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The e-reverse auction arrangement in renewable energy sector may end soon: MNRE secretary
Jul 14, 2022

The e-reverse auction arrangement in renewable energy sector may end soon: MNRE Secy; 
       
Journey to green hydrogen has to go through blue hydrogen: VK Saraswat

 

The growth of renewable energy (RE) sector is inextricably linked to the country achieving Net-Zero goal by 2070, and thus has been identified as a strategic sector for self-reliance, said Mr Indu Shekhar Chaturvedi, Secretary, Ministry of New and Renewable Energy (MNRE), at CII conference ‘India @ 2030: A Roadmap for AatmaNirbhar Bharat in RE’.

The MNRE is considering changes in the bidding structure of the wind energy sector to enable greater capacity addition, a long-standing demand of the industry. “The e-reverse auction arrangement has in principle been decided to be ended and a forward decision will follow soon,” Mr Chaturvedi said. In the renewable energy sector, the mechanism of e-reverse auctions has been used largely to discover the lowest tariff, resulting in historically low-bids. The commissioning and deployments of projects got adversely affected in many cases, and developers faced ‘the winner's curse’ as import prices of components soared, and in some cases, bids had to be revised upwards.

Public policy support will continue for RE the sector, and institutional streamlining between different fragments of the electricity sector—ministry of power, MNRE, Central Electricity Regulatory Commission (CERC), state regulators, and the distribution companies will be attempted. “MNRE has already started work in this regard,” said Mr Chaturvedi, adding that direct subsidy will be necessary in new and upcoming areas, like Hydrogen Mission and Offshore-Wind, among others.

Becoming self-sufficient in the renewable energy space is a key goal for India as the country looks to increase the share of sustainable energy to attain the net zero goal by 2070. India’s installed renewable energy capacity has increased by 396 per cent in the last 8.5 years and stands at more than 160 GW (including large Hydro), which is about 40 per cent of the country’s total capacity (as on March 31, 2022). The installed solar energy capacity has increased by 19.3 times in the last 8 years and stands at 56.6 GW as of June 1, 2022. India which already ranked third in renewable energy installations in 2021 has set an ambitious target of creating 500 GW of non-fossil fuel capacity by 2030.

India will require an estimated $15 billion in public and private funding to set up 15 GW of Green Hydrogen, Dr VK Saraswat, Member, NITI, Aayog said pointing out that Green Hydrogen is the future. The fuel for the future is green hydrogen, but the price continues to be prohibitive for sectors like fertilizer and refinery which need to use it, said Dr Saraswat. "But for the price of green energy to come down to $1/kg, 80 per cent reduction in cost of electrolyser is needed, electricity cost has to slash to 2 cents per kwh, electrolyser plant life must increase to 20 years, electrolyser efficiency must increase by 76 per cent, he said, adding that our journey to green hydrogen will have to go through blue hydrogen.”

As India braces to become a global hub of manufacturing for renewable energy and transform from a net-importer of energy to a next exporter of renewable energy over the next few decades, it will open a window of opportunity for domestic entrepreneurs, and global companies to make in India across the renewable energy value chain, said Mr Tulsi Tanti, Chairman of CII Renewable Council, and Chairman and Managing Director of Suzlon Group. “Not only in wind and solar, but we will also need enormous manufacturing capacity in batteries, electrolysers, equipment for green methane and green ammonia,” said Mr Tanti.

There is a silent movement to transition towards green-energy, and we need to accelerate the pace and scale of it, added Sameer Gupta, Co-Chair, Conference on AatmaNirbhar Bharat in RE, and Managing Director, Jakson Limited. In the short-term, issues like Approved List of Models and Manufacturers (ALMM) extensions, grand-fathering of Basic Customs Duty among other steps were needed to enable the developers so that project targets are met, said Dr Praveer Sinha, co-chairman, CII National Committee on Power, and Chief Executive Officer and Managing Director, Tata Power. “I believe this is the decade for India and renewable energy can be a game-changer in that story as it offers an opportunity to all of us to rise above our capabilities to achieve something extraordinary” added Dr Sinha.

The pace of awards of the project has been extraordinary, but actual commissioning and implementation has lagged, pointed out Mr Rajiv Ranjan Mishra, co-chairman, CII National Committee on Power, and Managing Director, Apraava Renewable Energy. “Consistency and visibility of demand is key to performance of not only the renewable energy sector, but any sector. Manufacturing industry in the renewable sector needs that demand certainty” added Mr Mishra. 

Pandemic has brought into focus the importance of supply-chain resilience, echoed panelists, underscoring the need to boost ‘Atma Nirbharta’ in strategic sectors like renewable energy. “The pandemic exposed us to vulnerabilities, for which we had no playbook, said Mr Vineet Mittal, co-chairman CII Renewable Energy Council, and Chairman, Avaada Group, citing how during Covid-19, in China, the prices of poly-silicon (a key raw material in the solar photovoltaic supply chain) soared to an unprecedented level, a coal-crisis resulted in black-outs, and an exceptional surge in solar-panel prices disrupting projects at a large-scale. 

"Green Hydrogen is the buzzword. Despite the challenges, NTPC is committed to green hydrogen. We have to ramp up domestic manufacturing in green hydrogen and shouldn't be dependent on imports as we have in solar power. We have to boost electrolyser manufacturing capacity, improve water availability," said Mohit Bhargava, Chief Executive Officer, NTPC Renewable Energy Ltd. “We have been talking about green hydrogen, green ammonia, but now we also need to focus on green methanol and the government needs to include it in the RE policy,” added Bhargava. “It is scalable, and can help us reach the net-zero goal.”

India which is already ranked third in renewable energy installations in 2021 has set an ambitious target of creating 500 GW of non-fossil fuel capacity by 2030.

Low power tariff discovery through reverse bidding and challenges in land acquisitions have been serious impediments to the expansion of renewables. The financial health of  DISCOMs and strict implementation of renewable mandates will be crucial to maintaining strong demand, recommended a CII Theme paper.

“Domestic renewable energy manufacturers, particularly in solar PV, energy storage, biofuels, and green hydrogen, must be incentivized for in-house technology development for at least the next four to five years. Export incentives are crucial to compete in the global markets. The government needs to review current incentives, especially for up-and-coming sectors that are planning to scale,” said the CII theme paper.

The conference is first in the series of AatmaNirbhar Bharat Conference which CII will be organising this year. This is the third edition of the conference that focuses on self-reliance in renewable energy.

 

14 July 2022

New Delhi

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