormous relevance to our communities, should provide all the persuasion needed by our authorities to embark on a smooth and early energy transition.
In this context, it should be rooftop solar PV systems enormous relevance to India.
The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan Yojana (PMKUSUM) in 2019 of the New and Renewable Energy (MNRE) alone, if implemented imaginatively, can lead to reduce the overall annual grid electricity demand by as much as 25% and will be associated with humongous and multiple benefits to the country, such as better voltage profile across the grid, vastly reduced T&D losses, and optimal utlisation of our fresh water sources.
If reports on rooftop solar has ensured 52 MW generation addition to the grid capacity from over 3,000 housing societies across Maharashtra alone, the potential to add grid quality power across the length and breadth of the country through such rooftop solar PV systems, including the solar powered Irrigation Pump (IP) sets, is immense, thereby satisfactorily addressing most of the chronic issues in the power sector. As a welfare oriented society, we must make all possible efforts to fully utilise such techno-economic developments.
The associated policy initiatives and implementation at various levels of our country can become truly meaningful, if and only if a diligently prepared National Energy Policy, which should effectively cover all such strategic perspectives, and which is prepared with effective participation by various stakeholder groups, are made available to the public at the earliest.
May I hope that the NITI Aayog would work on all the associated initiatives to hasten the energy transition in the country?
---
*Power & Climate Policy Analyst. This article is based on the author's representation to Nirmala Sitharaman, Union Minister for Finance, and RK Singh, Union Minister for Power and NRE
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