Comments
The renewable energy sector will witness three milestone events early in 2025.
First, solar power capacity will cross the 100-GW mark. Second, wind power capacity will exceed 50 GW. Third, total renewable energy capacity in India — counting wind, solar, wind-solar hybrid, biomass and small hydro, but not large hydro and nuclear — will exceed 200 GW.
So, the task before the country — including policymakers and industry — is to build on this base. For that to happen, India must abandon two things in order to focus adequately on two other vital needs.
Many industry experts and studies have pointed out that green hydrogen is still some distance away. None less than Dr Fatih Birol, Executive Director of the International Energy Agency, has stated this categorically. A recent report by the agency also says pretty much the same. Another report, by the International Institute for Sustainable Development and the Centre for Study of Science, Technology and Policy (CSTEP), after dilating on why unsubsidised green hydrogen will be uncompetitive until around 2050, suggested that the government should adopt a “revised timeline, at a realistic level of ambition”. It also highlighted the burden on water resources from the use of electrolysers.
The subsidy conundrum
If further reason was needed for why green hydrogen is not worth pursuing right now, it came from the meeting between green hydrogen developers and the Ministry of New and Renewable Energy (MNRE) on December 19, 2024. Among the many asks of the developers was “long-term subsidies” — for 15-20 years — to “bridge the gap between grey hydrogen and green hydrogen”, according to one participant.
By all accounts, the Ministry did not find this acceptable. Additionally, the developers highlighted issues with European certification requirements, high port handling charges and the grid-related problems of the power plants that supply electricity to electrolysers.
So far, 10 developers have been awarded contracts for 4,12,000 tonnes of green hydrogen and another eight companies for 1,500 MW of annual electrolyser production. The green hydrogen industry appears unlikely to sustain without subsidies.
Clearly, green hydrogen is fit to be shelved until technology comes up with better solutions — such as solar-powered seawater electrolysers.
More headwinds
The second avoidable activity is offshore wind. The government has announced ₹6,853-crore viability gap funding for 1,000 MW of offshore projects — 500 MW each off the Gujarat and Tamil Nadu coasts. This is in addition to the ₹600 crore grant for upgrading the Thoothukudi and Pipavav ports to handle wind project cargo.
The government company SECI has tendered out seabed leasing rights for 4 GW of offshore projects, and the setting up of 500 MW offshore wind projects; companies have time till February 4 to submit bids. The auction target is 30 GW by 2030.
Industry insiders have often pointed to the difficulty in securing installation services. It is unlikely that any meaningful offshore capacity will come up in the next decade.
There are two contrasting views about offshore wind.
The favourable view is that one cannot ignore offshore wind in a country like India, which has big potential. Besides, for climate action, you need all weapons, including offshore wind. The opposite view is that offshore wind, even after costs have declined considerably, is way too expensive — around ₹7 a kWhr (compared with ₹3.3-₹3.6 for onshore wind-solar hybrid) — and hence can wait, especially in a country like India, which has huge untapped onshore potential.
Further, it is argued that the funds earmarked for offshore subsidies would be better utilised elsewhere — such as in building a transmission link to Sri Lanka.
What works
During the recent visit of Sri Lankan President Anura Dissanayake to India, one of the issues discussed was building a power transmission link between the neighbours.
Sri Lanka is estimated to have onshore wind potential of at least 45 GW (according to a 20-year-old survey). It is far easier and cheaper to build wind power projects in the island nation and wheel it up to India, with attendant geopolitical advantages.
The other imperative for India is to start using thorium, abundantly available in India, in existing and upcoming pressurised heavy water reactors. This is now feasible with the development of a new type of fuel, called ANEEL, by an Indian-owned, US-headquartered company called Clean Core Thorium Energy (CCTE). The company was in the news recently for inking an agreement with public sector power major NTPC for joint work on nuclear plants. Earlier, thorium was thought to be a fuel of the future — one that should wait until sufficient inventories of plutonium are built — but that is no longer true. Thorium is for now.
The year 2025 will march past some key milestones in renewable energy. But for India to achieve its international climate action commitments and its net zero ambition, some course correction is necessary.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.