Solar power and storage are exponential technologies, meaning they could grow very rapidly and take stakeholders by surprise. The rapid rise is good for India and may help the country leapfrog to clean energy sources to meet its needs. However, the sector
and gear up to plan for this fundamental shift. Also, the issue is not about coal vs solar since India needs to harness all its natural resources for achieving energy security at affordable prices, which at the same time provides reasonable return to investors. The government has also identified the goal of ’Power for all by 2022’, and renewable energy sources, such as solar, are expected to play an important role in this,” said Manish Aggarwal, Partner and Head – Energy and Natural Resources, KPMG in India.
The report highlights the need for the government to significantly strengthen the planning infrastructure and processes, and emphasises the energy sector’s need for a new planning paradigm which takes into account the expected emphasis on renewable energy in India. The Government needs to focus on significant strengthening of the planning infrastructure and processes. The right incentives for investments in grid integration of solar and balancing services should be put in place early. The report also recognises that significant conventional generation capacities are also needed to meet the country’s growing energy demand. In fact, conventional generators will need to contribute 60% per cent of incremental capacity needs up to 2025, with solar contributing between 20-25% per cent, and considering another 15% per cent coming from wind. However, these additional capacities will need different attributes from the ones we have seen so far. These attributes are related to flexibility in generation (in terms of ramp rates and minimum thresholds) and low fixed cost, and higher variable cost preference, rather than vice versa.