India has set ambitious targets to increase the share of renewable energy in its overall energy mix to meet the increasing electricity demand as well as its commitments under the Paris Agreement. Achieving these targets also presents various technological, financial, and infrastructure-related challenges.
One of the major challenges is the intermittent and variable nature of renewable energy sources like solar and wind power. The power generation from solar PV systems and wind turbines fluctuates depending on factors such as availability of sunlight, wind speed etc. This can create problems in integrating solar and wind power smoothly into the existing electricity grid designed primarily for base load thermal power plants. Managing the variability and ensuring grid stability requires techniques like forecasting renewable energy generation, energy storage, demand response etc. which are still evolving in India.
The geographical distribution of solar and wind resources in India is not always matched with the location of existing demand centers or transmission infrastructure. Most of India’s wind power potential is located along its coastlines while solar potential is more in its western and southern regions. The major load centers are located in northern, eastern, western and southern India. Developing new transmission lines, grids, and interconnectors to effectively transport large volumes of variable renewable power from resource-rich regions to demand centers is a major infrastructural challenge. Right of way issues, delays and costs involved in setting up inter-state transmission projects are some obstacles.
India has limited indigenous manufacturing capability for renewable energy technologies like solar panels, wind turbines, battery storage etc. It is still heavily import-dependent, especially for specialized components and equipment. This dependence on imports makes the costs of renewable projects susceptible to fluctuations in global market prices and trade policies. Developing a strong domestic manufacturing base through technology transfers and incentives can help reduce costs and supply chain risks. It requires substantial investments and time to ramp up local manufacturing to the required scale.
The variable nature and high upfront capital costs of renewable projects compared to conventional thermal power plants have made financing them a challenging task. Attracting large institutional investments and developing nascent corporate and retail green financing markets would be important to bridge the financing gaps. Achieving scale and ensuring creditworthiness of renewable energy projects through various risk mitigation mechanisms like Viability Gap Funding, renewable purchase obligations, green bond markets etc. is necessary.
Land acquisition and associated delays also pose another hurdle. Significant amounts of reasonably flat land are required to set up large utility-scale solar and wind power projects. Obtaining clearances and resolving disputes over land acquisition and use for project purposes increases risks and costs for developers. Streamlining processes, enhancing community participation and improving compensation mechanisms are needed to expedite land availability.
Capacity building of local communities, administrators and regulators would be critical to drive the renewable energy transition effectively at state and local levels. Aspects like planning, implementation, monitoring, enforcement of regulations require developing technical know-how, awareness and coordination mechanisms across different agencies involved at central and state levels.
Overcoming the abovementioned technological, infrastructural, financial, land and regulatory challenges would be important for India to achieve its target of having 450 GW of renewable power by 2030. Progress is being made through various initiatives on smart grid development, renewable purchase obligations, green corridors, Viability Gap Funding, green financing, updated land laws, and government programs for entrepreneurship and skill development. Dedicated efforts across multiple stakeholders in both public and private sectors will be crucial to realize India’s renewable energy vision and meet its climate change goals expeditiously. Mobilizing adequate domestic and international investments, along with supportive public policies will determine the success of India’s renewable energy journey going forward.